FUNDAMENTALS OF TRADING ON META TRADER

4
A. To enter a buy trade on Meta Trader 4 (MT4), you can do the following:
1. Log in to your account and open the MT4 trading platform
2. Select the currency pair you want to trade
3. Click New Order to open the order window
4. Choose Buy in the Order Type dropdown list
5. Enter the size of the position you want to open in the Volume field
6. Fill in the stop loss and take profit fields
7. Click Buy to open your position
You can also right-click on an instrument from the Market list and select New Order. If the
instrument is already in the main platform window, you can click the F9 button.
You can also enable one-click trading to place a trade more quickly. To do this, you can:
1. Go to Tools then Options
2. Click Trade
3. Check One Click Trading
4. Open the trade panel by pressing Alt or T
5. Press Buy to enter a trade

MT4 Basics: How to Set Orders

Now that you’ve set up your MT4 account, it’s time to learn how to use it!

We know, we know. With so many tabs, windows, and buttons, the MT4 platform
can look a little bit intimidating if it’s your first time using it.

But don’t worry, it won’t bite! Besides, we’ll be holding your hand through the
entire process and go nice and slow.

We’ll start with the basics – setting orders.

By the time you’re done with this lesson, you’ll know how to:

1. Buy or sell via market execution

2. Buy or sell via pending order

3. Modify a trade after it has been entered

Are you ready? Great! Let’s begin!

Entering a Trade via Market Execution

Click the New Order button. You’ll find it in the standard toolbar.

 A dialogue box should appear. From the drop-down list, select the currency

pair you want to trade.

 Next, select Market Execution in the Order Type drop-down list.

 Enter the size of the position you want to open. Keep in mind that volume,

which indicates the size of your position, is expressed in terms of standard

lot sizes. Remember, one standard lot is worth 100,000 units. Hence, if you

wish to buy 5,000 units of a certain currency pair, you would enter “0.05” in

the volume field.

 If you have any remarks or notes you would like to include about your trade,

you can do so in the comment field. This is optional.

 Finally, determine whether to BUY or SELL the currency pair. A dialogue box

will appear to confirm that your trade has been executed.

You may have noticed that when you choose to buy or sell a pair at market,
the stop loss and take profit fields may be disabled. Don’t worry!

These options have only been disabled to help you get in on a trade as fast as
possible when price is already moving.

You can still specify your exit levels by modifying the trade AFTER it has been
entered. We’ll teach you all about editing existing orders later on.

Entering a Trade via Pending Order

1. Click the New Order button.

2. From the drop-down list, select the currency pair you want to trade.

3. Next, select Pending Order in the Order Type dropdown list.

4. Determine whether you want to BUY or SELL the pair in the Order Type
dropdown list.

You will be presented with 4 options:

Buy Limit – if you plan on going long at a level lower than market price

Sell Limit – if you plan on going short at a level higher than market price

Buy Stop – if you plan on going long at a level higher than market price
Sell Stop – if you plan on going short at a level lower than market price

5. After you have selected the type of order, punch in the price at which you wish
to enter the market.

6. Then, enter the size of the position you want to open in the volume field.

7. Fill in the stop loss and take profit fields.

8. You’ll notice that by using a Pending Order, you also have the option to set an
expiry date on your order.

9. Once you’ve filled everything out, click the Place button to enter your trade. A
dialogue box will appear to confirm that your trade has been executed.

Modifying Trades

Click on the Trade tab. There, you will find all of your trades, including their entry
prices, position sizes, stop losses, and profit targets. If you don’t see
the Trade tab, don’t worry, it’s there. It’s just hiding. Go up to the menu bar at the
top of the window and click on View | Terminal (or click CTRL + T on your
keyboard).
To add/modify stop loss or profit target:

 Right-click on the trade that you want to modify and select the “Modify or

Delete Order” option.

  Next, fill in the Stop Loss and Take Profit fields with your desired levels.

When you’re done, hit the Modify button.

 A dialogue box should appear to confirm that your trade adjustments have

been executed.

To close an open trade:

 Right-click the trade you wish to close and click the “Close Order” option.
 If you want to close your entire position, select the yellow button below the
Buy and Sell options. After hitting close, your profit balance should change
and reflect the profit or loss you made on your recently closed trade.t help
you? Please consider supporting Babypips.com. Your contribution will enable us to keep providing content —
for free — to you and others.

Next LessonMT4 Basics: How to Install an EA

What Is MetaTrader? Learn How to Use This Online Platform

in Trading

Author
Jana Kane
Published
09.07.2024
09Jul.2024 16:55
MetaTrader is a fully-featured trading platform used by tons of traders and brokers. Still,
there is quite a lot of uncertainty when it comes to how MetaTrader 4 and MetaTrader 5
work, especially for those just starting out. Before you put your money on the line, I
recommend taking the time to thoroughly understand the terminal.

This is exactly what this guide is aimed for – to teach you all the basics of this software
that you can carry into successful trading.

The article covers the following subjects:

 Major takeaways
 What is MetaTrader?
 MT4 vs. MT5
 MT4 Review
 MT5 Review
 How to Use MetaTrader 4
 How to Install MT4
 Chart Window Option in MetaTrader
 MetaTrader Pending Orders
 Trailing Stop in MetaTrader
 Indicators in MetaTrader
 MT4 Secret Features, Tricks & Tips
 How to Backtest on MT4
 How Does Auto-Trading Work on MT4
 Alternatives to MetaTrader
 Advantages & Limitations of MetaTrader
 MetaTrader FAQ

Major takeaways

MAIN THESIS INSIGHTS AND KEY POINTS

MetaTrader is a renowned trading platform by MetaQuotes Software Corporation, offering

What is access to derivatives, commodities, and stocks in major markets. MetaTrader is a tool of
MetaTrader? convenience for the financial service industry, providing advanced charting, market analysis
algorithms, and multiple indicator systems.

