Metatrader, how it works [2021]

Metatrader is one of the most popular trading platforms among speculative traders. It is a complex product that has been on the market for many years and has proven to be able to fully meet the needs of professional and beginner traders.

In this article we will highlight the strengths and weaknesses of Metatrader and we will also talk about the best brokers that offer the possibility of using Metatrader for free.

Warning: not all the best brokers use Metatrader, indeed many have developed their own customized trading platform. We will analyze the topic later in our guide.

For those interested in using the Metatrader platform, we point out that the best broker that offers this platform for free is ForexTB (you can get it for free by clicking here).

What is Metatrader?

The Metatrader platform is a software developed to allow private traders to access financial markets and speculate. The project was developed in 2005 by MetaQuotes Software and immediately had a resounding success, as it has already reached the fifth version (although Metatrader 4 is still the preferred choice of users).

The software consists of two elements: a server and a client. The server must be adopted by the broker, while the client must be downloaded by the trader who wants to use it. Thanks to the client, the trader can see the quotes in real time, place his orders and manage his account.

The client software runs on the Windows operating system and has experienced truly unprecedented success. Many users appreciate it, for example, for the possibility of running Expert Advisors produced by third parties. Others because they consider it very reliable.

It must be said that the success and fame of Metatrader have decreased significantly in recent times due to the spread of brokers operating with proprietary platforms, such as eToro.

Hundreds of thousands of traders in Europe, are starting to use eToro mainly because they can automatically copy what the best traders do. You can sign up for free on eToro by clicking here.

In addition, even brokers that offer the possibility of using Metatrader for free also offer other alternative platforms. For example, ForexTB alternatively offers the possibility of using the exceptional WebTrader platform.

ForexTB

ForexTB is one of the best brokers ever among those that offer the possibility of using Metatrader for free. Indeed it is one of the best brokers ever among those available currently.

The success of this broker has been truly overwhelming: in a few years it has become one of the most used by European private traders.

What are the reasons for this success? Indeed, being able to use Metatrader for free is just one of many reasons. One of the most important is that it is a very simple broker to use.

All members receive phone support from real trading experts who guide them step by step. Literally, making mistakes is impossible.

These experts also provide personalized training to the novice trader: they explain everything you need to know, from the basics of trading to the most profitable strategies.

Furthermore, ForexTB is completely free and does not charge any type of commission. Spreads are clearly advantageous. Anyone who wants can also use an excellent demo for free, with no restrictions and no limits.

ForexTB, in addition to Metatrader 4, also offers the possibility of using a web-based trading platform. This allows you to access the broker practically from any device connected to the internet (computer, telephone) without the need to do any type of installation.

You can sign up for free on ForexTB by clicking here

How Metatrader works

The easiest way to open a trade on MetaTrader 4 is to use the “Order” window and then place an instant order on the market. Select the currency pair of your choice by clicking on the “Window” tab at the top of the MT4 platform, and then select “New Window”.

You can then click on “New Order” in the MT4 platform toolbar or press F9 to open an “Order” window. The screenshot below shows an “Order” window for the EUR / USD currency pair. From this, you should be able to see how easy it is to buy and sell with MetaTrader 4.

To trade on the market you need to enter the desired size (in lots) in the “Volume” box and then click on “Sell or Buy”, with “Market Execution” selected as the order type.

It is the “Market Execution” setting that allows an instant order within MetaTrader 4. Of course, market trading is not the only answer to the question of how to execute a trade within MT4.

You can also choose to buy or sell using a limit or stop order by selecting your choice from the drop-down menu. This process allows you to buy and sell on MetaTrader 4 at specific and desired levels, away from the current market price, instead of immediately executing at the current price.

In short, MetraTrader 4 is an adequate tool for those who want to play on the stock market using the simplest tools but also for those who need more sophisticated operations.

How to close an operation on Metatrader

How to trade with MetaTrader 4 is only part of the information a trader needs, of course. Once you open a trade, eventually there will come a time when you want to close it.

