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MetaTrader 5 Trading System

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Forex Trader
114257
Forex Trader 2009.09.16 10:15 

The trading system in MetaTrader 5 differs from that of MetaTrader 4 in its basics. First of all, four types of trade operation execution are supported in MetaTrader 5: Market, Instant, Request and Exchange. Secondly, the new terminal accepts the strict delimitation between the notions of Order, Trade and Position.

  • Order. This is the direction to a brokerage company to buy or sell a financial security. There are two major types of orders: market and pending. Two more special orders are available in the new terminal - Take Profit and Stop Loss.
  • Trade. It`s the fact of security buying or selling. A Buy is performed at the Ask price, while Sell is done at the Bid price. A trade can be opened as the result of market order execution or pending order activation.
  • Position. It`s a market obligation, number of bought or sold security contracts. A long position is a symbol bought expecting the security price raise. A short position is the obligation to supply it expecting the further price fall. Only one position for a certain security can exist on a trade account.

Trade positions in MetaTrader 4 and MetaTrader 5
Differences between trade positions in MetaTrader 4 and MetaTrader 5

Besides the Buy and Sell market orders, 6 types of pending orders are supported:

  • Buy Limit is a trade Buy order at the Ask price equal to or better than that indicated in the order. Usually orders of this type are placed expecting that the symbol price falls till a certain level and starts raising then.
  • Buy Stop is a trade Buy order at the Ask price equal to or better than that indicated in the orders are placed when a security price us expected to get over a certain level and continue growing.
  • Sell Limit is a trade order to sell at the Bid price that is equal to or better than that indicated in the order. In this case a security price is expected to raise till a certain level and go downwards after that.
  • Sell Stop is a trade order to sell at the Bid price that is equal to or better than that indicated in the order. The current price level is above the value indicated in the order. Usually such orders are placed when a security is expected to fall down to a certain level and continue the downward moving.
  • Buy Stop Limit - this type of orders is the combination of the first two types being a stop order for placing a Buy Limit order. As soon as the Ask price reaches the specified value, a Buy Limit order will be placed at the level indicated in the order. The current price level is lower than that, reaching which a pending order will be set.
  • Sell Stop Limit - this type is the stop order to place a Sell Limit order. As soon as the future Bid price reaches the value specified in the order, a Sell Limit will be placed for the level indicated in the order. Here the current price level is above the value, reaching which a pending order will be placed. The price of the pending order is above the level of its placing.

Pending Orders in MetaTrader 5 Client Terminal
Pending Orders in MetaTrader 5 Client Terminal

All these possibilities enable you to flexibly control all trading activities and implement almost any trading strategy.

How Does It Work?

An order to execute a trade with indicated parameters is sent to a broker from the client terminal. The order correctness is checked on the server. Are all the parameters (balance, lot, price, etc.) indicated correctly? If any of parameters does not meet the requirements, the order is rejected. If everything is correct, a trade order is placed to the Order Queue, after which it is sent to a dealer or to the market. An order can be also rejected in the market (stock exchange) or by the dealer.

Trading operations Execution in MetaTrader 5
Trading operations Execution in MetaTrader 5

An order turns into a trade if all its parameters are correct and it has been executed in the market. Depending on the current position for the security, the trade can result in the position increase, decrease or closing.

Example: we've got one position for EURUSD 1 Lot. If another lot is bought, the position will be increased to 2 lots. If 1 lot is sold, the position will be closed. If 0.7 lots are sold, the position will diminish to 0.3 lots.

Fill Policy

Besides common order execution rules set by a broker, trade operation execution policies can be set in MetaTrader 5. These policies allow making trading activities more flexible and setting strict parameters to manage the execution of trade operations.

MetaTrader 5 Fill Policy
MetaTrader 5 Fill Policy

  • All or None
    With this condition, a trade can be executed only for the indicated volume and at the price equal to or better than that indicated in the order. If the enough security volume is currently unavailable in the market, the order won't be executed.
  • Cancel Remains
    In this case a trader agrees to have a trade executed for the volume maximally available in the market within the volume specified in the order and at the price equal to or better than that indicated in the order. No additional orders are placed for the deficient volume.
  • Return
    In this case a trader agrees to have a trade executed for the volume maximally available in the market within that specified in the order and at the price equal to or better than that indicated in the order. Besides, an additional order is placed for the deficient volume at the price indicated in the order.
Forex Trader
114257
Forex Trader 2010.04.04 06:37  
The currently described trade position setup in MT5 is not going to be better than that of MT4. Each position setup, MT4 style or MT5 style, has it's advantages and disadvantages. I will elaborate if requested, but anyone who has traded live ought to know these. If MT5 is going to be a real step up from MT4 then please don't just change something that traders have had some issues with, but yet also have learned to take advantage of in some trade situations. For the next Meta Trader platform an increase in flexibility is the desired expectation. If possible I would like to see the ability to switch between the position styles,especially if it could be done at any time. This would make MT5 really useful for getting into a trade and scaling in and out easily with the new position style, yet when switched to the MT4 position style would allow for being in a longer term position trade and yet performing day trading in the other direction in the same currency pair, as is allowed by some brokers (eg short 10 minis EUR/USD for a long term position trade and scalping long 5 minis and holding both positions concurrently). Thanks.
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