Platforms: Web, Desktop, Mobile (iOS, Android)

MT4 vs. MT5 MetaTrader 4 focuses on currencies, indices, and commodities, while MetaTrader 5 includes
stocks and metals. Both MT4 and MT5 offer four types of pending orders. However, MT5
includes two additional types: Buy Stop Limit and Sell Stop Limit. MT5 also supports more built-
 MAIN THESIS INSIGHTS AND KEY POINTS

in indicators and uses the .mq5 or .ex5 file format.

Alternatives to
Alternatives include Thinkorswim, LiteFinance, TradingView, E*Trade, and TT Futures.
MetaTrader

Advantages: Advantages of MetaTrader include customization opportunities and simplistic design.

Three areas where MetaTrader lacks: 1) Incompatibility between terminals. 2) Advanced tools
Limitations: can be intimidating for beginners. 3) MT4 has a limited number of instruments, indicators, and
timeframes, while MT5's major disadvantage is that hedging is disabled.

Keep reading to find out this and a lot more.

What is MetaTrader?

MetaTrader is a globally renowned trading platform developed by MetaQuotes Software

Corporation. It gives investors and retail traders access to derivatives, commodities and
stocks in major markets including Forex trading, Cryptocurrencies, and CFDs. Metatrader
provides a first-rate technological infrastructure for brokers and traders, who can leverage
its wide range of functions such as an advanced charting package, market analysis
algorithms, and multiple indicator systems. Thus, MetaTrader can be considered a tool of
convenience for the financial service industry as it equipped brokers with everything
needed to conduct operations efficiently across global markets.

MT4 vs. MT5

Five years after the roll-out of the MetaTrader 4 trading software in 2005, MetaQuotes
released MetaTrader 5. The main idea behind MT4 was to offer an all-in-one platform for
Forex trading. With the introduction of MT5, the functionality was extended to include
more instruments and several other additions.

What's the difference between MetaTrader 4 and MetaTrader 5? Let's figure out step by
step.

Trading assets
MT4 is suitable for FX traders of all skill levels, giving them access to many currency pairs
or Forex CFDs from the same platform. MT5 also caters to non-Forex traders, although
some limitations are still present. MT5 can connect to a huge range of markets (over 500)
covering a wider area than MT4.

Technical analysis
Both MT4 and MT5 are great for technical analysis. In MT5, however, the number of built-
in technical indicators has been increased from 30 to 38. The number of analytical objects
was increased as well – 44 compared to 31 in MT4. Another useful addition is the
economic calendar ingrained in MT5. This supplies traders with financial market news and
data releases from major countries.

Timeframes
MT4 has 9 timeframes (M1, M5, M15, M30, H1, H4, D1, W1, and MN). MT5 features 21 in
total – in addition to the ones presented in MT4, there are M2, M3, M4, M6, M10, M12,
M20, H2, H3, H6, H8, and H12.

Graphical objects
MT4 and MT5 feature vast suites of graphic objects – 31 and 44 items, respectively. The
extension was due to an increasing need for more tools to mark patterns, areas, and
levels on the chart.

Programming languages
MT4 uses MQL4 (MetaQuotes Language 4) and MT5 uses MQL5. This can be an issue for
traders trying to upgrade from MT4 to MT5, as MQL4 cannot run on MQL5. Many traders
believe that MQL4 is a simpler language. However, MQL5 is more efficient for creating and
changing the scripts and has superior backtesting capabilities. Learn more about MQL
languages here.
Read more about the differences between MetaTrader4 vs MetaTrader5 here.

MT4 Review

What is MT4? MetaTrader 4 is a platform developed by MetaQuotes Software and initially

released in 2005. It hasn’t stayed the same for all the years. The team behind it had
worked on growing it and introduced superb levels of customization and automation. For
many years, MT4 wasn’t just popular; it was the gold standard platform of the retail Forex
/ CFD trading industry with a long-standing trade history.

It covers traders of all experience levels. Newbies appreciate beginner-friendly elements,

such as a copy trading system and automated Expert Advisor apps, as well as the
constant support from the platform’s expert advisors. As for advanced trading, they can
take advantage of complex instruments for analytics and charting. Moreover, they can
design their own trading indicators using the proprietary MQL4 programming language.

Pros of MT4:

 Strategic focus on Forex trading.

 Easy to use and manage.
 Stable, reliable software.
 Unlimited leverage.
 No exchange commission is charged.

Cons of MT4:

 No comprehensive historical data for backtesting.

MT5 Review

What is MetaTrader 5? MetaQuotes incorporated MetaTrader 5 into the market in 2010.

The team kept most of the advantages of the previous trading platform but introduced
several improvements. MT5 accommodates advanced trading across a wider selection of
asset classes than its predecessor. The platform also features an integrated fundamental
calendar and exclusive indicators.

Comparing the two trading platforms, MT5 isn’t as widely used as MT4. One particular
reason is perhaps the different encoding that each platform has. Also, many traders
adhere to “less is more” and stick to the essentials of Forex trading, thus, choosing to
make their retail investor accounts on the more straightforward MT4 platform.

If you're thinking: "What software do stock traders use?" The answer might very well be
MT5.
Pros of MetaTrader 5:

 Ideal for multiple markets (stocks, Forex, futures, etc.).

 More indicators, graphical objects, and timeframes.
 Settings are more refined.
 Embedded MQL5.community chat.
 No exchange commission is charged.

Cons of MetaTrader 5:

 Disabled hedging.
 More prone to bugs than MT4.
How to Use MetaTrader 4

Now, let's look at the detailed description of each step for using MT4 for the first time.
Overall, it’s a straightforward process, but for clarity, I’ll also attach screenshots that you
can reference, for a better understanding of what the platform offers.

Step 1 — Open an Account Using the Client’s Profile

Visit your broker’s site and sign up for a new account.

