Metatrader 4 is a Forex trading platform that enables traders to send buy or sell orders to Forex brokers for executing their trades. Developed by MetaQuotes Software, Metatrader 4 became a popular choice for brokers from about 2007 to 2010, and has only continued to grow in popularity since. Almost every Forex broker in the world supports the Metatrader 4 platform, also commonly known as MT4. It is quite likely the most versatile of all Forex trading charting platforms.
MT4 supports many functions and functionalities, including 3rd party apps like my software that copies trades between multiple platforms, thousands of different indicators and even expert advisors which can take the form of automated trade assistants/forex robots. There are several companies offering these indicators and robots and other Forex software and MT4 programming services. The popularity of MT4 comes down to a number of different advantages that it has over other trading platforms. This is what we are going to take a look at here in this article.
Here are just a few of the reasons for the popularity of Metatrader 4 and why the forex trading community has embraced it so much. Metatrader 4 offers to forex traders:
Customized Forex software
MT4 allows traders to install their own trading software and custom indicators and downloaded indicators. This represents a great advantage to traders who thrive on using indicators in their trading. There are hundreds of different custom indicators available online—many of them for free. (Note on repainting indicators: Be wary of buying custom indicators that don’t offer a money-back guarantee, or that ‘repaint’.
Repainting is a process of ‘backdating’ the information that the indicator displays, and can be troublesome for live trading. Repainting typically makes the indicator look a lot more powerful than it really is. The repainting indicator uses the current price action/data to ‘redo its prediction’ of what the price was going to do. There are many fraudulent trading systems that are sold using repainting indicators—you will know it if you buy one and try trading it live.
You will look at your chart and then the next minute the indicator has ‘repainted’ its data and you will wonder why you did not get into the trade that was suggested at a better price. It can be quite a deceptive feeling and I just wanted to pass along this warning to you about repainting indicators. Not all repainting indicators are bad but they certainly can be used to manipulate signals and it’s something you should watch out for.
It is important to note that many indicators repaint until the current price bar is still open. It is obvious, because no one knows at what price the bar will close and the indicator just displays its value based on the current price. While price is floating and is not fixed, the indicator value is likely to change. Once the price bar closes and its close-price is known the indicator should not change its value too.
The bad part about repainting indicators is that there are many of them which will change indicator value if the newly formed price bar is not in its favor. This is where you enter the market on an entry signal given by the indicator and when the next price bar closes that entry signal (the one you have used to make your trading decision) is replaced with a better signal (one that makes the indicator look more accurate than it really is). Some repainting indicators will even repaint over multiple bars in the past and really distort the real-time picture. Stay away from such indicators.
MT4 allows traders to write scripts for automated trading and self-developed Forex indicators, as it supports algorithmic trading. Automated trading is a dream-come-true for so many of us. It took me several years before developing a profitable forex robot. But the time was well invested because the returns that one can make with a robot can be great—and perhaps the best part about automated trading is the fact that it does not require much time investment at all.
You can keep your normal job or other business activities running while your robot automatically trades profitably for you. More detailed information on robot trading systems is available here with this article. Here again, there are hundreds of different robots that have been developed with this goal of automated forex trading. Some are good but most of them are unprofitable. Be cautious with your money whenever deciding to risk money on a trading robot. Always test on a demo account first.
I have made the mistake of running a new EA on my live account before testing it first on a demo account. It was a painful lesson and it cost me money that I should have been wiser with. I give you this warning so that hopefully you will be wiser than I was and can save yourself from potential painful drawdowns.
Simplicity and ease-of-use
Although extremely advanced, MT4 offers a rather simple, user-friendly interface that is easy to navigate even for novice traders. It offers both front-end and back-office mechanisms to control chart displays, indicator/expert-advisor settings as well as clever display options for multiple chart setups.
Note: Investopedia.com has a great tutorial on MetaTrader 4 that you might find useful if you are new to trading or new to the MT4 platform. You can also find some good videos on YouTube which will walk you through many of the most popular features of MT4, as well as demonstrate how to change chart displays, install trading robots and configure indicators, etc.
Consistent Updating with cutting-edge features
Traders can enjoy this unparalleled trading experience with the comfort of knowing that MT4 is updated on quite a regular basis with new, clever and intuitive features. This includes software like Expert Advisors and multiple drag-and-drop charting that help analyze and execute trades automatically. One of the newest options recently incorporated into MT4 is the option for closing trades with just one click. This was an option that many traders were wanting in the previous versions of MT4 and as of 2012 the MetaQuotes Company responded and provided the one-click close feature. This is just one example of how MT4 is rather continuously updated with useful features and improvements.
