A Comprehensive Guide to Trading Forex on MT4
1. Introduction to Forex Trading on MT4
Forex trading, also known as FX trading, is short for foreign exchange trading and refers to the profit or loss that is made by trading different foreign currencies against each other. The study of different forex markets and currencies, how they are affected by geopolitical events, as well as supply, demand, economic events, and market psychology, ultimately play a role in a trader’s ability to determine whether the exchange rates can be predicted or not. Trading forex means buying and selling global currencies and taking a profit or a loss from investing accordingly to the movements in the currency values.
If you are new to trading forex on an MT4 platform, don’t be intimidated. While MT4 appears to be similar to desktop trading platforms, it actually can do much more and it’s extremely flexible. You can customize it, automate how you use it, and tailor charts to your precise trading needs. In this forex MT4 guide, we’ll show you how easy it is to start trading forex with MT4 and provide you with some tips for profiting from its features.
1.1. What is Forex Trading?
For example, if you already have a job but are looking to earn extra income, it is advisable to consider the forex market to trade and not the stock market. This is because, unlike buying stocks, which is cost-intensive, hogs most of your personal time, and requires extensive knowledge of trading, forex trading requires you to know fewer things and have less money to invest in. Also, unlike stocks, which have long nascent periods, going long in stocks would entail you holding the stock for various years, while the forex market allows you to trade as many times as you want. This is actually participant-driven. In stocks, you cannot go short if you expect a security’s price to go up, but the forex market allows you to work your way to profits by going long or short. This makes securing a capital gain possible at any time.
How to Use MetaTrader 4: A Guide for Beginners
You’ve seen it written in newspapers, and you’ve probably heard it on the news even if you aren’t entirely sure what it is: forex trading. While its existence and success as a trading field have been slightly clouded as a result of the negative publicity created by losing traders who aimed way too high and consequently lost up to or all the funds they thought they would make, it still stands as one of the most lucrative businesses one can engage in. Apart from the figures involved that make it an attractive trading option, it also has far fewer constraints than trading stocks.
1.2. What is MT4?
In an easy-to-understand approach, the platform also provides online help and support for anyone new to forex trading. Right out of the box, this software is pre-installed with no delay data feed for major forex pairs accessible. It’s also free. If users would rather stream data from an exchange rather than their broker’s connection, they can always subscribe to a data feed package without restriction, allowing them to trade other securities such as stocks and/or commodities. Not only are these displays user-friendly and accessible on a side-by-side basis through the purchase of different securities, traders are comfortable making such changes. With MT4, a concurrent link to multiple forex brokers is often permitted. Thus, users can trade and see real-time transaction privacy and competition. Traders are expected to receive alerts or messages via email or mobile or even use financial news in real time as it comes. Very clearly, MetaTrader 4 is a customer-friendly software.
1.2. What is MT4? MT4, short for MetaTrader 4, is a software that many traders in the world of online forex trading use because of its many benefits and features. In addition to displaying forex prices in real time, the trading platform allows for accurate and instant transaction implementations using trading systems, expert advisors, or other external tools. The platform has found enormous popularity and is being adopted by the majority of the forex broker and exchanging companies. The platform combines its simplicity and usability that most retail forex traders want. With its automated trading feature, the platform is great for both active and laid-back traders. Users can also greatly benefit from its built-in technical indicators and charting tools that are mostly essential for a trader to make a decision.
2. Getting Started with MT4
You install a profit forex expert advisor to the existing forex online trading platform, which is connected to the server broker, adjust all the settings, and the advisor will begin trading according to a preset strategy. Many will tell you how to install an indicator, a script, and what expert advisors are, but few will help you understand, create, upgrade, or install tools tailored to the individual trader. You can get all of this on our site.
If you have decided to start earning money on Forex, having weighed the pros and cons, you can find a wide range of useful information including charts, quotes of financial instruments, trading signals, and tutorials on the web portal. Improve your financial management and take advantage of a walk through the asset market by remaining at home or even on the go, with just one click.
