Even if you’re new to forex trading, you’ll have certainly heard of MetaTrader 4, the most popular and widely-used trading platform in the world, offered by most brokers including FX Pro. The question is, why do so many people choose to use it? Does it offer anything that other platforms don’t?
The answer to that is yes, and primarily because of what’s known as automated trading. This is quite simply where traders and script writers write algorithms that will automatically trade on the markets for you – there’s no need for human input for as long as it is running, and MetaTrader 4 is fully compatible with these, and also the platform on which you’ll find the most of these ‘forex robots’.
Trading by Numbers
The concept is fairly simple. Technical analysis is one of the two major schools of trading, and it looks to spot patterns and price movements in order to decide how to trade. When you think about it, it makes sense that a computer could do this. You’re not interpreting complex and abstract ideas like news announcements, but working purely with numbers and patterns. If you know exactly what you’re looking for, then a computer can do the job, and react accordingly. What’s more, it can generally do the job a lot faster than a human can too – reacting very quickly to changes, whether they’re in your favour or working against your strategy.
Of course, there are drawbacks to forex robots, which is why, although popular, they’re still not used by all traders. They are completely limited to do what you’ve told them to, and cannot react or act on anything outside that, so if something unexpected happens, there’s always the chance that things will go very badly, or you’ll miss out on potentially great returns. As an example, simulated competitions sometimes happen to see how good these ‘expert advisors’ are without actually trading real money. Some will do very well indeed, but there are always many that find themselves having lost all of their initial capital and more. Proven EAs are very valuable indeed.
So, MetaTrader 4 is an incredibly popular platform, and one you should definitely consider when choosing which one to use. If however you’re interested in the world of automated trading and the scripting of expert advisors, then it really is the only one that you should choose.