Trading on the foreign exchange market wouldn’t be complete without the use of MetaTrader 4. As one of the leading trading platforms out there, it can assist the endeavours of beginners and experts alike and can be tailored to specific needs for the most worthwhile experience. With this in mind, here’s how to trade Forex using MT4.
Why use MetaTrader 4?
At its core, MT4 is a trading platform that was designed to cater to the needs of Forex and CFD trading and can be used by companies, brokerages, trading experts, beginners and everyone in between.
This platform aims to provide a comprehensive trading experience that can be customised, automated, used as an alternative to proprietary software and so much more. Traders can make use of a host of well-appointed features and functions to increase their chances of making worthwhile financial moves.
You’ll have access to:
- Instant trade execution
- Pending orders
- Customisable stops and limits on open positions
- Tools to customise MT4 charts
- A host of indicators and add-ons
- Changeable time frames
- Price alerts
- Downloadable trade reports
- Trade history
How to trade Forex on MT4
When you want to start trading on the Forex markets, you’ll need to open an account with your chosen brokerage and download MT4. Before you begin trading with real money, it can be a worthwhile idea to visit the demo account feature and open some positions to familiarise yourself with how everything works. Once you feel confident in your efforts, you will be able to fund your account and open your first position. Ensure to research the latest forex and market news to help you with your trading strategies.
How to trade currency pairs
As the name may suggest, a currency pair is two currencies put together - one is considered the base and the other the quote. The aim in Forex trading is to compare one to the other to define a profit margin. The base currency is the one you will ‘buy’ and the quote is the one you will ‘sell’.
When using MT4, traders will typically use the order window to open a position instantly. Here you can select any currency pair, take a look at the market bid/offer, enter how much you want to trade at (which is defined in ‘lots’) and proceed with the Market Execution feature. There is also the option to use a limit or stop order to minimise risk when the trade’s value moves too far away from the current price, resulting in a loss.
Using leverage
The MT4 platform is used by a host of brokers as an alternative to their proprietary software as the features and functions are so varied. When you get involved with the Forex market, you will typically use a trading strategy that relies on leverage. What this means is that you will deposit a margin amount and use it to trade with the support of borrowed funds. This allows to you take up more lucrative positions, but don’t forget - while profits are maximised, so too are losses.
How to close a trade
When using any platform, it will be a good idea to understand how to close trades before placing them. If you’re not familiar with the process, you could take time learning how at the wrong moment - and if your position is already in the negative, your losses could grow *even in the short amount of time it will take to do so).
The process is straightforward and all you’ll need to do is:
- Click on the Trade tab on the Terminal window to see your open trades
- Right-click on the order you want to close
- Select ‘Close Order’
Is MetaTrader 4 the only way to trade Forex?
There are other ways to trade Forex, but MT4 is one of the top platforms out there and can help you to make more educated trading decisions. There is a Copy Trader feature, plenty of tools and indicators to use and an array of customisable functions that can make all the difference when making a profit from Forex trading.
Of course, there are risks to be taken into account when trading in any shape or form, but MetaTrader4 can help to ensure that losses are minimised and that you trade safely and securely. Be sure to do your research and make use of demo accounts to trade with virtual cash first; you can read more about MT4 here.
Disclaimer:
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.The vast majority of retail client accounts lose money when spread betting and/or trading CFDs.You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Marketing for CFDs and spread betting is not intended for US citizens as prohibited under US regulation.
Tax treatment depends on your individual circumstances. Tax law can change or may differ in a jurisdiction other than the UK
