Reasons Why Traders Use MetaTrader
As explained in the previous article here on the Trading Academy, the MetaTrader is the trading platform most of the traders are choosing. Its beauty comes from the fact that it is easy to use and understand, while its performance is still unmatched. That is, among retail Forex traders that trade a normal account. Large institutional investors, money managers, treasury departments in commercial banks, etc., have access to different trading platforms, but this is a totally different league when it comes to trading. Normal retail traders, like any regular Joe, will find out that MetaTrader is the platform offered by most Forex brokers. No matter the trading experience, there is virtually no trader in the world that didn’t know how to trade with the platform or didn’t hear about it.
Why Traders Choose MetaTrader?
The MetaTrader platform comes in two versions: four and five. Out of the two, the most used one is the MetaTrader 4 as it is allowing hedging in the same trading account. The MetaTrader 5 platform is mostly popular among U.S. traders as brokers in that part of the world are forced to obey tougher regulation from the S.E.C. (Security and Exchange Commission). Why is this trading platform the choice of so many traders? The following are some reasons for why traders favor the MetaTrader.
Easy to Use
Installing the trading platform and trading with it is extremely easy and straightforward. The broker is offering the access information (trading account login information, like account number and password) and the link for downloading it. The previous article showed how to log into the trading account, and by the time this is done, a whole new world of opportunities opens. The MetaTrader allows you to chart any currency pair, to export your charts, images, and much more.
Charting Made Easy
One of the biggest advantages the MetaTrader is the charting possibilities it offers. Other trading platforms have a problem with charting, especially if one is using the Elliott Waves trading theory. Under the Elliott theory, the market is moving in waves of different degrees. These waves must be labeled with either numbers or letters, depending on their nature (impulsive or corrective). However, placing those numbers and letters on any given chart is not that easy. The idea is to place them on a chart and the analysis to stay there, not to disappear in time. For that, the MetaTrader offers the Draw Text tool, as it can be seen in the image below. This is the right tool to use for labeling a chart and not the Draw Text Label. The reason for this comes from the fact that when using the Draw Text Label if you switch to a different time frame, the letters and numbers are not staying in the same place. Hence, your Elliott Wave analysis is useless, is it disappears in time. The MetaTrader saves your work automatically when the trading platform is being closed, without asking you. Therefore, by the time the platform is opened again, the work can continue from the same point.
Work Can Be Exported
Perhaps the biggest quality of MetaTrader is the fact that one can take its work and export it when switching brokers. Forex brokers are offering the MetaTrader as the favorite trading platform and switching brokers have never been easier. One can simply go on the MetaTrader platform, click the File tab then the “Open Data Folder” tab. A pop-up window opens and the Profile folder can be copied and saved anywhere on the PC. This Profile folder contains all the work and information in the trading account. If the trader is switching brokers, the content of this folder can be imported to the new MetaTrader account provided by the new broker.
One of the great features in the MetaTrader platform is the MetaEditor. This one is offered for free and it allows traders to code their own trading strategy or indicator. For that, programming knowledge must be in place, but if there is none, that can be outsourced. The MetaEditor allows building a new indicator or an expert advisor (a robot that will buy or sell a specific currency pair based on technical inputs).
This is a tool that helps to verify if a specific trading strategy is working. For example, let’s assume one is having a trading strategy that works well in the currency trading environment. The next step to be done is to automate the strategy, and the MetaEditor allows for a robot to be built. However, after this is done, we know the strategy works now, but how about the past? Was it profitable in the past too? Or the current period is just a random period and on the long run, the results are negative? For that, the history back-tester tool is used. Traders can select the period to be tested, the currency pair and the time frame, and then a report is being created. That report shows the total number of trades taken in that period, their outcome, overall profitability, winning and losing trades, etc., basically all the information needed. All the inputs here are important as not all currency pairs are moving the same, as well as not all timeframes, show the same outcome.
Custom Indicators Can be Imported
Not only custom indicators can be imported, but also expert advisors. This makes it extremely important as it doesn’t limit you to create them only with your MetaTrader. Anyone can create a custom indicator or a trading robot, send it to you, and it can be imported in the trading platform. Historical data can be imported as well. Just chose any currency pair and go on the monthly chart. For example, if you chose the GBPUSD pair and go on the monthly chart, you’ll find out that the broker is offering data only since 1990’s. What does it mean, that the GBP and USD did not exist before 1990’s? Of course not, only that the data is not available. However, the MetaTrader allows you to import your own data, in specific file format, and by the time you do that, the charts are updated automatically. Historical data is crucial for any analysis, especially when back-testing different trading strategies. The reasons listed in this articles are only a few, designed to show you why MetaTrader is so popular. There is virtually no limitation to technical analysis when using this trading platform, and the fact that it is so widespread comes in handy when having an issue with it. Simply Google the issue and you’ll find out the solution in a blink of an eye. This is exactly because many traders are using this trading platform.
Recommended Further Readings
- Trend Indicators
– Explaining what trading indicators are, where to find them, and their benefits when trading Forex market based on technical analysis.
– Discussing what oscillators are, what are the differences between an oscillator and a trend indicator, and what are the most representative indicators that fit into this category.
- Central Banks
– What is the role of a central bank in Forex trading, why the market is moving aggressively when monetary policy is set and what information to look for when the central bank is deciding over its policy.
- Technical Analysis – Support and Resistance Areas
– Defining what support and resistance areas are, how to find them using technical analysis and why traders are looking to buy into support and sell into resistance.
- Forex Trading Sessions and Their Importance
– Explaining the differences between the three Forex trading sessions, what are their importance, ranking, etc.
- Forex Brokers Types – ECN or STP?
– What is ECN, STP, how d- brokers deal with client’s orders, advantages, and disadvantages of the tw- types.
Other Educational Materials
- “Technical analysis of FOREX by RSI Indicator.” YAZDI, S. H. M., LASHKARY, Z. H., & ISMAIL, I. B.
- “Technical analysis of Forex by Parabolic SAR Indicator.” YAZDI, SEYED HADI MIR, and ZIBA HABIBI LASHKARI.