MT4 allows the download and installation of Expert Advisors that can function as semi-automated trade assistants. These trade assistants monitor and analyze the market and manage each trade automatically, but they don’t necessarily place the initial trade. Some of these assistants will bring a pop-up onto the screen asking whether or not you wish to take each trade. If the trade is taken (by final human decision), the trade assistant robot will monitor the trade and manage/close according to the trade parameters and the rules programmed into the robot/expert advisor.
Note: These types of trade assistants are usually difficult to find and are only usually a part of more-costly trading courses/systems.
Automated Trading System/Robot Testing
MT4 is great at helping traders and software developers to test various automated trading strategies. This process is known as ‘backtesting’ and is the process of running a robot using the past/historical price data to see how it will trade/function.
Note: Robot developers use this backtesting feature of MT4 in order to check their robots for malfunctions and also to measure for proper execution and effectiveness of the trading rules. It is not a guaranteed that a properly backtested robot will perform well in a live trading environment, but it gets programmers and trade system developers one step closer towards a profitable robot. Personally, I never trust trading records created during the backtesting process.
With the MT4 technical analysis feature, traders are able to manipulate several indicators with a high degree of accuracy. Technical analysis helps traders identify trends and generate ideas for profitable trade entries. Typically, new traders will have an obsession with indicators because they get the idea that ‘the more indicators the better’, but of course this is not necessarily true. On the converse, loading up a chart with too many indicators can often be counter-productive to locating profitable trades. There are thousands of different trading systems available on the internet; some are free and some are very expensive. It is the job of every new trader to try and identify the system that works the best for them and then to master that system very well. It is through mastery, not dabbling, that the trading profits will come.
MT4 also offers enhanced flexibility and complex order capability. It is possible to have dozens (or even hundreds) of different orders running at the same time in the same MT4 platform. There are some trading robots that use this many trades (a.k.a. Grid Trading style), but this doesn’t necessarily make them profitable. Depending on the country that you live in (mainly it is the United States that has this restriction), you can even have multiple trades open on the same currency in opposite directions. This is a process commonly known as ‘hedging’ and can be an effective tool if used properly. Traders who use this to take advantage of the market use tools like Hedge EA to help them automate some of this process.
MT4 platform supports many languages. Hence, traders from anywhere across the world can utilize the MT4 platform and its data, irrespective of their language proficiency. It is very easy to switch to another language by selecting it from the list in the top main menu and then restarting the platform.
MT4 offers traders the choice of various timeframes, starting from one minute to one month. They can choose the best trading time frame based on their needs. This is another area where new traders can get caught up in confusion. Again, try to find the system and the timeframe that works best for you. What works well for one may not work well for another. Personally, I like higher timeframes like 4 hour or Daily. This usually gives more accurate entry points and setups. The lower timeframes are often easily manipulated by news releases and whipsaw price action, while on the higher timeframes the price action will tend to be smoother.
With MT4 programming, users can create their own customized charts with technical indicators. MT4 also allows for an unlimited number of customized layout options of the trading interface in general. All of these chart setups, designs and customizations can be saved as templates and recalled at a later time, as well as transferred to other users/computers/MT4 installs.
Data storage and offline usability
Storage and organization of data (including transaction histories and past reports) is quite easy with MT4 because it is stored on the user’s computer or server. The data and price information is also available offline so studying and testing can be accomplished even without an internet connection, and also on the weekend when there is no price feed from the broker. This enables traders to track their trades and prepare for the future ones even when the market is not open.
Note: This process of study and visual/manual backtesting is very valuable, especially for new traders who are trying to learn the rules and entry points of their trading systems. Studying the past data with a fine-toothed comb is one of the most effective ways of learning a new trading method.
With MT4 demo accounts, new users can practice trading without investing any money. Totally free of cost, these accounts help traders gain years of expertise through a few months of practice trading. This is indeed invaluable experience and should not be thought of likely by new traders who are learning the ropes.
Demo accounts are also incredibly valuable when it comes to testing forex robots. A demo account can never replace a live account when it comes to emotional involvement. This emotional involvement is incredibly valuable as well, when the time is right and when the trading has already been mastered on a demo account. In terms of robot performance, a demo account is highly recommended for initial tests before going live with real money.
MT4 isn’t a very ‘heavy’ program so it is relatively easy on the computer you are running it on. Some trading platforms are very cumbersome and use up a lot of computer memory in order to run them, but fortunately Metatrader 4 is not one of these programs. This allows you to run MT4 even when you are running several other programs at the same time. And of course you can run multiple MetaTrader 4 instances on the same computer or VPS server.
