Many people frequently ask me for an opinion about MetaTrader 4 platform. I have used it and programmed automatic systems and indicators for years, but now I’m not using it anymore.
You could hardly find MT4 alternatives in the early days of trading. Everyone using MetaTrader 4 for technical analysis and automated trading. Other trading platforms like TradeStation were relatively unknown and hardly accessible to newcomers.
When in 2005-2008 there was a boom in online currency pairs trading, all the brokers that offered forex used MT4. Any indicator available on the market was for this platform, and the programming language was quite simple and flexible.
Thanks to MetaTrader, the first copy trading services were born, today transformed into social trading. You could find trading strategies everywhere; even forex brokers offered you automatic strategies.
Many forex traders start with a demo account, then move on to a live account where things generally go differently. One of the main problems of MetaTrader is the historical data.
The first automatic systems worked, and even simple strategies were easily practicable. When a market is very volatile, some automated trend follower systems could work. A bit like Cryptocurrencies today, currency exchanges had large movements throughout the day.
Related article: What increases market volatility?
At the close of the US session, it was easy to profit overnight scalpers for about a year. The history of online trading is similar to that of online poker, albeit with a different ending.
Related article: Growth and extinction of the online poker business
A huge business has been born around this phenomenon, and even today, many continue to trade in this market. The brokers that years ago only offered Forex trading have moved almost all on CFDs on equities.
Metatrader 4 is an old and outdated platform.
The main reason why you shouldn’t use MetaTrader 4 is that it has never renewed itself. It is an old technology that has not been adapted and renewed over time.
The future of trading is the cloud trading platforms like TradingView, which I see as a potential market leader. Those who do not adapt to this type of technology will go extinct. TradeStation or MultiCharts will also have significant problems staying competitive without following TradingView’s lead.
There was a lot of interest in the first few years, and on forums like ForexFactory.com, you could find all kinds of indicators. Today users have moved to other platforms, and even indicators and strategies are not significantly updated.
Primarily driven by automated trading, it doesn’t make much sense to exist now. As I have written several times, private forex traders will hardly be competitive with the advanced algorithms present in the market. Let alone what advantage you can have using an old, slow, and inaccurate platform such as MetaTrader 4.
Trading is not a simple buy or sell with a stop loss; you need speed and reliable data. The MT4 platform is slow and with untrusted data.
Market data provided with MT4 is not accurate.
Anyone who trades professionally knows that a good market data feed is costly. The most respectful brokers do not give away market data in real-time. You have to pay a lot of money, and a little private trader will never access the best data feeds.
With MetaTrader 4, in general, we cannot talk about market data. It is a set of approximate data that we can use for weekly or at most daily strategies. I see trader testing and using automatic systems on a 5-minute timeframe on MetaTrader 4 doesn’t work.
According to the broker, the market data changes, and it is not possible to do a backtest that is reliable. Therefore a time frame smaller than the daily is not to be taken into consideration.
When anything happens, the data is random, and some holes blow up any automatic system.
I am talking about automatic systems because it is one of the few reasons I used the Metatrader. I do not see the advantage of operating manually on such a platform.
You can find many online guides to get a 99% reliable backtest. These guides are not reliable because an MT4 backtest under the daily timeframe will rarely be trusted.
The programming language is complicated.
The automatic trading systems are written with the MQL language, which derives from other programming languages. I had a background in C++, so it was relatively easy to learn that language, but starting from scratch takes time.
I don’t think it’s worth it, considering straightforward programming languages like EasyLanguage for Multicharts that anyone can use.
MT4 MQL is superior to other languages used for automated trading systems from a pure programming point of view. You can write more complex systems with MQL than TradingView Pinescript or TradeStation and Multicharts EasyLanguage.
To make the most of MQL, however, you should be an experienced programmer. If you use it to write elementary strategies, learning such a complex programming language makes no sense.
Even becoming an experienced MQL4 programmer, there remains the problem of the unreliability of the data feed. So, any backtest would not be reliable, and you would waste time programming.
You can find much software that helps create automatic systems in MQL but does not give many possibilities for customization.
Would you use a 15-year-old computer with windows 97 installed to work?, maybe no, so you shouldn’t use MT4 either.
The best brokers don’t use MT4
By now, the brokers who still offer MT4 are almost certainly not the best on the market. They are unregulated brokers who provide you with leverage and earn on your losses as well as on commissions.
Price movements in forex are flat; brokers and more trusted platforms like TradeStation have even taken it out of their services. More serious brokers like Lmax don’t bet much on MT4; they have proprietary online platforms, but they are niches.
Many also use MT4 to invest in stocks through CFDs; it doesn’t seem like a good idea. If you want to invest in stocks, buy real stocks. Why do you have to buy a fake product that replicates a real instrument?
I know many people need to using leverage because they have little capital. But if many brokers give you all that leverage, it’s because they know you’ll lose your money quickly. Brokers earn from commissions to provide you with leverage and free tutorials for intraday trading strategies.
Related article: Why I believe intraday scalping is a bad idea
The death of volatility in forex has shifted attention to more volatile markets, first commodities, then equities. On these instruments, the commissions are very high, the financial leverage has a cost, which lowers the profits. It’s not investing; it’s playing with the financial markets; it’s not something I like.
Not all brokers that offer CFDs are poor, even Interactive Broker or Etoro offer it, and I consider them good brokers. CFDs are a tool that I don’t use because my investment time horizon is generally medium to long.
United States Stock market’s leverage is very low; to trade stocks intraday, you need at least $ 25,000. This law is to protect investors, and I agree with it.