Enter your country and e-mail/phone, and come up with a password.

You will be sent a code (e-mail or phone depending on what you provided), which you
should enter in the corresponding field.
Step 2 — Make a Deposit
Once you're registered and logged in, click the 'Finance' tab and choose your preferred
deposit method. The time when the funds are added to your accounts depends on the
payment processor.
Step 3 — Download and Set MetaTrader
Go to the 'MetaTrader' tab and click 'Download terminal'.
Step 4 — Login Into Account
When the download is complete, start the installation program and launch the terminal.
As soon as it opens, you should see a pop-up where you should enter the broker's server
and provide your login and password to enter your trading account.
You can change the default language to any other one depending on the particular
country you trade from, using the drop-down menu.
Step 5 — Choose the Asset and Open Its Chart
Select Market Watch from the 'View' menu and click the Market Watch icon from the
toolbar - or use a shortcut Ctrl+M.

You will see a list of symbols. To expand the list, right-click the window and select 'Show
all'. If you want to add a limited number of instruments to the Market Watch, do that
through the 'Symbols' drop-down menu.
To load a particular asset, such as a currency pair, onto a price chart, left-click on a pair.
Once it's highlighted, hold down your mouse button, drag it across, and let go.

Step 6 — Open a Trade

Click the 'New Order' menu command or press the corresponding icon in the standard
toolbar.
You will see the order window appear where you can manage trade positions.
Here's a quick video tutorial from our expert advisors on how to open an order in MT4:

Step 7 — Set Stop Loss and Take Profit

Open the context menu of the Trade window or double-click with the left mouse button on
this position for instant execution. Here, you can fill in the Stop Loss and Take Profit fields
with your desired levels.
Step 8 — Close a Trade
There are two options for closing a position: automatically or manually.

The trade I've opened earlier (on the screenshot) was automatically closed according to
the Take Profit level.

Alternatively, you can exit the trade by opening the context menu again or double-
clicking the position. Click 'Close', and you're done. Hopefully, it was a profitable one!
How to Install MT4

MetaTrader 4 is available in versions for all major operating systems: Windows, macOS,
Android, and iOS. The easiest way to find the link to download the installation file is
directly through your broker. Here is a link to get started with this efficient trading
platform.

How to Install MT4 for PС

1. Log in to your LiteFinance personal account, go to the 'MetaTrader' tab and click
'Download Terminal'.
2. After the pop-up window appears, click 'Run' to launch the download.

3. Launch the file and go through all the steps for installation as instructed.
4. Launch the terminal when the installation process is completed.

5. In the pop-up window, connect to the LiteFinance ECN trading server and then enter
your login credentials to gain access to the MetaTrader platform.
How to Install MT4 for Android
MT4 is a popular trading platform that can be downloaded easily by most brokers with the
following steps:

1. Launch the Google Play app, find the MetaTrader 4 app, and tap 'Install'.
2. Open the app.

3. Tap the bottom left icon and then 'Manage accounts'.

4. Assuming you already have a LiteFinance account, tap 'Login to existing account'.

5. Type in 'litefinance' to reveal the list of available servers.

6. Choose the server that you need (you can double-check on the broker's website), and
enter your login and password.
How to Install MT4 for iOS
1. Go to the Apple Store, search for MetaTrader 4, and tap the download button.
2. Open the app.

3. Go to Settings and tap 'New Account'.

4. Select 'Login to an existing account'.
5. Type in 'litefinance' to see which servers are available to you.
6. Tap on the needed server name and login into your account that you previously
created on the broker's website.

How to Install MT4 for MacBook?

Please note that if you downloaded the MetaTrader 4 installer from the LiteFinance
website, then you do not need to additionally install emulators to run the platform on
macOS, such as Wine or CrossOver.

Download the MetaTrader 4 for Mac installation file from the LiteFinance website and run
it.
Move the MetaTrader 4 icon to Applications and wait for the program to install on your
computer.
MetaTrader 4 is ready to work. Launch the trading terminal.
Chart Window Option in MetaTrader

What is the MetaTrader Chart Window? The major section of the terminal is comprised of
the Charts window that displays the current charts. Right-clicking a particular chart will
open a drop-down menu with a number of options:
  Trading allows you to place new orders and price alerts on a particular market.
 The Depth of Market tool lets you into Stop Loss and Take Profit levels attached to
all trades made through this window. You can also integrate it into the left side of
the window.
 The timeframe feature enables you to select the period you wish the chart to show.
 Selecting templates will bring up a selection of options for managing available
templates.
 Volumes adds a graphical representation of the market volume to your chart, in order to
have a more precise risk disclosure when you are trading CFDs, pairs, etc.

As for properties, the common tab has a number of popular options for customizing
charts.
Here as with other trading platforms, you can choose these parameters: bar, candlestick
chart, and line charts; place the chart in the foreground, shift it or enable/disable
autoscroll, and set the adjustment of the chart scale.

Lastly, you can customize the color of the chart in the color tab for a more detailed report.
MetaTrader Pending Orders

When trading the financial markets, there are essentially two ways that most brokers use
to open a trade: instant execution at the available price and pending orders that are
executed when a market reaches the level you chose and act as a price alert.

In addition, with other trading platforms, MT4 offers four types of pending orders:

 Buy Limit: allows traders to set a lower price than the asset is currently valued at.
This should be placed with the assumption that the price will fall to a certain level
and then increase. Suppose the asset price is $20 - you can set the order at $18.
The trade will open if the price reaches $18. Even if it continues to fall, the trade will
still be open.
 Buy Stop: the MetaTrader platform allows you to set a buy order above the current
market price. If you anticipate the current price level will continue to increase, the
order will be opened when the price reaches a higher pre-defined price.
 Sell Limit: let's say the price is $18, and you think it will rise to $20 and go down.
You can place your Stop Limit at $20, in order to avoid losing money rapidly.
 Sell Stop: due to live trading, if the asset has fallen and you expect it to keep falling, you
can place Sell Stop at a lower price. For example, set it at $18 if the current price is $20
and is about to fall to your specified level.