- Windows 2000 / XP / Vista
- 2.0 GHz or faster CPU
- 512 MB RAM (1 GB recommended)
- Screen resolution 1024×768 or higher
- Modem/connection speed 36.6 Kbps or faster
- Internet Explorer version 7.0 or later
- Mozilla FireFox 2.0 or later
As you can see, any average (or even older) computer will be capable of running MT4.
MT4 facilitates high security trading, as it encrypts trading data and personal data. It also conceals the trader’s IP address, thus enabling enhanced security and offers a reduced risk of hackers gaining access to an account. This is especially important in modern days of computer hackers when even giant shopping chains like Target are successfully hacked and customers’ personal identity and credit card information are being stolen.
MT4 also comes with two sets of free Forex software with in-built automation that supports the programming language MQL. This allows traders to make their own trading scripts and indicators. This is an incredibly valuable free addition to the MT4 charting software. These programming software tools can also analyze data, create customized alerts and automate several programming tasks.
MT4 enables traders to use modern financial instruments with robust exchange analytics. Hence, traders can execute all types of trading operations easily, generally without any technical issues. MT4 really is a fantastic trading/charting software that can facilitate both robotic trading and manual trading alike (even in the same platform if you so desire). If you learn this charting software well, as well as a good trading system, you have all you need to systematically build wealth—even starting with a small amount of money.
MT4 is also easily downloadable from the web and totally free of cost. It only takes a few minutes to install and is easy to use. Traders can familiarize themselves with the terminal in just one or two weeks. MT4 also enables traders to trade with more than 1000 brokerage firms’ servers that run on the MT4 platform. MT4 offers brokerage services to Forex, futures, stock markets and Contract for Difference (CFD) traders. It truly is a wonderful trading platform that almost every trader finds value in.
My Personal Take on Metatrader 4
Personally, what I like about MT4 the most is that it allows me to create so much software and connect the software with Windows API functionalities using DLL libraries. This is ‘programmer language’ so I realize you might not follow, but for me it is very important. There probably are other platforms that already can do that, but with MT4 I’ve found it convenient to create software like my Remote Trade Copier. So that is a benefit from the programmer’s point of view. 😉
The other thing I like the most about MT4 is the ability to share trading results with other traders and internet services using an “investor” password. This little gem allows you to share your trading history safely with others. For example, if I give you my trading account’s ‘investor password’ and you plug it into your MT4 account using my account number, you can see all of my trades! This is a stunning thing to be able to share trades and trade information with other traders.
Advanced Trade Copying Abilities with MT4
Also, this technology is a good way to copy trades from one MT4 to another MT4 platform, even on several VPS server or computers. To be exact, with Local Trade Copier (LTC) I can copy trades from the same master MT4 account (or even multiple master accounts at once) to an unlimited number of slave MT4 accounts, even on different computers and even in different countries. Now, as you might know, LTC does not use internet connection to transfer trades between MT4 platforms and that makes this trade copier software independent, reliable and very fast. This is the local version that can transfer between multiple MT4 platforms on the same computer. But even if it does not transfer trades using internet to another computer, you just setup the same master MT4 account on multiple computers and copy trades to different groups of MT4 slaves. Important Note: I teach this in detail in The Definitive Guide to Forex Trade Copying which is available online on MT4Copier.com.
With all this being said, there are some people that truly do not like Metatrader 4. Sometimes these are traders who have experience with other trading platforms and they are just ‘set in their ways’ and want to stick with the system that they originally learned and know best. Some people start off not liking MT4 and then after a while they discover how versatile it is, especially for automated forex trading. I personally have been a big fan of MT4 for many years—probably because I am primarily a forex software developer. Tradestation.com is probably the most comparable in terms of ‘trading power’ as MT4 but it simply does not have the versatility of MT4 when it comes to programming and working with automated trading strategies. There are other platforms out there online that many traders prefer using over MT4, but as far as I can tell MT4 is the most popular trading software of all.
Please let me know what you think of MT4. Do you have any ideas on functionality that they should add? Do you have any ideas for indicators or trading robots that you would like to turn into reality? Just reply below so that we can start talking about such things.
I am creating a set of special training videos about the most confusing MetaTrader 4 features and options. If you feel you have a hard time with anything regarding MT4, please take a minute to post this in the comments below. I promise that I will personally read that information and strongly consider adding an explanation for it to the 30 day MT4 challenge video training series that I am creating.
Good luck and happy trading!