Broker to Trading

MetaTrader 5 (MT5) is an online trading platform which is the successor platform to MetaTrader 4 (MT4). MT5 continues the core functionality of MT4, which is to allow the trader to trade markets using both discretionary and automated trading, and adds a number of enhancements. There are more order types, graphical objects, technical indicators, and time frames built into the platform.

While both MT4 and MT5 offer a basic capacity, a feature of both platforms is that they allow the trader to add on extra features. Each platform lets the trader use, modify, and build technical indicators. Both platforms let the trader both use and build online trading robots. These computer programs are called Expert Advisors (EAs) on both platforms. EAs will execute trades automatically in the trader's account, in accordance with their programmed instructions or algorithms. A difference between MT4 and MT5 is that EAs are built in the MQL4 language on MT4 and the MQL5 language on MT5.

There are a number of possible reasons why a trader may wish to use an EA. EAs will not tire and can have a potential advantage of speed and accuracy over the human trader (barring equipment or connection issues). Typically, EAs execute on an indicator trading signal, so in effect, they automate the way a trader may already trade. However, the human trader can always exercise discretion when managing a trade, while the EAs will continue executing the trades until told to stop. Thus, it is possible that the program may incur drawdown into the trader's account, sometimes rapidly, where a human trader might decide to exit a trade or manage it differently.

On MT4 and MT5 it is possible to backtest an EA. However, because an EA worked successfully on past market data, it does not mean it will work when applied in real time. Thus, EAs can be seen as a tool that needs to be applied with care and judgement, like all trading strategies.

One way to get to grips with MT5 and its features and then to practice trading is to open a demo account, which lets the trader trade without risking real money. The brokers in the comparison table all offer MT5 demo trading, as well as live accounts (for which the minimum deposit is given).

When using a demo account to practice trading, it may be helpful to test out a strategy in different market conditions. If the strategy is based on liquidity events, such as market open and close, then it can be illuminating to try it on multiple occasions. This can gauge the extent to which there is a regularity in these market events and what the nature of that regularity might be. For example, a strategy based on market close may be essentially one based on the effect of changes in liquidity. Which is to say that a market close may generate patterns. But as always, these patterns, while they may be regular, may not be predictable. Even when the time is tied down, this does not mean that the market is simplified. However, it can provide a basis for signs of potential patterns.

This approach to trading can make a demo account useful, as it provides a rationale for demo trading, not as a substitute for real trading, but as a way of understanding the market in question. Given that MT5 is essentially an advanced platform for Forex trading, using it as a demo account can, in fact, make fuller use of its capabilities. Since MT5 supports other markets, this platform may potentially help provide a different perspective on these markets.