MetaTrader Copier: How MT4 and MT5 Copy Trading Work

The Meta Trader copier is a powerful tool in the dynamic world of forex trading. Understanding how MT4 and MT5 copy trading works is of absolute necessity to those who intend to engage in copy trading.

Before we fully launch into the focus of this article, which is on how MT4 and MT5 copy trading works, let’s take a break to offer an explanation of what the Meta Trader actually is. We will also do well to shed light into MT4 and MT5, and of course, how copy trading works on these platforms.

Explanation of the Meta Trader

Forex trading entails quite a lot of things that facilitates its effectiveness. One of such things is a trading platform.  There are different trading platforms on which forex trading is executed by a vast number of traders and brokers.

One of such trading platform is the Meta Trader. It is a very popular trading platform  offering both investors and retail traders access to derivatives, commodities and stocks in major markets, which include the forex trading, cryptocurrencies and CFDs. The Meta Trader is developed by MetaQuotes Software Corporation. It provides a sophisticated infrastructure for brokers and traders to access incredible features  including market analysis algorithms, advanced charting packages, multiple indicator systems, among others.

The Meta Trader copier makes it possible for investors to replicate successful trading strategies across different trading accounts, given its flexibility, control and ability to streamline trade replication to meet the specific needs of different traders. Essentially, it facilitates copying and replicating of trading strategies from one Meta Trader account (usually referred to as the signal provider or expert trader) to another Meta Trader account (usually referred to as the copier).

MT4 and MT5

The MT4 (Meta Trader 4) and MT5 (Meta Trader 5) are both official versions of the Meta Trader platform created and distributed by the MetaQuotes Software Corporation. They both have certain similarities and differences which we will highlight below:

Similarities Between MT4 and MT5

Here are some of the major similarities between MT4 and MT5:

1.  Both the MT4 and MT5 platforms use a similar user interface having similar toolbars,   customizable charts and windows.  They both facilitate automated trading, technical analysis,     and provide access to trading services.
2.  They both have market watch windows that allow traders to track live price quotes of different      financial instruments.
3.  Both the MT4 and MT5 platforms allow multiple order types including pending orders, market     orders, take-profit and stop-loss orders.
4.  The MT4 and MT5 are both available both as mobile apps for Android and IOS and as web           based versions.

Differences Between MT4 and MT5

Below are some of the observable differences between the MT4 and MT5

1. While MT4 is basically designed for forex trading, with a strong focus on currency pairs (although it supports trading in a limited number of other financial instruments), MT5 has a wider coverage, support trading in forex commodities as well as other financial instruments.
2. MT4 uses MQL4 programming language which is suitable for simpler trading algorithms, whereas MT5 uses MQL5 programming language which is suitable for more complex trading algorithms and advanced backtesting.  
3. Another difference between both platforms is that the MT4 platform supports 4 types of pending orders. These buy limit, sell limit, buy stop and sell stop. On the other hand, the MT5 platform supports 2 extra types of pending orders in addition to the ones supported by MT4. These are buy stop limit and sell stop limit.
4. The MT4 platform offers 9  timeframes which ranges from one minute to one month. On the other hand, the MT5 platform offers 12 additional timeframes to the ones offered by MT4, making it a total of 21 timeframes offered by MT5.

How MT4 & MT5 Copy Trading Work

We can now give a detailed rundown of how copy trading works on both the MT4 and MT5 trading platforms. 

Step1. Select a Signal Provider

Signal providers refer to the expert traders who offer their trading strategies and activities for others to copy and replicate. Both platforms usually rate Signal providers based on certain metrics which include their trading performance, number of subscribers and risk levels.

Step2.  Subscription

Haven selected a signal provider, the next step is to subscribe to their signals. You can do this through the ‘signal tab’ in both the MT4 and MT5 platforms. This may involve paying a subscription fee and agreeing to the terms of the signal provider.

Step3.  Parameters set-up

Things to consider under this step include adjustment of trade size, risk management and synchronization. You can adjust your trade size to suit your risk tolerance. This is usually set as a fraction of the signal provider’s trade size. Options for risk management on MT4 and MT5 copy trading include maximum drawdown, stop-loss levels and limits on number of trade to copy. For account synchronization, it allows your account to be synchronized with the account of a signal provider so that the trading activities of the signal provider can be opened in your own account.

Step4.  Execute and Monitor

Once you set up the parameters properly, you can easily replicate and execute the trades of the signal provider automatically  on your account, including necessary adjustments. The MT4 and MT5 platforms also allow copiers to monitor the performance of copy trades with provision to make certain adjustments in real time.

Step5.  Ending a Subscription

One can equally decide to stop copying and subscribing to a signal provider and can choose to either retain or close existing positions. After ending a subscription the trader can exercise full control of the trades that are remaining.

Summarily, both the MT4 and MT5 copy traders are powerful platforms. They both facilitate copy trading experience for both beginners and expert traders. The MT5 platform however possesses more advanced features which gives it an edge over the MT4 platform.

Frequently Asked Questions

Does MT4 allow copy trading?

• Lots of the traders on the MT4 platform engage in copy trading. So, to answer the question, yes, MT4 allows copy trading. 

What is the best copy trading platform?

• There are various copy trading platforms that are recommendable, however, most traders prefer the eTORO copy trading platform.

Is copy trading easy?

• Copy trading can be easy when certain conditions have been satisfied. One major factor that makes it easy is the signal providers you copy.