Lesson 41 – Metatrader 4 or 5. A Guide for Forex Traders
Metatrader 4 (MT4) and MetaTrader 5 (MT5) by far one of the most popular free trading softwares that you can use.
The platform allows you to open and close positions, observe instant price movements, open and customize charts and implement all the technical indicators we’ve mentioned in this course so far, and more.
Previously, it used to only be used for forex trading, but now has diversified to also being used for stock, CFD’s, futures and other financial products, all on the same platform.
This makes it an excellent candidate as an all-in-one platform that gives you access to all the products and tools you would need to trade.
We highly recommend you get it, as it’s extremely easy to use and gives you access to a huge amount of currency pairs. You shouldn’t ever have any issues finding a pair or tool that you would want on MT4.
How to get set up
To get yourself set up with Metatrader 4, here is what you need to do:
Download MetaTrader 4. You can download it directly from their website https://www.metatrader4.com/en or if you want the newer Metatrader 5 instead, you can also download it from the same website or https://www.metatrader5.com/en/ .
Next, you want to open an MT4 or MT5 account. At this point you have the option of either using a live account (with your own real money) or a demo account (using virtual money).
For first time traders who aren’t familiar with the mechanics, it’s often best to start with a demo account so you can test things out and familiarize yourself with the platform before you use your actual money.
If you create a live account, make sure you have the required identification documents.
Once it’s created, make sure to record the username and password somewhere safe, in case you forget.
Finally, you now need to connect your brokerage account to MT4/MT5. Usually, you just have to log into your brokerage account via the MetaTrader interface.
If you don’t have an account with a brokerage yet, check out our brokerage comparison page to see our personal favorite picks from the brokerages available online.
Opening a trade
Now you’re all logged in and ready, you need to know how to actually enter trade.
To do this, pick your desired currency pair that you want to start with by going to the top of the interface and selecting the ‘Window’ tab and then ‘New Window’. After which, all of the currency pairs will be displayed there.
Afterwards, you can select ‘New Order’ from the toolbar or just press F9 to create a new ‘Order’ window.
After you open the ‘Order’ window for your selected currency, you can now simply choose your lot size that you want your position to take, and then choose to either “Buy by Market” or “Sell by Market” to open your position.
This kind of order will automatically get filled based on the market price at that particular moment in time. This is okay to do, however, it’s better to choose your entry price carefully, informed by your technical analysis, by creating a “limit” trade instead.
In order to do this, click on the “type” drop-down list and select “pending order”. Now you can choose to buy or sell at specific price levels you’ve identified in the market.
Creating take-profit and stop-loss orders
During the process of creating your order, you will also have the option to choose price points for potential take-profit and stop-loss orders.
If you’ve been paying attention to the course so far, then you know this is a super important part of trading.
Each time you enter a position, be sure to place your optimal stop-loss and take-profit orders at the same time.
This will make sure you’re protected from any unexpected swings and also removes all emotional dilemma of deciding when to exit once the trade is actually active. This way, you can automatically ensure you’ve properly following your strict RRR and that your trade follows your exact pre-set design.
You can either type in the price point for profit-taking and stop-loss order manually into the box or you can use the arrows instead.
That’s it for this lesson. Next lesson we’ll go over the next step of finding the correct “Broker” for you. See you there!