With the MT4 trading platform, you are safe and secure. The MT4 platform will allow you to open and close positions as well as carry out advanced charting and complex analysis. All of this and more on the binary options site for the Forex trading market, simply accessible by utilizing the ‘Auto Trading’ method provided by the broker.
Once you have found a broker that is credible and responsive, you can easily set up your account and start trading on the Forex market. Online registration only takes a few minutes, and together with the rewarding bonuses you can receive from secured and regulated brokers, your first deposit can grow, giving you a head start at your trading career.
2.1. Downloading and Installing MT4
In order to download a MetaTrader platform from any of the brokers that support it, you will need to register for a demo account. After the registration process is over, you will be taken to the download link for the MT4. The entire process will take 5-10 minutes of your time. If you’re interested in trading on the MetaTrader platform in real time, then you can also ask your broker to set up a real account for you. After the trading account is set up, then you will be forwarded to the MT4 platform where all that you see in the demo platform is what you will also see in the real account.
If your broker is not able to give you access to the MetaTrader platform, then you can download it online. You can download it from various online sources, for example, forex brokers or software companies who develop the technical analysis software. The only difference will be that when you get it from the brokers or the, they generally provide you one platform which is especially configured for their company.
2.2. Setting Up Your MT4 Account
You should keep these two pieces of items secret and don’t give them out to anyone because if a smart aleck logs into your account, he/she can gain access to your personal information and other confidential details about your account. After gaining a favorable experience of the market, you can then proceed and open a real account for trading. You will also need a username and password from your broker dealer who is in a better position to provide you with all the information and advice you need to be successful as a trader. Such advice usually comes in the form of varied daily market research. Such information is usually updated on a regular basis and the factors that the dealer considers might have a significant effect on the market are made known to all dealers.
Once you have successfully installed the MT4 software, you can go ahead to open a demo trading account with any broker in your neighborhood. All you need is an internet connection. The idea is to experience the real market and its conditions before you start trading with real money. Then, on the software itself, sign up by following the instructions and choosing a broker dealer that is registered and recognized by the relevant local authorities. That is very important because it’s not good to open an account with a dealer that is not recognized by the relevant local authority. You are most likely putting your money at risk. After successfully opening a demo account, you will then receive a username and password that you will use to log into your account.
3. Understanding the MT4 Interface
There are 3 different types of charts you could use when trading Forex. These are as follows: Line Charts – A line chart is a chart that draws a line from one closing price to the next closing price. Time is not a factor as all you are plotting is the closing prices. The problem traders have with this chart is that it does not show which of the open, close, high, or low prices actually make up the closing price. The chart does not show that the market might have spiked up or down during the session. Because there is only one price on the chart for each time period, it is difficult to determine how many trades took place to move the price level substantially.
There are many different styles of charts that can be used for technical analysis.
The information about financial instruments is presented as a chart. The chart displays market data at a particular point in time known as the last price of the market. The last price is the first price that the market at large sees after you place a trade. With a Forex trade, however, the last price is available to you instantly because it is under your control. Once you place an order, quote information including the last price becomes available to you for your placed trades.
Charts – Visual presentation of an instrument’s price movement.
3.2 Analyzing security price data
• There are a number of ways to open a new chart. • Click in the main menu, choose [New Chart], and then the symbol you prefer, or drag and drop the symbol from the Market Watch window to the chart window.
3.1 Opening a new chart:
3.1. Market Watch Window
Additionally, a handy tooltip will automatically pop up when the mouse is placed over any instrument in the Market Watch window and display its spread, swap, and pips value. A simple left-click on the instrument listed in the Market Watch window will bring up its symbol-specific forex trading charts in the main window. The lowest part of the window shows lots of information about the forex trading currency pairs and instruments on the table. They include the following buttons from left to right. These toggle the display of currency pair quotes – either with a High and Low price values or simple Bid and Ask price quotes.
