Whether you are just starting your journey into forex trading or you’re an experienced trader looking to enhance your skills, this guide will help you master the platform. MT5 is the successor of the highly popular MetaTrader 4 (MT4) platform and offers several improvements that appeal to modern traders.
With advanced charting capabilities, customizable indicators, and automated trading features, MT5 has become the go to platform for many forex traders. Knowing how to use MT5 to its fullest potential will definitely give you an edge in the highly competitive forex market.
Let’s explore everything from installing the platform to executing complex trades and using its most advanced features.
What is MT5 Forex Trading Platform
MetaTrader 5 is a multi-market platform for trading developed by MetaQuotes Software Corporation. It is used to trade various financial markets such as forex, stocks, futures, and commodities. Real-time market data, analysis, and order execution are some features provided by this platform.
MT5 was introduced in 2010, and its main goal was to offer an upgraded version of MT4, which was known for its user-friendly interface and powerful capabilities.
While MT4 still remains popular among forex traders, MT5 offers several advantages, such as more timeframes, greater charting features, an economic calendar, and enhanced support for automated trading systems (Expert Advisors or EAs).
Installing and Setting Up MT5
Before you can start trading with MT5, you actually have to download it onto your device. The platform is available on Windows, macOS, Android, and iOS, so both desktop and mobile traders alike are covered. Follow these easy steps to get started:
Step 1: Download MT5
Download MT5 from either the official MetaTrader website or through your broker’s platform onto your device, whichever type suits your needs. Be careful where you download from, ensuring it is a safe site and there are no viruses/malicious software.
Step 2: Installation of MT5
You should run an installation file you downloaded and then follow all installation process prompts. It’s rather quick and easy since most actions will be performed automatically anyway.
Step 3: Start the Platform
Once the installation is complete, launch the MT5 platform. You will be asked to log in with your account credentials provided by your broker. Below is how to proceed further in using the MT5 platform for trading:
Step 4: Select a Broker
MT5 allows the use of several brokers. Now, select the broker you opened the account with. If you have not yet selected a broker, choose one that provides MT5 and create a demo or live account.
Understanding the MT5 Interface
Upon accessing your MT5 terminal for the first time, you will be greeted with a sleek, intuitive interface. Although it may look daunting at first sight, once you become accustomed to the features, it will be quite easy to navigate. The following are the key elements of the MT5 interface:
1. Market Watch Window: This section contains all the available trading instruments that are available. It includes forex pairs, commodities, indices, stocks, and so on. The list can be customized by adding or removing any of the instruments as you would prefer.
2. Charts Window: This contains a graphical representation of live market data. MT5 advanced charting includes chart types such as bars, candles, and lines, multiple time frames, zoom-in/zoom-out functionality, and many more.
3. Navigator Window: This window enables you to switch between your accounts, indicators, and Expert Advisors quickly. You can also open new charts and manage your trading settings from here.
4. Terminal Window: This is the most important window in MT5, where you can manage your orders, view your account balance, and track your trading history. You’ll also find your open positions, margin level, and transaction history here.
5. Toolbars and Menus: Along the top, toolbars and menus are available for you to activate various functions such as opening trades, changing chart properties, applying indicators, and many other customization options.
How to Place a Trade on MT5
Now that you have a good idea of how the platform is laid out, it’s time to place your first trade. Thankfully, placing orders in MT5 is pretty straightforward, and there are several order types you can use depending on your strategy. Let’s break down the steps:
Step 1: Open a New Order Window
To open the order window, right click on the chart of the instrument you want to trade and select “New Order” or use the shortcut key: F9. The order window will open.
Step 2: Select the Instrument
In the “Symbol” section, select the forex pair, commodity, or other asset you want to trade. Here is where the “Market Watch” window comes in handy, as you can simply drag and drop the instrument onto the chart.
Step 3: Select the Order Type
MT5 supports several types of orders:
Market Order: This will execute your trade at the current market price.
Limit Order: A limit order gives an indication that one wants to sell or buy at a certain price or even better.
Stop Order: Stop order involves having an entry in the market by the attainment of the level in question.
Step 4: Set Trade Size
Lot size for your trade goes here. This defines how much you want to trade of that particular asset.
Step 5: Set Stop Loss and Take Profit
Fill in the “Stop Loss” and “Take Profit” fields with your risk management levels. The stop loss will automatically close the position when the market goes against you by a specified value; the take profit will lock in profits when the market reaches a certain price.