MT5 has the same four types of pending orders but also offers the following two to help
investors spot high-risk trades and don’t let their retail investor accounts lose money:
  Buy Stop Limit: this is a Stop order price alert for placing Buy Limit. While trading, a
Stop level is set higher than the market price in order to avoid a high risk of losing
money, while a Stop Limit price is set at a lower level.
 Sell Stop Limit: a stop order for placing Sell Limit. The Sell order, while trading, will be
placed if the asset’s price falls down to, or down through, the Stop price.

In both MT4 and MT5, you can place pending orders the same way as market orders. Here
are several ways to open the ‘New Order’ window:

Open the “New Order” window using any of the following methods:

 In the toolbar;
 In the context menu;
 In the Market Watch
 From the chart;
 By pressing F9.

Here is a little video you might want to watch to better understand how the metaquotes
software about pending orders in MT5 works:

Stop Loss and Take Profit

Stop Loss is a pending order that can be combined with other technical indicators, and act
as a price alert, in order to manage the high risk of losing money in these markets. When
opening a new position, the value you set for Stop Loss is the price at which the trade will
be automatically closed to avoid losing money rapidly. This would prevent a high risk in
volatile markets if your forecast turned out to be incorrect.

Take Profit is another type of pending order that works similarly when you have open
trades. You set the Take Profit value to close the trade automatically as soon as it reaches
the target profit amount. The goal here is to lock profits and prevent a high risk of losing a
vast majority of your investments.

S/L or T/P are open orders that can be set up or modified in the order window. The specific
values depend on your trading strategy and risk tolerance as well as the past
performance of your asset. But one thing to note is that you can’t set them too close to
the current price. In this case, you will see the message ‘Invalid S/L or T/P’.

Trailing Stop in MetaTrader

Trailing Stop is an efficient tool offered by metaquotes software and it is meant to adjust
the level of the Stop Loss along with price movement when trading using technical
indicators. Let’s say you have opened a Buy position, and the asset price goes up. Trailing
Stop act as a price alert and will increase the Stop Loss level accordingly to prevent losing
money rapidly. If you hold a sell trade and the asset price plummets, the level of the Stop
Order will go down as well.

Overall, as the name suggests, this feature makes Stop Loss trail the price level and offer
a trade report.

Setting a Trailing Stop feature using MetaTrader for your retail investor accounts requires
the following:

1. Open a position with a reasonable Stop Loss.

2. Go to the context menu command of the open position in the 'Terminal' window.

3. Choose between the available options (10 through 55 points) or set a custom one.

4. That’s it! If you want to disable the feature, go through the same steps but click ‘None’ on
the last tab.

A big difference between Stop Loss and Take Profit is that these orders are automated
trading systems managed by the server. This means that S/L and T/P will remain active
even if you close the terminal offering a detailed report of past performance. Trailing
Stop, on the other hand, is operated by the client's trading platform. This order will be
active only under the conditions that metaquotes software is open and connected to the
Internet.
Indicators in MetaTrader

Indicators derive metrics from any price activity and trade history. In general terms, they
help identify market trends and give evidence for price movement predictions helping
investors to avoid a high risk of losing money. Each MetaTrader indicator can be part in
different automated trading strategies having a specific purpose, and you can apply a
combination of them in your trading plan by simply selecting their custom functions.

Best MT4 Indicators

What is the best MT4 indicator? The MT4 trading platform offers a wealth of technical
analysis tools. I want to point out the following four specifically that can be applied in any
market execution:

 Moving Average calculates the mean average of the price to see the longer-term
tendency of the market using trade reports.
 Moving Average Convergence Divergence (MACD) shows momentum or trend
strength by measuring the relationship between two moving averages of the asset’s
price.
 Relative Strength Index (RSI) falls within the momentum oscillator family and
identifies overbought and oversold conditions in the market for a chosen date
range.
  Pivot Points determine significant support and resistance levels in the current or
upcoming session.
Let’s say you’ve settled on a certain indicator, such as pivot points, and want to apply it
to the chart. This will be a simple two-step process:

1. Go to the ‘Insert’ toolbar and navigate to ‘Indicators’.

2. Set the parameters (color, line style, and other settings) and click ‘OK’.
If you’re interested in using custom indicators, follow these steps to add them to the
terminal:

1. Download an MT4 indicator and locate the file (in the .ex4 and .mq4 formats or .rar where
you extract the files from).

2. Open the MT4 software.

3. Click ‘File’ on the top navigation menu and then ‘Open Data Folder’ in the drop-down menu.

4. After being redirected to Data Folder, go to ‘MQL4’ – ‘Indicators’.

5. Transfer the indicator file to this folder.

6. Close the terminal and restart it.

You can find new indicators for your toolbox by looking at broker websites, independent
developers, forums, or your fellow traders.

Watch this video to get a better grasp of indicators and how to use them in MT4:

Best MT5 Indicators

You might remember the question of "What program do people use for stock trends?" You
also might remember that it's MT5 since the previous version doesn't support it, so some
indicators will differ.

But on the whole, Metaquotes software corp offers a selection of indicators in MetaTrader
5 that overlaps with MT4, meaning, you can include the ones I mentioned earlier in this
terminal as well, without any extra financial services commission added. Some of the
other most used indicators are:

 Awesome Oscillator compares recent market movements to past market

movements. This helps determine whether the market is driven by bullish or
bearish forces i a chosen date range.
 Ichimoku Cloud displays support and resistance, momentum, and trend direction in
one view and it is used for stock trading, currencies,etc.
 Volumes supplies information that you can't discern from price alone. Specifically, it
points to the amount of a financial instrument that was traded over a specified date
range.