By default, the Market Watch window in MT4 opens as soon as you sign in. It is located just below the main window and it contains all the forex trading instruments you need. If it somehow doesn’t appear, simply right-click anywhere in the database array and, from the dropdown list, click on “Show All”. This ensures it restores the screen and displays the forex currency trading instruments. It is also useful for trade management purposes. Together with the pairs you trade, use it to observe and track the economic news red flag warnings in real-time. This tells you when the market is getting heated up with price action, meaning that trading the news announcement will generate more pip contraction.
3.2. Chart Window
When you use more time like H or daily trading, we can limit the trade time in a shorter working time to increase the probability of making money during trading at trading time. Trading at the end of the day is a trading operation that only takes place after the market closes for a day, approved after further analysis. High or low volatility is unlikely to be a predetermined requirement for trading. Among potentially hundreds of reasons, confluence is the most important to find a good trade mark. The differential window of trading is another intention that it does not act as an expert advisor, but if we stop trading using a trading notice on a percentage of limits or the position of their new stop loss to help avoid possible tallations, we can leave a small operating feed upon verification.
Introducing new forex, metal, and CFD products from EstocksX MetaTrader4 platform. Banks’ growing fear of virtual currencies. The chart window shows the price dynamics of financial instruments shown by a trade server in a currency symbol in relation to the base currency. The Elder-Ray index by Alexander Elder shows the power of bulls and bears and remains overbought and oversold for quite a long time. Implemented by Vladimir Karputov. The ability to watch the trading history, so that you can view all transactions, open and closed, including profit and loss data, general information on the balance curve, and many other data is a feature closely available in the Formax standard for all tests, which is the number one step to improving the concept of day trader operations.
3.3. Terminal Window
Of course, how you use it is up to you. The technical indicators tab comes with all sorts of exciting and complex indicators that you can place on the top of your charts, but unless this is your actual intention, please do not be so trigger happy that your charts end up as a cluttered mess that is undecipherable! This is the news tab. No indicator that we have provided about stone data in the bread fustel. Its elements include fruit centers, of which there are only a few, as well as gore centers, and their essences. Centers such as news events that come from real forex economic calendars. In each of their price cargos that trigon your platforms regarding their status use of all information, are you open stress when imp along in the teleomiter. News indicators and events don’t expect any major economic events today were actually going to be primarily based on the news feed. I’ll give you more detailed list of reputable economic news calendars to monitor in Chapter 12, but here are a few ideas for a look for excellent mann calendars at which you can find solid news and information.
The terminal window gives you access to your account information, including the account history, current open trades, post, equity, the margin, and any available funds. It also provides information about the time, showing the platform, broker, and server. This information will be widened and the screen will change, so that there are four columns rather than just one. The trading option will be the first of the four tabs and this is from where you will execute your buy and sell orders. Open trades will show you your currently open trades, and trading history will be the currency denomination. As you’ve probably already guessed, this is where you can access information about what is happening in the market, including current news, up-to-the-minute currency rates, and advice on what signals you should be looking for. It’s a little tab used by traders to a much greater capacity, but it is there primarily for recreational traders who wouldn’t spend all day watching from Forex pairs.
4. Placing Trades on MT4
Select the “Market Execution” or “Pending Order” tab to select a given order, depending on the type of deal you want to implement.
If you are making a buy or a sell deal, you will then be asked to select labels, amount, and take a profit here. If you have already realized your order, the other two steps are even more important.
Order – This is where you will make buying or selling orders. If you want to execute a smart trade, you can fill in all relevant details like stop loss, take profit, etc., and open a more comprehensive order form by selecting “Order” at the bottom of this menu.
You can trade that currency pair by clicking on the icon.
If you want to trade directly from the Market Watch window, right-click on the image and select “Trade” or watch the button.
Search for a currency pair in the Market Watch window. Right-click in the window and choose “Show All.” You can search for symbols. Changing USD for GBP in the name of the currency pair will show you the amount of US dollars it costs in GBP. If you prefer to trade EUR/USD, for example, click on it to experience what you want the action to be.
At the bottom of the MT4 interface, you will find the Terminal window, which has a few tabs at the bottom.
