Broker to Trading

MT5 is the successor to MetaTrader 4 (MT4), which these brokers also provide. MT5 contains a number of upgrades to MT4 including depth of market as standard, more technical indicators, time frames and graphical objects on the platforms and support for an expanded range of markets. MT5 can be used for both discretionary trading, where the trader makes their own trading decisions and automated trading where the computer program makes these decisions for the trader. Like MT4, MT5 provides Expert Advisors (EAs) to automate trading strategies.

To trade on MT5, the trader can sign up with the broker, then typically create an MT5 account. This can normally be live or demo. To use MT5, the trader will download MT5 from the broker. This is desktop MT5, which offers the full features of the platform, including automated trading. There is also a Web Trader, which is a slimmed down version of MT5, but does not need a download. MT5 can also be traded on mobile, There is a user friendly mobile version of MT5 which can be downloded from the relevant app store.

MT5 is typically offered by brokers which support the use of automated trading strategies. These are algorithms specifying rules to enter manage and exit a trade, at different frequencies.

Lower frequency trading is essentially the way a human trader trades with rules. When trading with rules, the trader is in effect following an algorithm except that at any time they can change their algorithm or try something else. This is exercising discretion, which the human trader can do to a greater or lesser extent. The problem with trading discretion is that markets, including Forex are complex and deviating from a rule can result in attempting to follow the market, which can be an experience of trading on volatility.

Computer programs aim to deal with the complexity of the market with their advantage of speed and accuracy, taking this to a kind of extreme of making rapid trades on changes in the market which a human cannot follow, with high frequency trading. However for the lower frequency trades, a human may still prefer to use MT5 trading robots (Expert Advisors) as they will not tire and will execute the instructions accurately, assuming no equipment or connection problems. Some trades will require the trader to execute them again and again even if at lower frequency and while this may be feasible for the human trader, they may find this hard to do, but a computer program will not. These kinds of trades may also be such that there is little room for discretion.

To some extent the strategies associated with algorithmic trading, the high frequency trades in particular can be seen as efforts to use the advantages of computer programs and bypass the need for discretion. AI (Artificial Intelligence) though can be seen as an effort to let the system learn and hence emulate discretion to some extent, but the typical trader may well be implementing a rule based on an indicator signal and may not be unduly concerned about this level of trading. The trader may wish to bypass any potential system or connection issues at their end by renting a Virtual Private Server (VPS), a connected computer system hosting and executing the trading robots used by the trader.

The trader can use EAs designed by others, but they also have the possibility of creating their own robots, which can be written in the MQL5 language. This means that the trader can write up the rules they have fine tuned by trading at their own discretion, seeing which may work and which may not. Strategies can be backtested on MT5, but the problem with all rule based system though is that because they worked in the past does not mean that they will work in the future. So there is always room for the trader to supplement the use of robots with knowledge from trades they enter, manage and exit themselves. MT5 has the tools for this kind of trading, with a somewhat larger set of inbuilt technical indicators. However the trader can also download other indicators and can even build their own in MQL5.