 Market Facilitation Index helps decide when a price trend is strong enough based on the
movements of the price of an asset, using previous trade reports.

The process of applying MT5 indicators on the chart or adding them to the terminal, using
their custom functions is practically the same. The only differences between those
automated trading systems are that MetaTrader 5 has more built-in indicators and uses
the .mq5 or .ex5 file format. So, just follow the instructions from the previous section in
order to give a boost on the numbers of your profit column.

MetaTrader Templates
Metaquotes software corp offers also a choice of templates. This is a set of parameters
that you can save and use them on any new chart without any extra financial services
commission added. You can build your own template with your unique settings and
quickly apply it the next time you need it.

This eliminates the need to set the indicators all over again when you open and start
trading another asset. Another benefit when you own custom templates is that you can
have more than one indicator at the ready. Since many trading strategies involve using a
combination of indicators, you’ll be saving time and effort, when you are trading CFDs,
pairs, etc.
In both MT4 and MT5, you can create your own template if you do this:

1. Open any chart that you like.

2. Apply the indicators you need to and set them up. You can make other additions
with more complex instruments to the chart as well.
3. Right-click on the chart and select ‘Template’ — ‘Save Template’. You can also click
the dedicated icon on the menu.
4. Name your template and click ‘Save’.

Now, the template is ready to be used as a price alert, for example, at the next time you
start the platform. Thus you can enter easily a market execution, start stock trading, or
even monitor how the CFDs work. To load it, you need to right-click on the chart, aim at
the Template field and click on the template you need.

It’s not only you who can take advantage of the template and boost the numbers on your
profit column. All template files can be accessed outside of the terminal and implemented
as automated trading strategies. In the menu bar, select ‘File’ — ‘Open Data Folder’ —
‘Template’. Here, you can locate the needed files with the .tpl extension and share them.

MT4 Secret Features, Tricks & Tips

What is a MetaTrader4 trick? Well, you've just learned the basic MT4 features, but there is
quite a lot that this program is capable of. Let me tell you about several hidden
capabilities that can make your life easier and more convenient as well as protect you
from volatile markets where you can lose money when trading.

Trick 1. Add indicators to Favorites via the context menu in the Navigator window
(CTRL+N). This way, all your mostly used indicators will be stored in one place.

Trick 2. Click the plus icon (on the screenshot) in the upper menu to find all available
indicators and quickly add them to the chart.
Trick 3. Access expert advisors and indicators on the MT4 marketplace. There’s no need
to look everywhere on the Internet - most of what you might need is already here.

Trick 4. Download the quote history for an instrument by going to 'Tools' — 'History
Center'. The quotes will be downloaded automatically.

Alternatively, you can increase the maximum number of bars in the chart settings. Go to
'Tools' in the upper toolbar — 'Options' — 'Charts', and enter 1,440.
Trick 5. To track the total exposure, profit-loss, and weighted average entry price for all
positions, you can use the iExposure indicator. Open the 'Navigator' window and go to
Custom indicators.

Drag iExposure to the chart, and you will see the following information — Symbol, Deals,
Buy lots, Buy Price, Sell Lots, Sell Price, Net Lots, and Profit.
Trick 6. The One Click Trading feature offers a quick 1-step process to execute trades.
This is

useful for those who value speed in their operations. Right-click on the trade to activate it.
Trick 7. You can open the 'Specification' tab to learn all you need about a particular
market. Right-click on the instrument symbol in the 'Market Watch' window to enable it.
For instance, 'Swap long' provides the swap rate charged for a Buy position, and 'Swap
short' — the swap rate charged for a Sell position. Let me add some clarification: swap is
a fee that is either charged or added to your account for holding a position overnight.

Trick 8. To find more accurate moments to enter the market, go to 'View' at the upper
toolbar — 'Data Window'. This will show the exact values of both the price and all
indicators installed on the chart.
Hidden functions of Metatrader
You can see that MetaTrader has a user-friendly interface, which is very encouraging
making you feel that you have been working with it for a long time. However, this
terminal has some hidden functions, which you cannot see at first sight but which can be
useful for a trader.

 Full market review

In order to have a complete list of trading instruments available for trading, find an icon
“Market Review” on your trading terminal and click the icon with the help of the right-
hand button of the mouse. Select "Show all symbols" function. Now, you see the list of all
trading instruments from which you can select those you are going to use for trading and
drag them in the area of the active instruments on your terminal.
Note also that a user can place instruments in the order convenient for him/her and
remove the instruments, which he/she is not going to use.

 Two or more indicators

You can use more than one technical indicator on the same price chart. In order to do
this, click the icon “View” and then “Navigator”. You will see the list of indicators and you
can drag the indicators, which you need for trading into your chart.

 Past transactions

You can easily add past transactions from a previous trade report to the chart. Just click
“View”, then "Terminal" and "Account History". You can drag past transactions into your
chart just the way you do with the technical indicators. If you hold the “Shift” key while
dragging a transaction, full trading history of the trading instrument will be displayed on
the chart.

 Quotes

In order to monitor changes to quotes, you shall press a button F10. You will see the icon
with all quotes. Choose the option “Always on top”.

 Price scale

A price scale is a very useful device for analyzing price charts, when trading CFDs for
example. In order to add it, just click the middle key of the mouse and Ctrl+F.

 Modification of the price chart

In order to change the layout of the chart, drag the price down with the help of the
double-headed arrow (from the right to the left). In order to go back to the previous
layout, just click a mouse twice on the price area.

 Password options

Metatrader trading platform allows you to use not only a trader password, (which is your
main password), you can also use an investor password. The first one enables you to
trade on the account, while the latter allows you to view the information.

 How to change a password?

In the menu tab “Service" choose “Settings”. Then in the tab "Server" click on the button
"Change".

 Trailing stop

It is a very useful function enabling to gain the highest profit on the transaction. The fact
is that stop-loss moves automatically along with the changes in price. When you use this
function, it is important to remember that your terminal should be always connected to
the server.

