Forex Trading with MetaTrader
If you’re looking to get started in forex trading, one of the first things you’ll need to do is choose a reputable and secure trading platform. MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two of the most popular trading platforms in the world, used by traders of all levels. They both offer a variety of features and tools that can help you trade effectively, even if you are a complete beginner.
In this blog post, we’ll go through the main difference and features of MetaTrader 4 and MetaTrader 5, and how to understand Forex Charts which are essential for Forex trading.
What is MetaTrader 4
There is certainly a reason why MetaTrader4 is the most popular trading platform in the world. this is because it’s reliable and it offers lots of useful features for traders of every level. MT4 is a multi-asset trading platform commonly used to trade forex and other markets via CFDs, analyse the financial markets, and use more advanced features such as Expert Advisors (EAs) or trading signals to automate trading. With the MetaTrader4 trading platform, traders have access to extensive technical analysis and versatile trading strategies. Additionally, the platform can be tailored to suit the needs of traders of all types and levels of experience, as it is highly customisable based on one’s trading preferences, requirements and styles.
What is MetaTrader 5
The latest platform from MetaQuotes, called MetaTrader 5 (MT5), was designed to cater for a wider range of asset classes compared to the popular predecessor MT4. It is now the go-to multi-asset platform for traders who want access to a variety of new powerful features and user-friendly trading tools. With this version, your smartphone or tablet can be used as a trading device from anywhere and at any time. This is due to the Web platform, which enables a trader to trade their assets of choice from any web browser and any device. Furthermore, the MT5 platform offers trading robots, trading signals, and copy trading which can all be accessed via one powerful interface.
The Benefits of The MetaTrader 4
MetaTrader 4 is an extremely safe trading platform because it ensures the security of information exchange by encrypting it between the servers and client terminals, along with RSA digital signatures. Furthermore, traders’ IP addresses are also encrypted, providing an entirely secure environment for all trades to be executed without any worry. Therefore, traders can trust that their credentials, finances and accounts are protected from cyber threats like hacking.
Automation of trading
For those with a packed schedule but an interest in trading the financial markets, MT4’s algorithmic or automated trading is an excellent option. This feature boasts considerable strength within MetaTrader 4 as traders can rely on a robotic assistant to analyse currency quotes and execute trades. The majority of trading strategies can be automated and executed by an EA, freeing you from the mundane tasks of market analysis and routine trading. Additionally, MT4 offers the opportunity to construct, test, and enhance your own automated trading programs.
Real-Time Access to Market Prices
By using MetaTrader4, traders can access real-time forex estimates that enable them to engage in trading activity. The “Watch Window” displays useful details like margin ratio, margin currency, contract size and spread. Furthermore, there is an additional feature known as “Depth of Market” which enables traders to remain informed on current market conditions including active buy orders for a particular currency pair.
The Benefits of The MetaTrader 5
Powerful Analytical Trading Tools
The MT5 platform boasts a wealth of robust analytical trading resources, with 38 technical indicators to choose from. There’s also the possibility to simultaneously display up to 100 currencies and stock quotes charts. With access to 21 distinct timeframes, users can delve deeper into the minute changes in prices. The platform also provides access to over 80 analytical and technical analysis tools, complete with graphical objects for added insight.
Choice of Order Executing Operations and Trade Orders
A feature that makes MetaTrader5 stand out from other competitors is the possibility to choose four different operations for executing orders: “Instant”, “Request”, “Market” and “Exchange”. Furthermore, it supports several types of trade orders, including “Market”, “Pending”, “Stop Orders” and “Trailing Stop Orders”.
Similar to MT4, users of MT5 have access to a wide range of additional tools beyond those of the built-in option. These include both free and paid tools offered by programmers and for those with coding skills, MetaTrader5 offers the possibility to design personalised tools.
Forex Charts in MetaTrader
For forex trading, it’s crucial to understand that forex charts in MetaTrader4 and MetaTrader5 show how a currency pair’s price has moved over a set timeframe. The charts exhibit the opening, closing, high, and low prices of the currency pair across varying time intervals. These time intervals extend from one minute up to one month in length, offering traders an opportunity to scrutinise market trends and patterns.
There are two main types of forex charts: line and candlestick. Line graphs are straightforward, displaying only the currency pair’s closing prices within a particular time frame. On the other hand, candlestick charts offer more comprehensive information about price changes by presenting opening, high, low, and closing prices over a given period. These types of graphs are useful for identifying patterns and trends in the market easily.
How to Read Forex Charts
To read forex charts, an understanding of the various constituents of a chart is necessary. The time axis, or x-axis, runs horizontally while the price axis, or y-axis, runs vertically. Every dot on these charts signifies the currency pair’s value at a distinct moment in time. A horizontal line to the left of the candlestick denotes the currency pair’s opening price, whereas a line to the right represents its closing price. The highest and lowest prices within the specified timeframe are depicted by the top and bottom of the candlestick, respectively.
Bullish and Bearish in Forex Charts
Candlestick charts feature two distinct types of candlesticks – bullish and bearish. Bullish candles signify a rise in the currency pair’s value over the specified period, while bearish ones indicate a decline. Candlesticks that show a positive trend are depicted in either green or white, while candlesticks that display a negative trend are portrayed in either red or black. The size of the candlestick indicates how much the price has moved during the predetermined time period. To illustrate, if there is a lengthy bullish candlestick, it signifies that the value of the currency pair has extensively gone up during this particular duration.
Time frames of Forex Charts
An understanding of the varying time frames used in forex charts during forex trading is crucial. Those who engage in short-term trading usually employ one-minute to one-hour time frames, while long-term traders opt for time frames spanning from one day to one month. Selecting a suitable time frame hinges on your personal trading goals and strategy.
Market Patterns on Forex Charts
Furthermore, forex traders can examine market patterns by using technical indicators like the RSI, MACD, and moving averages, which are all available in MetaTrader4 and MetaTrader5. These tools provide valuable insights into trend shifts, support and resistance levels, as well as other essential details on the market.