How to place a trade on MT4
4.1. Market Orders vs. Pending Orders
Buy Limit is a pending order to buy a currency at a lower price. The current price level is higher than the value of the placed order. Sell Limit is a pending order to sell a currency at a higher price. The current price level is lower than the value of the sell limit. Buy Stop is a pending order to buy a currency when its value is higher than the current price. The current price level is lower than the value set in the order. Sell Stop is a pending order to sell a currency when its value is lower than the current price level. The current price is higher than the value set in the order. Order Levels – the level is designated by a straight price line, which can be moved vertically (up or downwards). The line changes its color in accordance with the order level: Magenta: Buy Limit line, Yellow: Buy Stop line, Blue: Sell Limit line, Red: Sell Stop line.
So far, we’ve been looking at market orders (quick order to buy or sell at the prevailing market price). You can also place pending orders, which are orders to be executed at a later time. There are four types of pending orders, as described below:
4.2. Stop Loss and Take Profit Orders
How to place a stop loss order on the platform? Having an open position in the trade tab, you need to specify a stop price next to the activation/deactivation cell. This action will prepare an order to the server to place a similar stop loss order. Then, enter the necessary stop loss price and click “Modify”. After that, a stop loss order will appear in the tab below. Now, the open position has an associated stop loss order, which will close the trade at the level set by the trader. In a similar way – having a new order waiting in the “Pending Orders” tab, you can specify the level of the Stop Loss order and the platform will prepare an instruction to the server to place the appropriate order on the chart.
Stop loss – an order to buy or sell that is placed by the trader at a certain level that is less profitable for them to open a position. The stop loss order limits potential losses when determining the trader’s risk. The stop loss order will be executed at the set level, but not worse – the position will be closed at the best available market price.
5. Analyzing the Markets on MT4
Analyzing the market is a key step to trading. By doing so, you are allowing yourself to make more informed trading decisions. There are two main tools available when analyzing the markets on MT4. The first section, found on the left-hand side of the platform, is devoted to currency pairs and the specific prices are updated here on a real-time basis. As soon as you open up the platform, you will already see six different currency pairs available: EUR/USD, USD/CHF, GBP/USD, USD/JPY, NZD/USD, and AUD/USD. This is based on the default settings. However, these exchange rates are continuously changing and you are free to customize the list according to your personal preference by deleting a pair or adding a new one. You can do this by right-clicking on a specific pair or by right-clicking the “Market Watch” section and then clicking “Symbols”.
Great! So you have finished the first step in your trading journey. That’s awesome! Now you can head to the Plus500 trading platform, where you can discover various markets with a wide range of instruments to trade. If you haven’t gotten around to signing up for a trading account yet, you can sign up right now! In this section, we will guide you through the forex market on MT4 and show you how to analyze the market using the platform.
5.1. Technical Analysis Tools on MT4
MetaTrader 4 provides 3 types of recording charting and dragging it on the chart. These are temporary, drawing-only features. With the end of the reference format, they will disappear temporarily from the chart as soon as we conclude our research over the forex market. They cannot be seen any longer before the record is destroyed. Address fixed may be used to record it permanently. After placing it on the chart, we do not need to do it again and start our recording again. Temporarily defined fields provide temporary memory in MetaTrader 4. The chart part that is on the screen and inside of these tools is lost once we close the platform. Therefore, investors cannot concentrate on short-term movements or position approximations or strengthening levels subject to behave as future notes.
On MetaTrader 4, we can draw different shapes on charts such as lines, channels, and so on. It is very good for marking specific levels and objects on charts. After these tools are used, we can continue our drawing and research using our findings over these levels. Namely, when the tools give their specific signals, it is time for us to monitor them.