How do you exit a trade on MetaTrader 4? Select the “Trade” tab from the “Terminal” window (press CTRL + T to call up or close the “Terminal” window). You will see all the open trades that you have viewed in the “Trade” section of the “Terminal” window. Right-click on the order you want to close and select “Close order”.

An “Order” window will open. Click on the yellow “Close” button to close your trade. So, if you have two or more open positions in MetaTrader 4, and are wondering how to close one, this manual method is the way to do it, as you are specifying which individual trade you want to close.

How to set a Stop-Loss on Metatrader 4

As you can see from the “Order” window (shown in the screenshot below), there are fields provided to enter a “Stop Loss” level and a “Take Profit” level.

If you click on the up or down arrow in the “Stop Loss” field, the box will automatically populate with the current market price (the platform uses the offer price). On the graph on the left you can see how your proposed stop level relates to current buy and sell prices.

How to place a limit order in MetaTrader 4

To put a limit order to close a position, simply enter a target price level in the “Take Profit” field shown in the “Order” window (as demonstrated above). You can also use a limit order to open a position.

To do this, it is necessary to change the “Type” field from “Market execution” to “Pending order”. You can then choose “Buy Limit” or “Sell Limit” from the “Pending Order Type” drop-down menu as required.

How to set orders from Pips as default in MetaTrader 4

If you add a stop-loss order or a take-profit order when opening a trade, the default functionality is that the order levels are expressed in absolute market levels.

Once you have added a stop or limit order in this way, you can go to the “Trade” tab in the “Terminal” window (CTRL + T to open or close this window) and right-click on the trade you are interested in and choose “Edit” or “Cancel order”.

This opens an “Order” window that will allow you to change your order levels in terms of points (not pips) compared to the current market price. In order to change the behavior in MT4 to allow you to specify stop and limit orders in pips as default, you need to run a script or EA (Expert Advisor) to change the functionality of the platform.

Automated Trading on Metatrader 4

Metatrader is a platform for manual trading, but it also offers 2 fantastic opportunities:

1. Create your own algorithms and programs for automated trading
2. Upload the trading programs created by others to invest automatically

Most fully automated trading trading robots such as FAP Turbo and Forex MegaDroid can operate within the environment of the trading platform provided by MetaTrader as Expert Advisor or EAs. However, no guarantee can be given for their effectiveness.

Fortunately for most software and trading newbies, these EA programs are particularly easy to install into MetaTrader and usually come with simple instructions.

Basically, once the MT4 or 5 has been downloaded from its developer’s website and installed on their online personal computer or on a trusted remote server, the trader usually just needs to install the EA software inside the subdirectory MT4 or 5 appropriate.

At that point he will probably want to run the MT4 and associate the EA with a price chart drawn by the platform for a particular currency pair or commodity and a period of time with which the EA is appropriate for use.

After a trader has set the EA running on a live or demo account held with an online forex broker, the EA software will scan the market for trading opportunities.

When it finds one, the EA will automatically size and perform an appropriate operation. The EA usually also simultaneously places liquidation orders in the market to close the position for a profit or a loss, depending on how the market ultimately moves.

Learn more: Automated Trading

Metatrader 4 and 5 in comparison

MT4 is a really great platform for mobile. By saying this, we are referring to trading not only on the computer, but also on smartphones and tablets. MT4 is available in three different formats: desktop, mobile and browser. Both the mobile (iOS, Android) and the MetaTrader Webtrader web platform are fully compatible with the desktop terminal.

If you open an order on your computer, you can easily manage it from your tablet via the mobile version for Android / iOS devices. All data will be displayed correctly. The main point with the browser and the mobile platform is that you are independent of time and place. You are always able to check your account or choose to close an order at any time and from any device connected to the Internet.

Multi-functionality of MT4

MetaQuotes Software Corp has implemented many different functions for trading Forex & CFD instruments. MT4 offers various trading and analysis technologies, as well as additional services for professional traders. It has a lot to offer for Forex & CFD trading. One of the key strengths of MT4 is algorithmic trading. Algorithmic trading refers to trading with the help of automated trading systems.

Expert Advisors (EAs) trade with a predetermined algorithm as we have seen above. The MQL4 IDE is integrated into the platform, which allows you to create a personal advisor or a trading robot of any complexity.

Most new traders are not familiar with MQL4, but can still use the integrated ‘MetaTrader Market’ app store and the free ‘Code Base’ library. There you will find everything you might need for efficient trading – a variety of different technical indicators, scripts and EAs.

MT4 Security

In MT4, the exchange of information between you, the terminal and the platform servers is encrypted with 128-bit keys. The platform also supports an enhanced security system based on RSA – an asymmetric encryption algorithm.

Benefits of Metatrader 5

As you probably know, the industry is slowly but steadily shifting towards MetaTrader 5 (MT5). MT5 is probably the future of retail trading. Let’s find out what’s so special about this renewed platform:

• Coverage allowed
• No FIFO rules
• Integrated fundamental calendar
• Commercial integration
• Improvement of graphs and times
• Exclusive first-class indicators
• Ability to multiple orders on the market
• MT5 Supreme Edition plugin integration

One of the main advantages of the MT5 platform is that traders are not limited to using the built-in analytical resources, such as MT5 tables, indicators and charts. Thanks to MQL5, an object-oriented and high-performance programming language, traders are able to create their own technical indicators.

Coding should be much simpler than MQ4, so traders can also create trading robots, or Expert Advisors (EAs). Trading robots (EAs) are able to automatically implement different trading strategies based on a variety of different inputs.

In this way, traders will have the opportunity to access very accurate market analysis and forecasts. Starting with Beta Build 1281, the MT5 allowed coverage that was only possible with the MT4.

Now, traders can use the netting model for trading exchange and hedging instruments for currency trading, using the MetaTrader 5 institutional platform.

MetaTrader 5 also offers advanced order management features (for example, filling orders using multiple trades, including partial fills). If a trader has an open position on an asset and executes a new trade, a new position is opened.

This is the idea behind the MetaTrader 5 hedging system. The trader can set Stop-Loss and Take-Profit levels, as well as see the profit level for each position.

Metatrader Pros and Cons

The Metatrader platform is considered the optimal choice by many traders. The main advantages are the great reliability of this software and efficiency. Another very important advantage is the ability to create trading robots using an MQL programming language.

In practice, it is possible to code a trading system and a trading strategy thanks to this programming language. Metatrader takes care of executing the instructions received.

Of course this doesn’t mean generating automatic profits (as many novice traders believe): profits come if the trading rules are coded correctly. Unfortunately many sellers of Metatrader robots are real scammers, marketing and non-trading experts.

We can say that those who want to do automatic trading would do much better to use eToro which allows you to automatically copy the best traders in the world and it really works.

Among the main disadvantages of Metatrader we must certainly include the need to install the software in advance before starting to use it. Some novice traders find Metatrader actually unintuitive.

That is why the best brokers, such as ForexTB, offer both Metatrader and alternative web-based platforms. In this way, the trader has the possibility to use the system he thinks best, when he believes.

Alternatives to Metatrader

If until a few years ago Metatrader was really the only solution for those wishing to trade without technical problems, today things have changed profoundly.

In fact, most of the best brokers have developed their own customized platform, able to fully satisfy the needs of any client and, often, also provide valuable additional help.

Many beginners, for example, consider eToro's platform as the easiest to use. Not only because it is really simple and intuitive (even for those who have never done online trading) but because it is even possible to copy, in a completely automatic way, what other traders are doing.

How? Thanks to an innovative patented software, it is possible to easily identify the traders who in the past have obtained the maximum profit with the minimum risk. Just select these traders and start copying them. The software will replicate all their operations in real time.

The advantage for the beginner is really double: he can immediately get the same results as the best trading experts in the world and, at the same time, he can learn from them by observing what they do live. Perhaps the best online trading course you can take today.

You can sign up for free on eToro by clicking here

Conclusions

Metatrader is undoubtedly an excellent solution for those who trade online. It is not necessary to pay to use Metatrader, you can do it with completely free registration with brokers such as ForexTB.

In any case, today there are solutions on the market (still completely free) that beginner traders consider better or more suitable, such as the eToro broker that allows you to automatically copy the best traders.