The first step to learn how to trade the foreign exchange market is to be familiar with the MT4 platform, just like a soldier must be familiar with his weapons before going to the battlefield. MetaQuotes developed the MetaTrader 4 platform. Since its release in 2005, the platform has dominated the retail foreign exchange trading market due to its innovative features. The platform continues to dominate the industry up to date, with more than 95% of brokers offering it as a trading option to their clients.
1. Users can freely write EA and indicators
The leading advantage of the MT4 platform is the unique and efficient MQL4 language and editing functions. Users can write any automated trading program (EA) and personalised technical indicators they want using this simple programming language.
Before the launch of the MT4 platform, traders in the online market trading could only use the technical indicators that came with the broker’s software. Traders could only modify the indicators available to a limited extent but could not change the logical framework. As a result, it was impossible to design an indicator or automation strategy based on your unique ideas. MT4 came to fill this gap. As long as you learn the MQL4 programming language, you can add any analysis tools you want on the market panel.
Even if you don’t want to learn to program, you can find a professional third party to write an automated program for you. The fees are not very high; hence, most people can afford the service. Driven by the MT4’s flexibility, most market analysis software began adding programming functions, but they are not as straightforward or efficient as the MT4 EA’s.
2. The user interface is concise and organised
Time has proven that the simpler a software, the more it is loved by users. Unfortunately, most people developing market information software have misunderstood the above concept thinking that integrating more functions will attract more users.
However, the MT4 for Mac, PC, iOS, Android applications take a different approach, abandoning most of the less-used functions and placing the frequently used functions in the most conspicuous positions. Users no longer have to deal with a wide array of messy buttons for all the different functions. Information about all other functions is displayed on the homepage. Although the platform looks very professional, it can be confusing and challenging to figure initially, but things get easier over time.
3. High degree of freedom
If you don’t like the MT4 platform’s primary colour, you can change it to suit your preferences. You just right-click the colour panel in the properties tab, where you will find many customisation options. For example, traders in Europe and the United States use red candles to mark price declines and green candles to make price increases, while traders in Asia, on the contrary, use red candles to represent price increases and green candles to represent price declines. Such an obvious problem is addressed by the MT4 platform, where traders can switch candle colours, while most other software only provides a single colour scheme.
MT4 contains a large number of in-built technical indicators, which have a large number of custom options, users can easily adjust to suit their preferences. However, the new generation of young traders don’t like to use fixed indicators; instead, they prefer to make adjustments by themselves. Therefore, if the market software sets most of the parameters to default values that cannot change, it is destined to be abandoned by the new generation of traders.
4. Backtesting Strategies
The MT4 software does not only allow traders to write EA software freely but also to back-test the created EA strategy. This is an efficient function, especially for quantitative trading enthusiasts.
Nowadays, most market information software imitates the strategy backtest function invented by the MT4 platform. However, after a round of testing, there is no comprehensive and detailed report such as the one provided by the MT4. For example, the MT4 platform allows for Tick-level strategy backtesting, which is pretty comprehensive. However, this requires robust back-end server data support, and most market data software cannot do this.
5. Export historical transaction records and capital curve
The above feature is not unique to MT4, but MT4 has the most comprehensive suite of capabilities. Especially after exporting historical records, detailed statistical indicators will be automatically generated, such as winning rate, profit-loss ratio, maximum drawdown percentage, etc., which play a crucial role for traders to judge the quality of their trading strategies.
Summary
MetaQuotes has announced that it will stop updating the MT4 software, and now they are promoting the MT5 market analysis software. The difference between MT4 and MT5 is not significant, the interface is very similar, but there are slight differences in the finer details. Objectively speaking, the functions of MT5 are much better with more choices for traders, such as the choice of the trading cycle. In MT4, traders can only choose a few fixed cycles, while with MT5, they can customise their trading cycle. However, the mainstream foreign exchange trading market is still using MT4, and the number of traders using the MT5 platform is quite limited.
Part of the reason for the widespread use of the MT4 platform is that most traders are used to it despite some of its drawbacks. The improvements within the MT5 platform are not revolutionary compared to the MT4 platform, which has a rich collection of third-party EAs and indicators used by traders. Unfortunately, the programming languages in MT5 and MT4 are not fully interoperable. Therefore, if you use MT5 software, you must rewrite your existing MT4 EAs, which is a huge task, and the gains may not be worth the loss.
Watch the MT4 guideline video to learn more.
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