5.2. Fundamental Analysis on MT4
The MetaTrader 4 trading platform has a lot of built-in functions intended for conducting basic financial analytics. However, at times some traders confuse basic functions with specific research methods. The MetaTrader 4 platform is perfect for beginners and elements of fundamental analysis with its additional built-in indicators, professional trade execution capabilities, and advanced charting tools. The platform is capable of performing all simple trading tasks and to ensure safe trading using additional software programs called Expert Advisors. It presents several fundamental indicators and has applications to download and install from the code base. If that’s not enough, users may find additional news information and other advanced technical analysis and trading indicators from third-party software packages.
2. Trading forex on MT4 5.2. Fundamental analysis on MT4
MT4 comes with a plethora of features that make it a go-to platform for comprehensive technical analysis. However, one often overlooked area is fundamental analysis. While it’s true that the platform by default lacks in terms of fundamental analysis, third-party plugins can help you collect news, indicators, and insights from within MT4.
2. Trading forex on MT4 5.2. Fundamental analysis on MT4
6. Risk Management in Forex Trading
The rule, which is generally followed by many traders from all over the world, is to keep the maximum risk in case of a losing trade to 1-2%. The most frequently applied trading strategy corresponds to the market levels and indices forecasting. A key support resistance level necessary for further forecasts or take a profit is used, and it is usually determined based on the relativity of the closing price to a critical level. Afterwards, through the graphical tools, a drawing is carried out, so that the future levels of a market will be projected. When a connection between the primary market levels and past highs/lows is being formed, a considerable market level will come into existence. This is the main level, by means of which the market dynamics can be determined.
Risk management is one of the most important aspects of forex trading. With a clear plan of how much to risk and when to stop in case of a losing trade, it is possible to control the trading risks and enjoy safe and confident trading. Keep in mind the following rule: only around 5% of risky capital can be used for the trading account, and each position cannot be exposed to a market with more than 10% of the entire account.
6.1. Position Sizing and Leverage
1% x 1,000 2% x 500 3% x 333 4% x 250 5% x 200 6% x 167 7% x 143 8% x 125 9% x 111 10% x 100
RISK PER TRADE AMOUNT OF ACCOUNT
One key part of a forex trading plan is making wise decisions about the amount of leverage in that plan. I’m in the camp that believes that too much leverage is dangerous. But so is too little, because more leverage in the time of a greater win enables larger position sizing and a proportionate increase in portfolio returns. A simple, straightforward way to take advantage of that relationship is by using the Position Size table below.
7. Advanced Strategies for Trading on MT4
Before exploring these advanced strategies as professionals do, you need to keep in mind that each of these strategies needs to be practiced with discipline, risk management, and a clear plan before they are combined in a trading system which can be used together. Your choice is based on where you want to stand when you enter the market. Create a trading plan defining the risk of every trade and never use money that you cannot afford to lose.
This book is directed at enhancing the knowledge of the traders who want to advance their trading to a greater level. It is about advanced trading that most strategies have failed to teach and turned its back on. Readers are introduced to a more profound understanding which deals with predictive strategies that are intended to guide you when to start trading and when and how to move towards the exits. Success cannot be achieved with luck or done overnight, trading needs to be done and decision making based on tested methodologies and proper risk management are part of it. The aim of this book and traders is to create a personal methodology that will lead to its own success in trading.
7.1. Scalping and Day Trading Strategies
One strategy is to look to trade the major currency pairs at the start of the London or New York sessions as there can be better trading volumes in these situations that can lead to more opportunities. Trading near the close of the session can also be an option from time to time. Also, trying to find strong chart patterns that stand out is key for successful day trading. Keep in mind that over-trading can hurt your trading account if not managed properly. Also, scalping may not be allowed in your live trading account, so please check with your broker before trying to scalp in a live account.
When trading on very short-term time frames, you are looking for small gains with more frequency. This leads to using small charts like 1, 5, or possibly 15-minute time frames. Small gains of usually 10-20 pips would be typical in this situation. Very tight trailing stops could also be used in order to capture extreme movements. When scalping or day trading, it is advisable to only take 1-3 trades per day in order to reduce commission costs and to not crowd your technical analysis. You want clean charts to help you see potential trade setups easily. On the MT4 trading platform, you can scan the various trade windows to try and find trade setups rather easily. But remember, good chart patterns will show up regardless of what you use for a trading platform. A bad system will be a bad system no matter what software you use. It is important to keep your charts clean with only accurate and clear trade setups.
