So far, we’ve managed to get Metatrader 4 installed and ready to go, and we’ve familiarized ourselves with the layout. In the fourth installment of Traders DNA’s Guide to Metatrader, we’re going to take you to the main event – placing and closing orders. This is the point at which all of your theorizing, speculation, and analysis are put into action.
It’s worth mentioning before we start that you should try this process out a few times in demo mode before you put it into practice, even if you have done plenty of trading before. That way, you can familiarize yourself with the process to the point where you don’t have to think about it when placing an order. After all, the last thing you want is to lose money because you made a mistake with the software. With that in mind, here is our step-by-step guide to placing an order in Metatrader 4.
Getting Live and Historical Market Data
Once you have opened an account and confirmed that you have a connection, the Metatrader 4 screen should be displaying live market data. If the charts aren’t updating, clicking on ‘Charts’ and ‘Refresh’ should get the data loading properly.
It can be useful to review historical data to test out strategies to see whether they would have worked in the past. This data can be downloaded from MT4’s History Center. Before you do this, you need to make sure that there is enough space for all the data to fit by changing the maximum number of bars. Determine the number of days that you need data for, and multiply it by 1,440 (60 minutes per hour x 24 hours). Then click on ‘Tools’ and then select Options >Charts>Max Bars in History and enter the result.
Then, you need to open the History Center by clicking on ‘Tools’ and selecting ‘History Center’. Double-click on an instrument and time frame to populate the database on the right hand side of the window, select the data that you want, and then click ‘Download’. This data can then be exported in a number of different formats. You can find out how to do this by clicking ‘Help’ and then ‘Help Topics’.
Opening and Modifying Orders
When you are ready to place an order into the market, you need to open the ‘Order’ window. You can do this by right-clicking a currency pair in the ‘Market Watch’ window and selecting ‘New Trade’, clicking on the ‘New Order’ button in the toolbar, or by right-clicking an active chart and selecting Trade>New Order.
There are a number of options for each order that can be selected within this window. These are:
‘Symbol’ – If you haven’t selected a currency pair already, this drop-down menu allows you to do this.
‘Volume’ – The amount of units that you wish to trade, expressed in terms of lots. One lot, which is 100,000 units, would be written as 1.0.
‘Stop Loss’ and ‘Take Profit’ – Specific orders as to the circumstances in which you would like to automatically exit the trade. These options are only available if you downloaded MT4 through certain brokers that support them.
‘Type’ – The type of order that you wish to place. The options here are ‘Market Execution’ (a market order) and ‘Pending Order’, which allows you to buy or sell automatically whenever the specified price point is reached.
To complete the order, click the ‘Okay’ button.
Viewing and Modifying Orders
You can now view your open order within the ‘Trade’ tab of the ‘Terminal’ window. If you wish to modify it, for example to add a stop loss order, highlight the trade from within this window, right-click on it, and select ‘Modify or Delete Order’.
A new window should then open, where you can specify stop loss and take profit levels. To populate the stop loss and take profit fields with the current price, click on ‘Copy As’. Once you have set the levels that you want, click on the long horizontal bar at the bottom of the screen. This bar will only be highlighted if there are valid stop loss and/or take profit levels (ie 10 pips or more away from the trade entry level) in the dialog boxes have been entered.
Any stop loss or take profit orders that you place will appear on the chart as horizontal lines that correspond with the price levels that you have set, making it easy to monitor trades. If you want the stop level to be able to move up (if you are taking a long position) or down (a short position), you can set up a trailing stop as a complement to your original stop loss order. To do this, right-click an open position in the ‘Trade’ tab of the Terminal, click ‘Trailing Stop’ and specify the level that you want.
Once you have set up the orders, they will close automatically whenever the price hits the stop loss, trailing stop, or take profit level. You can also close it manually at any time by highlighting the trade in the ‘Trade’ tab of the Terminal, right-clicking on it, and selecting ‘Close Order’.
The order can be confirmed by clicking on the yellow horizontal bar at the bottom of the window. This window can also be made to appear by double-clicking on the trade in the ‘Trade’ tab of the terminal.
Trades can also be closed by opening an opposing position, For example, if you had a long 1.0 EURGBP position open, it could be cancelled by entering a short 1.0 EURGBP position. This technique is sometimes known as the SAR (stop and reverse) method.
You can see all open trade activity in the ‘Trade’ tab of the Terminal, and your entire account history can be seen within the ‘Account History’ tab within the Terminal.
Other posts in this series: