Once upon a time, the only people who could buy, sell, or exchange currency were those employed by major financial institutions, brokerages, or trading houses. Now, the situation is completely different. Anyone disposing of a little bit of money and patience can trade in the foreign exchange market and make serious money. Forex trading has improved significantly over the past years and it is all due to the technology that has been introduced to the industry. The FX market is open 24 hours a day on weekdays.
Undoubtedly, the most impressive aspect of trading currencies is the ability to trade online using advanced platforms such as MetaTrader 5. A good trading platform ensures the necessary financial instruments and opens up the way to various financial markets, so traders can put their savings into productive use. Let us talk about MetaTrader 5 for a little bit. Seasoned traders, as well as beginners, use this multi-functional trading platform to buy online retail foreign exchange. Many say that it is the best application for trading currencies, stocks, and futures. Is that so? Well, we are about to see.
Very short introduction to MetaTrader 5
MetaTrader 5, commonly referred to as MT5, is a type of software that connects the user to various trading platforms and makes it possible for them to buy, sell, or exchange currency through a computer or smartphone. As a rule, the software is licensed to brokers, which in turn provides the software to their clients. Many of the low spread brokers in the market today offer this new version, alongside the older version, MetaTrader 4. The server is managed by the broker and the software is made available to traders who are able to view live Forex rates and prices. They can immediately identify changes with regard to market assets.
Is there any difference between MetaTrader 4 and MetaTrader 5?
That is a very good question. Both Forex trading platforms feature expert advisors, advanced technical analysis tools, and, last but not least, fast execution speeds. It is tempting to think that there is one and the same. After all, we are talking about a new version of an older version. Indeed, but there are some differences you need to become aware of.
MetaTrader 4 was created for trading contracts for difference. The software is very friendly to work with, which means that traders are empowered to take the volatile market by storm. They can carry out transactions and carefully evaluate the technical elements of the market. MetaTrader 5, on the other hand, is designed for multi-asset trading, so users can trade everything from commodities to cryptocurrencies. From an analytical standpoint, MetaTrader 5 wins because it offers Fibonacci studies and Elliot wave drawing tools. It brings forward the latest financial news, which comes in handy when you are trading in several markets.
MetaTrader 5 is completely redesigned platform that allows hedging, features an economic calendar that notifies the user of the latest news and data releases, introduces commerce integration, and enables the user to enter two buy, sell, or exchange orders at the same time. Day traders enjoy complete freedom in the sense that they can stay active by trading on their smartphones or tablets. They do not have to sit in front of the computer all day long.
How to day trade using MetaTrader 5
An ever-increasing number of people turn to the foreign exchange market for higher returns and profits. If you have arrived at the conclusion that you want to trade Forex for a living, register with a broker that offers a low-spread account, and learn how to use the MetaTrader 5 software. The broker is the one responsible for showing you how things work. In other words, they should ensure support regardless of what trading platform you choose to use. Before you reach out to your broker, you might want to take some steps towards self-learning.
To place your first order, you have to:
- Pick your financial instrument
- Select “New Order”
- Figure out what type of order you want to place (market order, pending order, etc.)
- Click “Sell” or “Buy”
Attention needs to be paid to the fact that the trading software has certain system requirements. If you wish to download the platform onto your personal computer, make sure you have Windows XP, 7, 8, or 10 installed. MetaTrader 5 runs smoothly on 32-bit and 64-bit processors. Basic information is required to check your identity, trading goals, and the level of risk you are willing to tolerate.
After your account has been verified and you have transferred the necessary funds, you can start exchanging currency. The features and trading resources MetaTrader 5 is equipped with are meant to simplify your journey to success. So, get to know each and every feature, as well as their applicability, to make sure that you are taking full advantage of the Forex trading platform. The biggest mistake that you can make is to ignore the profile function. Do not go back and forth between timeframes. Have different profiles for different markets.
MetaTrader 5 clearly shows you the amount that you are likely to win or lose by placing a trade. Assess your risk before taking action. As a currency trader, this is the only way to prevent losses that take place as the result of exchange rate fluctuations. The electronic trading platform allows you to set stop-loss orders, which makes all the difference when it comes down to the trading performance. The wider the adverse price movement is, the more careful you need to be.
Finally, yet importantly, use price alerts. You do not want to miss out on profitable trades, do you? Creating alerts is not complicated at all. Right-click on the price level you are interested in and select Alert. Notifications are ideal for technical traders who are waiting for the moment that the right price level is reached. MetaTrader 5 has other neat features, but it is up to you to discover them.