The world of Forex trading can be extremely daunting to someone who has just started to trade. There are so many terms to learn, and even the charts of Forex prices themselves can appear rather confusing at times. Fortunately, it is possible to get a better grasp on all of this if you are willing to start with the basics. Today, we take a look at MetaTrader 4, a trading platform used by most Forex traders online, to see how it works and what you need to know about using it.
Understanding MetaTrader 4
The market for Forex can be viewed through a number of different ways, but most choose to use a trading platform like MetaTrader 4 to get their information. The name of this real-time operating system is often shortened to just the MT4 platform. If you talk to anyone who has done some forex trading for any period of time, they will know what you are talking about when you reference it like this.
The trading platform is available through a variety of sources online, and almost any Forex broker that you choose to sign up for an account with will have it available for you as a free download. In fact, even if you just sign up for a demo account, you can still usually get the MT4 platform to practice with. That is a nice perk that most brokers are able to provide to you.
Why is this operating system better?
One might wonder what is so special about this platform in the first place. It is possible to choose to invest in Forex straight from your laptop or Mac, but there are a number of reasons why using a more powerful system just makes sense. Here are a few of the things you get with MT4 that do not come standard without it:
- Technical Indicators
- Extended Time Frames
- More Precise Trade Execution
While these things might seem somewhat minor to an outside observer, the truth is that each one matters in its own unique way. The technical indicators help a trader best understand where the market has been up to this point, and perhaps where it going in the future.
Extended time frames are important to see how the currencies have behaved with one another over different time periods. It can help a trader get a broader or more narrow view of the situation. Finally, the trade execution is critical to getting just the price that you desire. In some market situations, it really pays to move quickly.
If you are not the first one in on a particular trade, then you might lose out on the whole opportunity to cash in on whatever price move has caught your eye.
Making a trade
No matter if you are sitting in London, New York, Tokyo, or even in your basement flat in the middle of the countryside somewhere, you can trade Forex. You just need a reliable Internet connection, your Forex brokerage account, and your MetaTrader 4 platform pulled up and ready to go.
Once that is all set up, you can start to perform your technical analysis on real-time market data as it floods into your screen. The Forex market is constantly on the move, so you have mentally planned a trading strategy in order to be successful and ensure your forex trades are profitable.
Before you place a trade, you might want to speak with an FX advisor on how to be more profitable in the Forex market. There are expert advisors who have worked in the Forex markets for much of their life. They understand how these markets work, and they can provide a lot of insight as to what to do or not do when you are trading.
Explore the data points provided to you on your account, or create custom indicators that you can use based on your own research to spot the good trades. You might just uncover some trading opportunities that no one else has managed to spot.
When you are ready to place your order, go to the Marketwatch choice and select “New Order”. From there, you select other factors such as the stop loss or limit parts of your action. Additionally, you can decide to either make it a market order (executives immediately at whatever price the market offers) or a limit order (only executes when your pre-set price level is matched.
Saving your preferences for later use
A Forex trader can spend a significant amount of time working on their particular preferences and setup when executing a trade. It is a shame when they put all of that time and effort into something only to have to start it all over again the next time they start to trade.
With metaquotes software, it is not necessary to leave your work behind. You can save what you have done under “profiles” to make things a lot easier to return to again in the future. Whatever you have set up in the past can be accessed once again and one can begin again from wherever they left off the previous time. If you particularly like trading however you have been trading in the past, then this is definitely a good way to do it.
Opening multiple charts and monitoring
Only a real Forex trader understands the importance of keeping multiple charts and tabs open. The more that you experience the market and trading in it, the more you will understand why this is so critically important. It is a great idea to always have an eye for just about everything that is happening so that you know how it impacts whatever particular currency pair it is that you wish to trade.
MetaTrader 4 makes it easy to view multiple charts as well as all of the data that goes along with them directly from your computer. You might just look like an old-school Wall Street type with all of that information on your screen, but that is the type of data that you need to make informed decisions.
A parting word about being patient with the system is definitely called for. It is incredibly easy to obtain MetaTrader 4 and even to start trading with it. However, it is frustrating to some when they attempt to jump into the system too quickly. If you do not take your time and do your homework, this platform can indeed become irritating.
It is fully-loaded with all of the great features that you would expect it to have, but if you do not understand those features, you might just throw up your hands in exasperation. Instead of doing that, consider taking some time and learning the system inside and out.
The only way to get better at something is with practice and patience. MetaTrader 4 takes both. You are probably best off setting up a demo account at first in order to learn how to use the platform without losing any of your real money. At least in this way, you will not have to worry about learning your lessons in a way that costs you real money.