Step 6: Execute the Trade
Once you have set all the parameters, click “Buy” or “Sell” to execute the trade. Your position will appear in the “Terminal” window, where you can monitor its progress.
Managing Open Positions
After placing a trade, it is very important to manage your open positions effectively. MT5 makes it easy to modify and track your trades:
1. Modify Orders: Open the “Terminal” window. You can right-click an already opened position and click on “Modify Order.” Thus, you can adjust stop-loss, take profit, and trading size.
2. Close Order: Right-click in a trade in the “Terminal” window and choose “Close Order.” Alternatively, use an “X” sign placed next to a trade.
3. Trailing Stop: MT5’s trailing stop will automatically help to lock in profit as the market starts moving in your favor. This stop-loss follows the price as it moves with the trend, ensuring your profit on a trade when a reversal occurs.
Technical Analysis Using MT5 Tools
MT5 is designed to meet all your needs in making qualified trading decisions with the widest range of technical analysis tools. Some essential tools are:
1. Indicators: MT5 contains a lot of built-in indicators, from a simple moving average to complex multi-indicator systems like Bollinger Bands, RSI, MACD, and lots of others. You can add them onto your chart simply by dragging the ones you want from the “Navigator” window.
2. Charting Tools: MT5 provides you with multiple types of charts, such as candlesticks, bars, and line charts, as well as various time frames-1-minute, 5-minute, hourly, daily, weekly, etc. Also, you can draw on the charts with trendlines, Fibonacci retracements, and channels.
4. Economic Calendar: The platform includes an integrated economic calendar, allowing you to stay updated on important economic events, such as interest rate decisions, GDP reports, and employment data.
Automated Trading with Expert Advisors (EAs)
One of the standout features of MT5 is its support for automated trading using Expert Advisors (EAs). An EA is a program written in the MQL5 programming language that can automate your trading strategy. Here’s how to use EAs:
Step 1: Install an Expert Advisor
You can download EAs from the MetaTrader Market or write your own. After receiving an EA, install it by copying the file into the “Experts” folder in your MT5 data directory.
Step 2: Activate the EA
After installation, locate the “Navigator” window, find your EA, and drag it onto the chart of the instrument you want to trade.
Step 3: Configure Settings
You can set the EA settings according to your choice by changing parameters of risk management, trade size, and indicators. Each EA is unique, so make sure you understand how it works before you turn it on.
Step 4: Monitor and Optimize
After the EA is up and running, observe its performance and optimize it if needed. MT5 allows testing of EAs using historical data in the “Strategy Tester” for refinement of your trading algorithm.
Risk Management in Forex Trading with MT5
The essence of long-term success in forex trading lies in proper risk management, and MT5 provides you with multiple tools for this. You should always make sure that a trade you place is appropriate to your risk tolerance and the size of your account.
1. Stop Loss and Take Profit: As earlier stated, setting a stop loss and take profit level ensures that you protect your capital and lock in profits at predefined levels.
2. Position Sizing: Proper position sizing is important to ensure you don’t risk too much on any single trade. MT5’s risk management tools, such as margin levels and free margin, help you keep track of your available capital.
3. Hedging: MT5 also allows hedging, which means you can open buy and sell positions on the same instrument simultaneously. This can be useful when there is a high volatility in the market.
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Frequently Asked Questions (FAQs)
Can I use MT5 only for Forex trading?
- No, MT5 is not limited to forex trading. It also supports trading in stocks, commodities, indices, futures, and cryptocurrencies, making it a versatile platform for various asset classes.
How do I place a trade on MT5?
To place a trade on MT5:
- Open the “New Order” window by pressing F9 or right-clicking on the chart.
- Choose the trading instrument from the “Symbol” dropdown.
- Select the order type: market, limit, or stop.
- Set the trade size, stop loss, and take profit.
- Click either “Buy” or “Sell” to execute the trade.
Is it possible to trade on MT5 from a mobile device?
- Yes, MT5 has both iOS and Android apps. You can download the app from App Store or Google Play. The mobile version allows you to monitor your trades, place orders, use indicators, and analyze the markets on the go.
Can I use multiple charts at once on MT5?
- Yes, MT5 allows you to open multiple charts simultaneously. You can view different time frames, assets, or trading strategies on separate charts, helping you analyze the market more effectively.
Is MT5 free to use?
- Yes, MT5 is free to use. However, you’ll need an account with a broker that supports the platform. Brokers may offer different account types with varying spreads and commission structures, but there is no cost to download or install the MT5 software itself.