 Saving of the charts

If for any reason you need to save an image of the price chart it is possible on the
terminal. Click on the chart with the right-hand button of the mouse and choose "Save As”
in the pop-in list.

 Cancel

In order to disable command on your trading terminal, you can just click the buttons Ctrl
+ Z.

Start trading right now

TRADING ACCOUNT DEMO ACCOUNT
How to Backtest on MT4

Many investors choose to use MetaTrader 4 Strategy Tester with less complex
instruments in order to experiment safely with their retail investor accounts. There, you
can test out the effectiveness of your strategies based on historical data without the fear
to lose money when trading cfds,pairs, etc.. Let’s briefly go over the steps:

1. Go to the View sub-menu and select the Tester window.

2. Choose a specific EA/indicator to run the tests on (if they are installed).

3. Choose a trading symbol (depends on which ones you selected in Market Watch) and a time
period.

4. Select between the three modeling methods: Every tick (the most precise), Control points,
or Open prices only

5. Choose the spread (the current option / 2, 5, 10, 30, 50, or 100 pips).

6. Under the properties button, provide more specific details (initial deposit, currency, and
position type).

7. Click ‘Start’ and wait for the results.

In a few seconds or minutes (depending on the timeframe and the device’s computing
power), the terminal should be able to generate results. You can analyze the results in
three separate tabs:
  Results: It contains 10 tabs that show the time of the trade, price of the security, the
profit/loss, and other data.
 Graph: Here, the graphical view of the account balance and general account status are
drawn automatically.
 Report: These are summarized results with a substantial number of factors for further
analysis. In addition to trade results, you can draw a comparison between different experts.
Parameters include bars in test, ticks modeled, and modeling quality.

I recommend paying close attention to a few particular statistics: total net profit, profit
factor, absolute drawdown, profit trades, and modeling quality.

We have a comprehensive guide on MetaTrader 4 Strategy Tester. For more information,

check it out and learn all the ins and outs.

How Does Auto-Trading Work on MT4

If you can not understand how CFDs work for example, an expert advisor or a trading
robot can help you in a fast and easy way to enter a trade. This is a computer program
installed on MT4 that grants it permission to trade on your behalf. For some traders, this
may seem to hide a high risk and lose money when trading, since they don’t control their
retail investor accounts. It’s up to the trader to decide to which extent they want to use
the auto-trading feature. They can use it as an assistance tool for potential trading
opportunities or have the program fully take over for the time being.

Before you start using automated software, you should figure out a sound trading
strategy. Since you won’t be around when trading decisions are made, you need to be
sure that the strategy can sustain it without your direct intervention in order not to avoid
your retail investor accounts lose money when trading CFDs, currencies, or other assets.

Let me give you a quick rundown of what you should do to install and use Expert Advisor
in MT4 to establish any kind of retail investor accounts:
1. Develop or find a trading robot and have it saved on your computer.
2. Launch the terminal and click ‘File’ - ‘Open Data Folder’ - ‘MQL4’ - ‘Experts’.
3. Copy the robot file to the Experts folder.
4. Restart the terminal.
5. Find Expert Advisor under the ‘Navigator’ panel on the left side.
6. Click the plus sign and choose from available bots.
7. Drag and drop the EA on the needed chart.

Even after bot are in place, you can modify them as automated trading systems, since
sometimes it requires some adjustments. Click on the ‘Tools’ menu and select ‘Options’ to
display the settings.

I strongly recommend testing out the bot under simulated trading conditions to
understand how trading with pairs, cryptos or CFDs work and place the desired price alert
to start trading. This will show its potential profitability and pinpoint whether you need to
set it differently.

Alternatives to MetaTrader

We already featured several MetaTrader alternatives in our article. Still, let’s brush up on
this topic and see what other platforms can match up to this undeniable leader of online
trading software.

What software do day traders use for their retail investor accounts? What about other
types of trading? Let's find out.

 Thinkorswim suits the active trader demographic the most, like day traders. The
platform may appear complicated at first, but there is, in fact, extra educational
perks that come with it. Particularly, newbie traders will have a field day with all the
fundamental tools and videos.
 LiteFinance, in addition to being a regulated broker operating in compliance with
international and local law, features a web-based terminal. It provides a direct-to-
server connection to display live market charts across multiple trading assets and
several analysis tools. Before switching to desktop programs, it’s a great way to
start trading.
 TradingView is valuable as a screener platform and community-based capabilities. It
incorporates cloud-based charting tools for research and facilitates collaboration
with other active traders online.
 E*Trade is a terminal that appeals to beginner retail investors and traders. It
provides useful investment assistance through their financial consultants who can
assist with creating an investment plan, choosing investments, and managing
portfolio risk.
 TT Futures is a trading workstation with customizable solutions. It’s targeted at advanced
traders who want to design, test, and deploy custom algorithms and bespoke engineer
applications.

Advantages & Limitations of MetaTrader

Before we delve into the platform’s advantages and drawbacks, let’s compare it with
other popular trading terminals.

What is the best stock market trading software? Or what is the best trading software for
beginners? It's hard to tell, but I can try to simplify your decision with this table.

