What is MT4? Complete Guide to MetaTrader 4 Trading

Understanding MetaTrader 4 (MT4)

MetaTrader 4 (MT4) is an electronic trading platform designed primarily for foreign exchange trading. Developed by MetaQuotes Software and released in 2005, MT4 is widely adopted among retail forex brokers, with industry surveys in recent years suggesting it remains one of the most commonly offered platforms.

The platform serves as an intermediary between retail traders and financial markets. It provides real-time price data, charting tools, order execution capabilities, and automated trading functionality. MT4 supports manual trading, algorithmic strategies, and technical analysis across multiple asset classes, though forex currency pairs remain its primary focus.

Retail traders, institutional investors, and introducing brokers use MT4 to access markets provided by their chosen brokerage firm. The platform itself does not hold client funds or execute trades directly. Instead, it transmits orders to the broker's server infrastructure, which routes them to liquidity providers.

Key Features of MT4 Trading Platform

MT4 offers several technical capabilities that have contributed to its industry adoption:

• Real-time price quotes and charting: Streaming bid-ask prices for tradable instruments with candlestick, bar, and line chart displays across nine timeframes, ranging from one minute to one month.

• Technical indicators: Thirty pre-installed indicators including moving averages, relative strength index, MACD, Bollinger Bands, stochastic oscillator, and Fibonacci retracement tools. Traders can also install custom indicators written in the programming language MQL4.

• Automated trading capabilities: Expert Advisors (EAs) execute trading strategies automatically based on programmed rules. These algorithms monitor markets and place orders without manual intervention.

• Multiple order types: Market orders, pending orders (buy stop, sell stop, buy limit, sell limit), and trailing stop losses enable various trade management approaches.

• Cross-device compatibility: Native applications for Windows and limited Mac support, plus mobile applications for iOS and Android. Web-based versions run in browsers without installation.

• Multi-language support: Interface available in around 40 languages, facilitating global adoption across diverse markets.

• Security protocols: 128-bit SSL encryption for data transmission and RSA digital signature verification for platform updates.

Feature availability varies by broker implementation. Some firms restrict certain order types, asset classes, or EA functionality based on their business model and regulatory jurisdiction.

How MT4 Works: Platform Mechanics

MT4 operates on a client-server architecture. The trader installs client software on their device, which establishes encrypted connections to the broker’s MT4 server infrastructure.

When you open MT4, the client software authenticates your login credentials with the broker’s server. Once verified, the server pushes real-time price feeds to your client. These quotes originate from the broker’s liquidity providers — typically major banks, electronic communication networks, or the broker’s internal pricing engine.

Price data displays in the Market Watch window and updates the charts. When you place a trade, the client software packages your order parameters and transmits them to the server. The server validates the order against your account balance, margin requirements, and available liquidity, then executes or rejects it.

Executed trades appear in your terminal window and the server updates your account balance accordingly.

MT4 stores historical price data locally on your device. The platform downloads historical bars from the broker’s server when you first view a chart. Subsequent data accumulates as you run the platform. This local storage enables offline chart viewing and strategy backtesting using historical data.

What is MT4 Used For in Forex Trading?

MT4’s primary function is spot forex trading — the buying and selling of currency pairs for settlement within two business days. The platform displays exchange rates for major pairs (EUR/USD, GBP/USD, USD/JPY), minor pairs, and exotic currency combinations.

Beyond spot forex, many brokers configure MT4 to offer CFDs on additional instruments:

• Equity indices: CFDs tracking the S&P 500, FTSE 100, DAX, and other major stock indices.

• Commodities: Gold, silver, crude oil, and natural gas.

• Individual stocks: Shares of publicly traded companies.

• Cryptocurrencies: Bitcoin, Ethereum, and other digital assets where regulatory frameworks permit.

Traders use MT4 for several activities:

• Technical analysis: Applying indicators and drawing tools to identify potential entry and exit points.

• Trade execution: Opening, modifying, and closing positions manually or through automated systems.

• Strategy backtesting: Testing trading algorithms against historical data to evaluate performance metrics.

• Risk management: Setting stop losses and take profit levels to define risk-reward parameters.

Forex and CFD trading involves significant risk. In the UK and EU, FCA and European Securities and Markets Authority rules cap retail leverage at 1:30. Higher leverage levels (e.g. 1:100–1:500) may be available in other jurisdictions but not to UK retail clients.

MT4 vs MT5: Key Differences Explained

MetaQuotes released MetaTrader 5 (MT5) in 2010 as MT4’s successor. Despite MT5’s technical advantages, MT4 maintained a dominant market share for years. The platforms differ across several dimensions:

MT5 offers superior technical specifications, including more timeframes, additional order types, and an integrated economic calendar. Despite these advantages, many brokers and traders prefer MT4 for its familiarity, larger EA library, and community support.

Benefits of Using MT4 for Trading

MT4 offers several advantages for retail traders:

• Widespread broker support: Over 1,200 brokers globally offer MT4, providing choice in trading conditions, regulation, and account types.

• Established community resources: Two decades of adoption have produced extensive educational content, forums, and indicator libraries.

• Extensive automation options: The MQL4 language and EA marketplace support algorithmic trading strategies.

• Familiar interface: Minimal interface disruption when switching brokers.

• Proven technical stability: Refined codebase and generally stable performance.

• No platform licensing fees: Many brokers absorb MT4 licensing costs, allowing free access for traders.

How to Download and Get Started with MT4

Follow these steps to begin using MT4:

1. Select an Regulated broker: Verify authorisation through your reigons official financial regulator. Ensure the broker accepts clients from your jurisdiction and complies with applicable local laws.

2. Complete broker registration: Submit ID and proof of address; verification usually takes 24–48 hours.

3. Download MT4 from your broker: Use only official links.

4. Install the platform: Compatible with Windows and Mac (via Wine or CrossOver). Mobile users can use iOS/Android apps.

5. Log in with broker credentials: Use your broker-provided login number, password, and server address.

6. Practice with a demo account: Most brokers offer demo accounts with virtual funds.

MT4 Trading Tools and Capabilities

MT4 provides several analytical and execution tools:

Technical Analysis Indicators

The platform includes 30 pre-installed indicators across four categories:

• Trend indicators: Moving averages, MACD, parabolic SAR, ADX.

• Oscillators: RSI, stochastic oscillator, CCI, Williams %R, momentum.

• Volume indicators: On-balance volume, money flow index, accumulation/distribution.

• Bill Williams indicators: Alligator, fractals, awesome oscillator, accelerator oscillator, Gator oscillator.

Chart Drawing Tools

Includes trend lines, channels, Fibonacci tools, support/resistance levels, rectangles, triangles, and text labels.

Automated Trading Infrastructure

EAs execute programmed strategies in MQL4, with backtesting and optimisation capabilities.

Order Management Features

• One-click trading from charts.

• Market and pending orders.

• Trailing stops for dynamic stop loss adjustment.

• Partial position closing for scaling out.

Is MT4 Right for Your Trading Needs?

MT4 suits certain trading profiles:

MT4 works well if you:

• Focus on forex and CFDs.

• Value community support and EA libraries.

• Prefer proven software and automation options.

Consider alternatives if you:

• Need advanced order types or more than nine timeframes.

• Trade equities, futures, or options.

• Want modern UI design or native Mac support.