Forex Trading Platforms – MetaTrader 4 and 5
The most popular trading platform is MetaTrader, and there is simply not a single trader in this world who hasn’t heard about it, or traded at least once with it. Not all brokers offer the possibility of trading with it though, as some have their own inbuilt trading platforms. MetaTrader is a common trading platform that any broker can use. It has its own app for mobile trading, and in that app one can choose the broker, type in the account number and password, and be granted access to the trading account .
MetaTrader 4 and 5
MetaTrader comes in two versions, 4 and 5, but MetaTrader 4 is far more widely used than MetaTrader 5. There are many reasons for that, but the most important one is that on MetaTrader 5 it is not possible to hedge a position. For example, it is not possible to open an EUR/USD long trade, and then at the same time a short trade for the same currency pair.
This is a major drawback, as it simply means that hedging strategies cannot be pursued, and there are many traders who use them. Just to give here an example of how a hedging strategy works, imagine the following. Traders have a specific trading system (a moving averages cross, or some oscillators offering divergence areas, etc.) and that system is applied on multiple timeframes, starting with the 5-minute chart and continuing with the hourly, 4-hourly, daily and even weekly charts – all on the same currency pair! Using this kind of strategy, often the 5-minute chart, for example, gives a bullish sign, while other timeframes may show the opposite direction, and traders simply follow the strategy and take all the trades. It is very possible that at one moment in time the account is fully hedged, or partially hedged until a stop loss or take profit order is reached on one of the timeframes. This kind of trading is extremely popular, especially with algorithmic trading, but the MetaTrader 5 platform does not allow it.