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MetaTrader 4 (MT4) is a versatile electronic trading platform for online retail foreign exchange traders. It was developed by Russia based MetaQuotes Software and the first version was released in 2005. Since its inception, MetaTrader 4 has established itself to be the most feature-rich trading platform that contributed to its popularity among Forex traders.
The ease of use, ability to conduct complex technical analysis using built-in tools and reliability of the platform has made it a top choice for traders. On the other hand, the hosted solution that gives brokers full control over operating their business. The low maintenance nature of the software platform made it the number one choice for over 750+ brokers from around the world.
The MetaTrader 4 became so hugely popular among traders over the last decade that even after MetaQuotes Software released an improved MetaTrader 5 (MT5), Forex traders and brokers continued to use it instead of upgrading.
Recently, MetaQuotes Software stopped selling the license of MetaTrader 4 to new brokers. Hence, new brokers entering the industry need to buy the updated MetaTrader 5 software platforms. Nonetheless, a considerable number of traders continue to use the old MetaTrader 4 and MetaQuotes Software still provides updates for the MetaTrader 4 to fix security issues.
Although a dated trading platform, MT4 still dominates the retail Forex industry.
Key Features of MetaTrader 4 Platform That Made It Popular
Here are some of the most popular features of MetaTrader 4 that contributed to its success among retail Forex traders:
Full Suite of Technical Analysis Tools
Most retail traders utilize technical analysis to reach trading decisions and MetaTrader 4 revolutionized the way Forex traders conducted their analysis. The MT4 platform comes with a full suite of technical analysis tools, including trend lines, Fibonacci sequences, timeline, horizontal line, the ability to draw equidistant channels, and many more. On top of that, it made a wide range of technical indicators available as a built-in option.
Ability to Save Templates and Profiles
Another key aspect of MetaTrader 4 is the integration of templates and profiles. Traders can save their preferred technical analysis configuration with any number of indicators on the chart and apply the same template on different currency pairs. Not only that, the software has a built-in profile feature that allows traders to bundle a number of chart windows and save it in a profile that they can easily access later. The ability to save profiles makes it easy to scan charts of a single currency pair in different timeframes. Also, if you do not have more than one monitor, it makes it easy to scan dozens of currency pairs by switching to different profiles with keyboard shortcuts.
Versatile Order Management with Different Types of Orders
The MetaTrader 4 platform comes with three different order options. You can buy and sell currency pairs or other assets using the popular market order, where the broker tries to fill your order at market price. You can also place limit orders at a much lower price when buying and at a much higher price when selling. Retail traders who do not have much free time to be in front of the screen whole day benefits from setting limit orders tremendously.
Also, MT4 has the ability to set stop orders, which are useful for technical traders utilizing momentum in the market. If you want to buy above a resistance level, with MetaTrader 4, you can simply set a buy stop order few pips above the resistance. Similarly, setting a sell stop order below support level can help you enter the market at the right time, at the right price.
With the MetaTrader 4, you can also set a profit target and stop loss to predefine your reward to risk ratio for a particular trade.
Built-in Coding Language Allows Traders to Develop Custom Indicators and Trading Algorithms
Technical traders usually utilize various mathematical models to gauge the momentum and direction of currency pairs. The MetaTrader 4 comes with a built-in programming language called MQL4. With MQL4, Forex traders can develop their own technical indicators and not only that, but they can also develop automated trading algorithms and compile their trading robots.
MetaTrader 4 was the first software platform that offered easy to implement automated trading strategies without incurring any additional costs, which made it the default option for robotic trading. Till now, it is the most versatile trading platform for retail Forex traders who wants to buy and sell currencies automatically.
There are over hundreds of custom technical indicators available in the MT4 Market that traders can purchase. Or they can hire a coder from freelance platforms to develop any custom indicator or trading strategy.
Offline Data Storage and Data Analysis Using the Strategy Tester
The built-in strategy tester of MetaTrader 4 is one of the most popular backtesting methods used by retail traders to date to test the viability of their automated trading strategies. Traders can import tick data from third-party sources and test how their indicators and automated trading strategies perform on any given timeframe, over any given time period - from one-minute charts to weekly charts!