MetaTrader 4 MetaTrader 5 LiteFinance

Founded 2005 2010 2008

Markets Currencies Currencies Currencies
Equity Indices Stocks Stocks
Commodities Equity Indices Stock Indices
Cryptocurrencies Metals Commodities
Commodities Cryptocurrencies
Cryptocurrencies

Analysis Comprehensive Host of analytical Analytics feed

tools technical toolbox options Charting tools
Free Code Base Added indicators Free indicators
indicators and widgets and signals
Unlimited number Graphic objects Structured
of charts Financial news economic calendar
Analytical objects Economic calendar World market
(lines, channels, Forecasted values news blog
etc.) Depth of market Claws&Horns’
Autochartist Correlation Matrix expertise
Freelance service
for custom
indicators

Features Most ‘Mini Terminal’ Social trading

comprehensive Custom Affiliate program
broker support timeframes Trade history and
One Click Trading Multi-currency profitability chart
Multi-terminal strategy tester Customizable e-
Single threaded Partial order filling mail and SMS
backtesting Multi-lingual notifications
Fast and easy MQL Unicode Islamic account
code language Several auto-
Copy trading trading options
Virtual hosting Tables & charts
reports
Embedded
community chat
 Platform Web Web Web
choices Desktop Desktop Mobile (iOS,
Mobile (iOS, Mobile (iOS, Android)
Android) Android)

I want to focus on specific benefits that MT4 and MT5 can offer. Granted, it’s impossible to
name all of them here, especially since this guide was meant to highlight its capabilities.
Below are three main aspects that are responsible for making it such a prominent piece of
software:

Customization opportunities

Basically, you can customize everything in your terminal. The operation speed and
flexibility of MQL4 and MQL5 allow you to develop programs that are considered to be
very complex instruments. The programs can perform complex calculations and manage
Expert Advisor and indicator parameters.

Simplistic design

While the design may look somewhat outdated to some people, it’s an online trading
platform that is extremely easy to use. Being widely embraced by the trading community,
the software is familiar to many. But even for those who aren’t accustomed to it, the
controls are simple enough to master in a short time.

Amazing performance

The software uses very little resources from your computer. This means that the terminal
reacts and updates the data quickly in tougher conditions. Plus, the developers have had
15 years since the release of MT4 to fix all of the bugs and make the performance almost
flawless.

Three areas where MetaTrader lacks are:

The terminals are incompatible.

All EAs and custom indicators written with MQL4 for MT4 can’t be used for MT5. They
have to be coded again with MQL5 from scratch since it’s not based on MT4. So,
transitioning from one platform to another isn’t smooth.

Advanced tools may be intimidating.

Customization opportunities are particularly appealing to advanced traders. As a

beginner, you may not be able to enhance your trading strategy to a similar extent.

MT4 and MT5 have their own flaws.

MT4 users usually face the issue of a limited number of instruments, indicators, and
timeframes. While MT5 fixes these particular limitations, it’s not perfect either. The
biggest disadvantage of MT5 is that hedging is disabled.

Start trading right now

TRADING ACCOUNT DEMO ACCOUNT

MetaTrader FAQ
What Is MetaTrader 4?

What Is MT4 Minimum Deposit?

How Do I Add Money to MetaTrader 4?

How Do I Withdraw Money from MetaTrader 4?

How to Use MetaTrader 4

How Do I Use the MetaTrader 4 Demo?

How to Open a Live Account in MetaTrader 5

How to Add Indicators to MetaTrader 4

How to Add Indicators to MT5

How to Open a Trade in MetaTrader 4

How to Close Order in MetaTrader 4

How to Update MetaTrader 4

How to Download MT4 for Windows

How to Trade Indices on MT4

How to Trade Shares on MT4

How to Add Gold on MT4

How to Add Currency Pairs on MT4

How to Trade Forex Using MetaTrader 5

How to Save a Chart on MT4

How to Change Leverage on MT4

How to Add a Broker to MT4

Is MetaTrader Good?
P.S. Did you like my article? Share it in social networks: it will be the best "thank you" :)

Ask me questions and comment below. I'll be glad to answer your questions and give
necessary explanations.

Useful links:

 I recommend trying to trade with a reliable broker here. The system allows you to trade by
yourself or copy successful traders from all across the globe.
 Use my promo code BLOG for getting deposit bonus 50% on LiteFinance platform. Just enter
this code in the appropriate field while depositing your trading account.
 Telegram chat for traders: https://t.me/litefinancebrokerchat. We are sharing the signals and
trading experience.
 Telegram channel with high-quality analytics, Forex reviews, training articles, and other
useful things for traders https://t.me/litefinance
The content of this article reflects the author’s opinion and does not necessarily reflect
the official position of LiteFinance. The material published on this page is provided for
informational purposes only and should not be considered as the provision of investment
advice for the purposes of Directive 2004/39/EC.
Rate this article:

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By David Dombrowsky

Top 3 RSI Trading Strategies:

Step-by-Step Guide
Published on

December 28, 2022

Most brokers offer the RSI (Relative Strength Index) technical analysis indicator. It
stands out for its ability to signal whenever an underlying instrument is sold too much or
bought too much. Additionally, the technical indicator provides valuable insight into the
underlying trend while signaling potential areas of price reversal. Read on to learn more
about the top RSI trading strategies that can help you make better trading decisions.
Understanding the RSI
indicator
The RSI is a momentum indicator with readings between 0 and 100. Whenever the RSI
readings are above 70 indicate overbought conditions. What this means is that buyers
have bought the underlying asset too much. The likelihood of momentum shifting from
bullish to bearish under these conditions is usually high as few traders are willing to buy
at extreme highs.

When the RSI readings are above 70, savvy traders have been exiting the market by
taking profits. On the other hand, short sellers use the opportunity to open short
positions to take advantage of the extremely high prices.

On the other hand, whenever the RSI readings are below 30, they imply oversold market
conditions. What this means is that the underlying asset price has tumbled significantly.
While the price can continue dropping, a reversal often occurs as savvy traders who
were short exit by taking profits.

Likewise, buyers on the fence start looking for ideal levels to trigger buy positions to
take advantage of the extremely low prices. Therefore, whenever the RSI reading is
below 30, the prospect of price bouncing back is usually high as sellers exit and buyers
enter the market resulting in a momentum shift from bearish to bullish.
Source: Tradingview.com

Using the RSI Indicator for

Trend Confirmation
The middle line, usually at the 50-level, is also of interest when using the RSI indicator.
Whenever the RSI indicator moves from oversold conditions and rises above the 50-
level. It confirms a shift in momentum from bearish to bullish, signaling the market is
trending up. Consequently, technical analysts use the opportunity to eye long positions.

