Foreign exchange (forex) is hands-down the biggest market in the world, with a worldwide value of more than USD$ 2.4 quadrillion. The effects of foreign exchange trades are felt everywhere in the world—from the price of fish and chips at your favourite shop to the price of coconuts in Indonesia.
Consequently, forex trading is immensely popular. And with the rise of the Internet’s popularity, forex trading also became accessible. Trading is no longer limited to banks, hedge funds, and other large institutions.
An estimated 9.6 million people worldwide engage in online forex trading. One of the main reasons for this is the convenience brought on by online trading platforms. Online or electronic trading platforms made forex trading more straightforward than before the Internet.
One particular trading platform, however, has been lording it over the other platforms since its release: the MetaTrader 4 (MT4).
An overview of the Metatrader forex platform
The MetaTrader 4 software trading platform was released in 2005 when the MetaQuotes Software Corporation issued the fourth iteration of its online trading platform. Upon its release, MT4 was an instant hit among brokers. Today, the platform is licensed to transact with forex brokers who, in turn, provide the platform to their clients.
The MT4 platform has both a server and client component; the server part is handled by the forex broker, while clients use the software’s client side to place orders, monitor charts and prices, and manage other activities in their accounts. MT4 connects various trading platforms, making trade possible via computers or mobile devices.
MetaQuotes Software released MetaTrader 5 in 2010, an upgraded version meant to replace the previous version eventually. However, instead of being a replacement for MT4, most forex brokers used MT5 as support for MT4. As far as the majority of brokers are concerned, MT4 is still the gold standard for online trading platforms.
So how did MetaTrader 4 manage to do this?
Reasons why MT4 is the leading Forex platform
Due to its popularity, most brokers today offer MT4 or MT5 to their clients. Below are several reasons why:
Familiarity
MetaTrader was among the first online trading platforms. Being among the first gave the software an advantage, as clients didn’t have other viable choices. By the time other online platforms came around, traders and brokers had become familiar with the product. There may be other options now, but most forex traders have already got used to the tried and tested MT4.
Moreover, any beginner is free to use the software’s demo. You can open a demonstration account if you want to try out MT4. This account enables you to do a “test drive” for free with no deposit. Using the MetaTrader 4 or 5, you just need to provide your email and other personal information to a forex broker.
Once you have your demo account, you can use demo money to play. You can familiarise yourself with how the platform works without risking your capital.
Useful features
MT4 immediately became popular among brokers after its release in 2005 because of its numerous useful features. Some of these features are now considered market standard, but back then, these features were unique and extremely useful. The features made market analysis and trading straightforward. Some of the main features are the following:
- Automated trading
- Navigator window
- Indicators window
- Market watch window
- Multiple charts setup
More features have been added since the software was first released. Some of these added features are one-click trading, a signals section, a news section, and new trading tools.
Moreover, there are thousands of indicators you can use on the platform. Around 80 of these are free and pre-installed. If you want customised indicators, you can hire developers to create one or write one yourself if you’re a coder. Among other things, MetaTrader is also customisable.
Intuitive user interface
The ease of navigating MT4’s interface made it popular among traders. Instead of dealing with a complicated interface, their focus is on spotting market opportunities and making profitable deals.
MT4’s intuitive user interface is noticeable upon logging in. After the platform launches, the trader is faced with the software’s default view, which consists of these three modules:
- Market Watch: Market Watch is found in the top left section. This module contains the list of trading instruments or the various types of assets that you can use to trade on the platform. You can also choose which instrument to use. This section also allows you to customise which market to watch besides forex. You can monitor real-time price changes in different markets, like commodities and indices.
- Chart window: The chart window is on the top right. It shows you the price movements of a trading instrument over a time period you’ve specified, i.e., whether weekly, daily or hourly. Charts provide critical data for traders, which is used for analysis. The data is also used to work with indicators and the platform’s “Expert Advisor.”
Expert Advisor refers to the installed analytical program in MT4 that you can use to customise your trading strategy.
- Terminal: The terminal is the module on the bottom. Here, you can organise and monitor your cash operations, trading account history, margin, trading activities, and overall equity. You can also edit your positions through the Terminal module, such as adding Take Profit levels or Stop Losses.
Provides convenience to traders
Another feature of the MetaTrader platform that contributed to its popularity is convenience. There are several aspects of the platform that manifest this; some of which are discussed below:
- Minimal resources: The platform isn’t a resource hog. It runs on minimal resources, even on a low-bandwidth connection. You don’t need a powerful computer or a high bandwidth connection to run the program.
- Security: MT4 is protected by a robust security solution. The security has been upgraded and protected against DoS (Denial of Service) attacks. Data transmission is encrypted using a 129-bit key. The platform itself supports RSA (Rivest-Shamir-Adleman) digital signature, and the traders’ IP addresses are hidden by default. These security features mean you can access your account from different devices with a high degree of security.
- Server stability: The MT4 server has been upgraded and refined since its release in 2005. As a result, it has become more advanced and more stable than others of its kind. Today’s version of MetaTrader can support tens of thousands of trades at the same time with nary a bother.
- Communication: Another convenient feature is the mailbox section in the client terminal. Through the mailbox, brokers can communicate with their clients in real time, which is a huge convenience.
Free to traders
MT4 was first offered to traders for free. And it will always be free for any trader’s use. This fact alone made it preferable to other platforms that charge fees. And along with its eminently usable and intuitive features enumerated above, MT4 will always be the leading forex platform.
Summary
Foreign exchange is among the world’s most popular and influential markets, with millions of traders using the platform. Despite the increase in competition, MT4 remained the leading forex platform. Some of the reasons for this are its useful features, intuitive user interface, convenience, and the fact that it’s also free to traders.