8. Common Mistakes to Avoid in Forex Trading on MT4
Accountability can be affected by the aforementioned factors. Profits can be limited by the leverage offered by forex trading. Caution should be exercised when using leverage in forex or CFD trades due to the inherent risk involved. Sales tax or securities transaction tax may apply to foreign currency and CFD trades. The use of leverage and margin can increase liability. Clients seeking guidance on financial matters can consult with a financial advisor. Online, both the Financial Conduct Authority and the Gambling Commission can verify the legitimacy of any transaction. If desired, consultation with a financial advisor is recommended. Insufficient funds and low risk tolerance are other significant risks in trading. Many traders fail to rely on sound expertise when investing in the forex market, which can lead to significant financial losses. Take risks wisely. This concludes the overview of key points.
Forex is a highly speculative market and presents the risk of loss. It is most suitable for individuals with the right experience. Before engaging in currency exchange or CFD trading, investors should employ a strategy to mitigate risk. Prior to initiating any trades, futures contracts or options should be carefully considered and only traded with disposable funds, not surplus funds. All clients should immediately seek guidance from a regulated financial advisor. Investors who are not prepared to accept potential losses should consult with a professional consultant, as they may not fully understand the risks involved. Trading forex without a stop-loss order entails immense danger.
8. Common Mistakes to Avoid in Forex Trading on MT4
7. Tips for Novices: Example Strategies
8.1. Overtrading
The forex market is particularly good for many people; it actually appeals to gamblers. Volatility in the forex market cannot be uninvented. Nor can its popularity be. Therefore, the existence of the market is not a problem; rather, the issue is how to make money. A simple way to make money is to bet without entry restrictions, and to use only the visual reference of price action signals. As for the concept of overtrading, one rule of the system naturally creates two rules. If a potential trade has not occurred, you should discipline yourself not to trade. Finally, since traders become nervous when cash disappears, it is most important to point out that it is far easier to catch a fish in the ocean than with a dry hook.
For the traders of this type, the market waits quietly to catch them unaware and unprepared. The main reason behind overtrading is greed. This is self-evident to many people but this does not fully illustrate the convoluted emotional patterns which underlie the cause. Fear is a completely baffling and simple error of judgment. They think if they can only make enough money from just one trade, they will be happy. Trying to trade all possible movements will only reproduce a series of losses, no matter how successful you may be. The question traders should ask is, “How can I have more chances of success?”
One of the most common trader errors is the ultimate mistake of overtrading. There are many reasons for this mistake, but most of them are underlined by the depth of pocket, lack of experience in the forex market, or as a result of continuously winning trades. Some traders think they are on a roll and their good fortune will never run out. It is at these times that a series of losing trades are inevitable. It is not by chance that the market behaves exactly the same way: once you are unprepared, the market will take advantage of your overconfidence and give you a hard time in your trades.
9. Conclusion and Further Resources
Trading forex and CFDs on the MetaTrader 4 has never been easier. And with the convenience of mobile trading, users do not have to be confined to their desktops. Now, more than ever, MetaTrader 4 is one of the best platforms on which to trade as an active forex and CFD trader. With the ability to trade on your mobile device, zero fees, and competitive spreads, it’s easy to see why MetaTrader 4 is the favorite MetaTrader 4 forex broker among forex traders across the world.
When it comes to trading forex and CFDs, the MetaTrader 4 platform is widely regarded as the most popular and most favored choice among traders and brokers alike. Many believe this to be the case for good reasons. This platform is user-friendly and conducive for currency trading. Auto trading, charting tools, Expert Advisors, and technical analysis all contribute to making MetaTrader 4 trading a pleasurable and potentially profitable experience. Whether you are trading currencies for the first time or a forex trader, switching to the MetaTrader 4 platform to trade fx will most definitely enhance your trading experience.