Similarly, whenever the RSI is reading tanks below 50 from the overbought levels, it
implies a shift in momentum from bullish to bearish. Consequently, technical analysts
use the opportunity to enter sell or short positions as the prospect of price plunging is
usually high, going by the buildup in selling pressure.

Therefore, the RSI indicator can signal an uptrend or downtrend in addition to

confirming the prevailing market condition, oversold or overbought.
RSI Trading – MACD
Combination
While RSI can be used to generate trading signals, it does not provide reliable trading
signals when used in isolation. However, combined with other indicators, it generates
some of the best trading signals.

Source: Tradingview.com

One of the biggest downsides of the RSI indicator is that the price can remain in an
oversold or overbought condition for quite some time. Therefore, one cannot enter a
short or long position just because the indicator indicates the asset is overbought or
oversold.

One must rely on another indicator to be sure when the price will likely reverse from an
uptrend in case of overbought conditions and start moving lower. Similarly, the
technical indicator must signal the appropriate time to enter a long position whenever
oversold conditions kick in.

The Moving Average Convergence and Divergence (MACD) is one of the best
momentum indicators to use with the RSI for the best outcomes. The MACD stands out
for its ability to signal whenever momentum shifts from bullish to bearish or vice versa.

The indicator comes with two moving averages, one fast-moving and another slow-
moving. Whenever the fast-moving MACD line crosses the Signal line and starts
moving up, it affirms the momentum shift from bearish to bullish. On the other hand,
whenever the MACD line crosses the Signal Line and moves lower, it signals a
momentum shift from bearish to bullish.

RSI Trading Strategy

Equipped with the RSI and the MACD indicator, it becomes pretty easy to identify the
ideal entry and exit levels as prices oscillate up and down on the chart.

Strategy 1: Going Short in Overbought Conditions

Whenever the RSI indicator suggests the underlying asset price has increased
significantly due to increased buying pressure leading to overbought conditions, it
would be wise to watch out for potential trend reversals.
Source: Tradingview.com

The chart above shows Gold price action. Between September 2019 and July 2020, it is
clear that gold prices were trending up with the RSI above the 50-line. In early July
2020, overbought conditions started ringing bells, with the RSI reading way above the
70-level. However, prices continued making higher highs going by the bullish green
candlesticks.

However, a closer look at the MACD indicator started caving in at the top of the chart
resulting in the MACD line (in blue) crossing the signal line (in orange) and starting to
move lower. The crossover affirms a shift in momentum from bullish to bearish, thus
affirming a trend reversal from uptrend to downtrend.

The formation of a large bearish engulfing candlestick at the top also confirms that bears
have overpowered buyers and are poised to push prices lower. Following the closure of
the bearish

engulfing candlestick with the RSI and the MACD indicators pointing lower. This
would be the ideal time to trigger a short or sell position with a stop loss a few pips
above the previous high.

Strategy 2: Going Long on Oversold Condition

When the RSI indicator readings are below 30, one should watch out for potential price
reversal from the downtrend to the uptrend. With oversold conditions in play short,
sellers tend to exit, presenting an opportunity for buyers on the fence to enter long
positions.

While the price can continue moving lower even with oversold conditions in play, the
MACD indicator can provide early signals of a change in momentum from bearish to
bullish.
Source: Tradingview.com

The gold chart above shows that the price was trending lower between July and
December 2016. As prices tumbled, oversold conditions started appearing in early
December, with the RSI dropping to the 30 level. Additionally, the histogram on the
MACD indicator was high, affirming the strong bearish momentum below the zero line.

However, the price struggled to drop below the $1136 level as sellers started locking
profits and buyers started opening buy positions. Afterward, the MACD line crossed the
Signal line and began moving up. The histogram above the zero line was also becoming
bigger, confirming a buildup in buying pressure.

The formation of three bullish candlesticks confirmed that gold had bottomed out and
was well poised to edge higher. Traders who used this opportunity to enter long
positions at extremely low positions ended up accruing significant pips and profits. A
stop-loss order was opened a few pips below the lowest level, which worked well as the
price never retreated from the emerging uptrend.
Another buy signal emerged in August as the RSI plunged below the 30-level, signaling
too much selling of gold. Afterward, the MACD line crossed the signal line and moved
up, affirming the momentum shift from bearish to bullish.
Strategy 3: RSI Divergence Strategy

In most cases, the RSI indicator moves in the same direction as the price. If the price
increases, the RSI will also trend up; if the RSI points lower, the price must also drop.
However, that is not always the case. At times the RSI diverges from the price and
moves in the opposite direction.

The RSI and price moving in the opposite direction is usually a sign of weakness in the
underlying trend. Conversely, if the price continues to rise even as the RSI moves low,
the upward momentum is waning, and that price is likely to correct and move lower
afterward.

Similarly, if the RSI is moving up, but the price continues moving lower, making lower
lows, it signifies waning selling pressure. It means that after some time the price will
correct and start moving up in the direction of the RSI.
Source: Tradingview.com

In the gold price action chart above, gold was trending up, making higher highs between
August 2019 and February 2020. However, instead of the RSI indicator moving in
tandem and making higher highs, it moved lower.
The divergence between the price and the RSI confirmed weakness in the underlying
uptrend. Gold plunged from highs of $1696 at the end of February to lows of $1448.
The divergence provided an early signal for technical analysts to position potential
selling opportunities.
Bottom Line

The Relative Strength Index is a vital technical analysis indicator for determining
prevailing market conditions. With readings above 70, it implies overbought conditions,
an early warning sign of potential price reversal from uptrend to downtrend. Similarly,
readings below 30 suggest oversold conditions signaling the likelihood of price bounce
back after some time.

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