The foreign exchange (Forex) market recorded a daily turnover of $6.6 trillion in January 2020, with a 40% growth over the last ten years. ResearchAndMarkets.com anticipates the value of global forex to expand at 6% CAGR between 2020 and 2025.
The FX market has enormous potential to continue generating wealth for investors years into the future, and much of this potential can be attributed to the rise of electronic platforms giving retail traders access to the huge market. Metatrader 4 (MT4) is one such platform that enables retail traders to trade Forex with a few clicks.
This article is a step-to-step MT4 guide for absolute beginners. You will learn basic operations on MT4, such as account opening, reading charts, applying indicators, and open/close orders.
What is MetaTrader 4?
MetaTrader 4 (MT4) is an industry-defining electronic trading platform developed and released in 2005 by MetaQuotes Software. The platform links retail traders with online brokers. Thousands of brokers connect millions of traders to the massive forex market with just an account.
MT4 is an invaluable companion to traders of all calibers. An easy to follow user interface is not MT4’s only advantage. Other than forex, MT4 provides access to other markets such as equities, cryptocurrency, commodities, and indices, all through CFDs. Besides, MT4 is accessible across PC, Macbook, tablets, and mobiles, hence offering the kind of flexibility that every trader needs.
Moreover, users can easily customize MT4 to suit their preferred trading style and preferences. The software is also capable of automating trading activities, and anyone can learn this function. Automation of trading activity enables noobs and experts alike to increase their income potential.
How to Get the MT4 Trading Platform and Trading Account?
As earlier noted, MetaQuotes Software licenses MT4 to brokers who then provide it to their clients. It is available free of charge.
To start using the MT4 platform, the first step is to register an account with a broker such as ZFX. You can either choose to open a live trading account or a demo account. Then you will be asked to download MT4 (if you do not have it already) for your particular device.
Once MT4 is downloaded on your device, go ahead and run the executable file for installation. After installed, open the software, and you will be asked to fill in the account information. Select “Existing trade account” if you already have an active demo account. If not, select the “New Demo account,” then click “Finish.”
When you successfully logged in, you will be presented with a friendly UI.
On the left panel, you can see your account.
How to Read and Edit Charts on MT4?
The charts on MT4 are easily movable, and you can declutter as you please. As you can see in the figure above, there are four charts lain side-by-side, but you can reduce them to just one if you have no business with the other three.
There are 3 chart types available on MT4: bar chart, line chart, and candlestick chart. Candlestick chart is more popular because it presents price action in great detail. It shows the high and low prices of each session as well as the open and the close prices. The rich information it provides is what you need for profitable trading.
To select the candlestick chart, access the toolbar above the chart area and click on the candle with two axes:
Usually, green candles show bullish price action, and red candles show bearish price action. To make sure your charts appear this way, open a new chart and right-click inside the chart, and then click “Properties”, and modify the chart as desired.
Then a modified chart will appear as shown below. It makes reading the chart easier, and even the added indicators can be seen more clearly.
One candle represents a single trading session. You can select the preferred session in the toolbar above the chart area.
You can select one minute (M1), one hour (H1), one day (D1), one week (W1), or one month (MN).
How to Trade on MT4? / How to Open and Close Orders?
Trading on MT4 is easy. To open an order, you need to click “New Order” at the top (middle toolbar). Alternatively, you can press F9, which is a handy keyboard shortcut. Remember, the new order that opens corresponds to the chart you are focusing on. If the chart is for the EURUSD pair, then the order that opens will be for that currency pair. This window will open:
To open the order, you need to specify its volume. Once the volume is selected, you can go ahead and sell by the market or buy by market. On the same window, you can specify when to take profits and when to stop losses.
Learn more about stop-loss strategies: How to Set a Stop-Loss in Forex Trading?
Closing the order is even more comfortable. Right-click on orders inside the chart and click “Close.”
How to Use Indicators on MT4
Indicators are critical in forex trading, especially when conducting technical analysis. Indicators will help you identify trends, the momentum of the trend, and the strength of price action, among many other things. But how do you use indicators in MT4?
Once your chart is open, using indicators is a matter of dragging and dropping.
First, go to the navigator bar on the left of your screen. Here, expand the “Indicators” tab and select your preferred item.
If you want a Trend indicator, then expand the “Trend” tab and select the indicator.
Say you want to use the Moving Average (MA) indicator. When you drop it on the chart, a window will pop up, from when you can manage the indicator’s behavior. You can also customize the color of the indicator.
After you have done your customizations, click “OK,” The indicator will superimpose itself on the chart as shown below.
You can also edit the indicator from within the chart itself by right-clicking on the indicator. Here, you can also delete the indicator if you feel it is no longer of use.
For more useful indicators for forex trading, please refer to: Four Basic Technical Indicators for Forex Beginners
- The Best Trading Platform Award 2019 from Financial Weekly, Regulated by FSA.
- 100+ trading assets, including Forex, Stocks, Indices, Gold, Crude Oil, etc.
- 3 types of trading accounts to meet the needs of every customer
- 0 commission, low spread, leverage ratio up to 1:2000
- Powerful trading platform that executes 50,000 orders/s
- Open an account with a minimum deposit of $50
- 24-hour Customer Service
Risk Warning: The above content is for reference only and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations conducted in accordance with this article. Please be firm in your thinking and do the corresponding risk control.