Continuous Security Update and Addition of Cutting-Edge Trading Tools
While a lot of competing platforms have tried to mimic the technical analysis capabilities of the MetaTrader 4, the intuitive implementation of user interface and ease of use, using customizable toolbars, kept the competitive advantage of MetaTrader 4. Also, MetaQuotes Software continued to add new cutting-edge features on a regular basis over the years that kept them ahead of the competition. As we mentioned, MetaQuotes Software does not sell new licenses for the MetaTrader 4, they have continued to provide security patches. The latest build number was 1220, which was released on September 15, 2019.
It may not sound like much, but before MetaTrader 4 was launched, getting a demo account to practice trading was not as simple as today. Most brokers required a cumbersome application process to open demo accounts and when they offered one, it came with severe restrictions and time limits.
With MetaTrader 4, Forex brokers could offer the same trading experience as their live accounts to potential clients. Also, MetaQuotes Software allowed brokers to offer unlimited validity of the demo accounts that enabled traders to treat their demo accounts seriously. Also, the proliferation of demo accounts enabled Forex strategy developers to test their automated strategies in real-time, which is better known as Forward Testing.
Multilingual Trading Interface
One of the key features of MetaTrader 4 that contributed to its popularity was the multilingual interface. As of December 2019, it supports 39 international languages. Having the ability to trade using a native language means that Forex traders make fewer errors that occur during trading because of lack of understanding of foreign terms and notions.
Low System Hardware Requirement
The MetaTrader 4 came to market in an era when Intel's Pentium processors were the most advanced computer processors in the market. Although its system requirements have gone up over the years, still today, you can easily run the software using a dated dual-core processor with only 1 GB of RAM.
The implications of such low system requirements are that you can run the MetaTrader 4 from low configuration Virtual Private Servers (VPS) and keep your automated trading robots online at a relatively low cost compared to competing software platforms.
Offering MetaTrader 4 is a Win-Win Situation for Most Forex Brokers
Forex brokers embraced the MetaTrader 4 platform from the get-go because it streamlined the process of running a brokerage business.
MetaTrader 4 is a hosted solution, which means brokers can control every aspect of the platform. The ability to implement third-party plugins made it even easier for Forex brokers to customize their services. With MetaTrader 4, brokers can easily implement liquidity Bridge solutions for liquidity aggregation. Manage risk the way they deemed fit and maintain order books any way they like.
In fact, this customization option of MetaTrader 4 made it difficult for MetaQuotes Software to market the upgraded MetaTrader 5 platform to brokers. Although the MetaTrader 5 was introduced in 2010, almost a decade later, still over 750 Forex brokers continue to prefer MT4.
While MetaTrader 4 is no longer being offered to new Forex brokerage firms, traders often find it difficult to switch to other platforms or even to MetaTrader 5. Retail Forex traders who have invested heavily in developing their custom technical indicators find it a burdensome to make their codes compatible with other platforms. Moreover, the low system requirement of MetaTrader 4 helps keep operating costs low when you have more than a handful of strategies running on different client terminals.
While newer trading software enters the market regularly, the decades of reliability of MetaTrader 4 still makes it one of the top choices.
Over the years, MetaQuotes Software has kept up with changing times and introduced Mobile apps for Android and IOS devices and developed a web interface for the desktop software, which has made it even more lucrative for traders to stick to the old, but certainly not out of date, platform.
If you are a beginner trader, you will find a wealth of free resources online about how to use the MetaTrader 4 to your advantage that newer platforms still lack. Hence, the learning curve to trade with MetaTrader 4 can be dealt with relatively easily. Also, there is no other trading platform that offers so many different free technical indicators and trading systems.
If you are in the market to find a new Forex broker that still offers the MetaTrader 4 platform, look no more. We have compiled a list of well regulated and reputed MT4 brokers, and we welcome you to read our detailed reviews.