Is MT4 the best Trading Platform?
I have often been asked: “is MT4 the best trading platform for an individual investor to trade on?”
Sadly there is no definitive answer as it comes down to the individual traders preferences. That said, let’s take a deeper look into MT4.
Regarded as the most widely used trading platform for individual traders. The MT stands for Meta Trader which is owned by MetaQuotes Software Corp. MetaQuotes was founded in 2000 and its original product, FX Charts, soon developed a plethora of tools and functionality that evolved into what is now MT4 in 2005 (yes MT4 is over 10 years old!). The major breakthrough came when MetaQuotes developed MQL (MetaQuotes Language) which allowed traders the ability to create their own trading algos/robots. These have since been called EA’s (Expert Advisors).
The main detractor from EA’s has been the sheer number of EA’s available to “buy online”. The majority of sellers claiming to have created the best EA ever that will trade automatically for you and provide you with riches beyond belief. Yeah right!! Just take a step back… now take a deep breath and think about that last statement. If these EA’s were that good then why on earth would someone want to sell them to you! Common sense should prevail – we hope!!
So what’s so special about MT4? Well, aside from the ability to design and develop your own trading robots (EA’s), MT4 has pretty good charting that can be enhanced with the addition of indicators/tools etc. thanks to EA’s (both free and paid). Many traders like the ability to trade directly from a chart, something that MT4 was the first to allow, and now available on most platforms today. Truthfully MT4 has not really changed much in the past 10 years (even with the recently released MT5). The layout is standard and very static – many traders now prefer a trading platform they can truly customize and make it unique to their trading needs.
So how did MT4 become so entrenched? Pretty simple really. In the early days of margin FX trading there were very few choices out there. It was either MT4 or a proprietary platform developed by individual brokers – that invariably lacked the charting capabilities and MQL that MT4 offered. MT4 “won over” many brokers as it was relatively cheap to buy, deploy and support.
It should also be noted that in the early days of margin FX trading the majority of brokers ran a “Market Making” business. That is to say the broker would make the market in the various instruments (by way of a data feed from a Bank or ECN for example, often called liquidity) to “price” their clients. Any trades executed by a client would be “booked” with the broker i.e. they were not passed out to the market (the days before STP/ECN for individual traders). In this model when the trader loses the broker wins and vice versa. Sadly this led to many brokers “manipulating rates/fills/stops” as they were never “aligned” with their client’s interest. So why were the trades not passed to the “liquidity sources”? Pretty simple answer… MT4 did not have the functionality to pass executed trades out to the liquidity providers/sources!!
Yes, MT4 was (and still is) a “closed system”. An MT4 broker could only hedge its exposure by utilizing/accessing a separate trading platform to a Bank or Liquidity source. MT4 did not have the ability then, or now, to pass trades out to the market. However, nowadays that is not the case as many MT4 brokers utilize a “Bridge” to get trades from clients out to the market. Simply put an MT4 Bridge is a piece of software that “allows” MT4 trades to be passed directly out to the Liquidity sources.
We started with the question: “is MT4 the best trading platform for an individual investor?” What do you think? MT4 does tick many boxes but, as individual traders require more flexibility to customize their trading platforms, MT4 is definitely being left behind. There are some limitations (from a technical standpoint) that a 10 year old platform cannot compete against. Just look at some of the proprietary platforms that are being offered by many brokers. Many offer news feeds from prestigious data sources, inbuilt trading tools (no need for an EA here), sentiment indicators, enhanced charting indicators, bespoke alerts, portfolio creation, synthetics and a huge array of instruments to trade to name just a few! We have seen, and will continue to see, innovative trading platforms being developed that will leave MT4 in its dust. But for those traders starting out you can’t really beat the basic look and functionality that MT4 offers. For the more advanced trader MT4, sadly, will not “cut it for you”.
#tradesafely #fxzoo #doublehit