Forex Trading Basic

Introduction to MT4 Platform, Part 2

Forex Trading Hedging Strategy

In this article, we will have a closer look on the MT4 Platform functions including opening and closing orders in MT4 platform. In the previous article, Introduction to MT4 Platform, Part 1, we have discussed How to download and install MT4 platform.

Note that we are using the MT4 Account of HYCM Broker to describe the functions of MT4 platfrom. Find out why HYCM Broker Platform is the best for new forex traders.

Opening a Position

There are multiple ways to enable the Trading order window in MT4:

  • Right click on the market watch window at the left side of MT4 platform and select “New Order”
  • Press F9 key from keyboard, then you can use Select Tools -> New order
  • Right click on the chart of the pair you then choose
    -> New Order
  • The easiest way: double click on the Forex pair you in the “Market Watch” window.

This is how the order window looks like:

Functions of MT4 Platform

Market entry orders

The order window is very much simple to navigate. On the left side of the order screen is the current Forex tick chart of a pair. The two lines on that window represent the bid/ask values, which are also shown in large numbers in the box. Recall that if you buy a Forex pair you are getting in at the ask price (higher number) and if you sell a Forex pair you are getting in at the bid price (lower number). The simplest way to execute an order now, is to either hit the red “sell” button or the blue “buy” button.

An immediate order is a buy or sell that you want executed immediately at the current market price. As soon as you press the buy or sell button Metatrader will show you a confirmation box. Here you can view the vital information about your trade and confirm entry.

Before entering a market order you need to pay attention to a few things:

  • Symbol – This is the currency pair or the financial instrument that you
    would like to speculate on.
  • Volume – This is the number of lots that you will be trading.

You can also add a stop loss order and a take profit order to your market entry order right away. What this means is, if you are placing a trade you can enter an order to protect yourself and get out of a position if the market moves in a certain amount of pips against you and then you can enter a take profit order that will lock in your profits once the market has moved a certain amount of pips in your direction. By using Metatrader 4 you can enter these protective orders along with your “normal” orders so you don’t have to worry about adding them later.

Functions of MT4 Platform

Once you confirm your order by clicking the OK box the new position will be listed in the “Trade” tab of the “Terminal” window. This means that you just entered a position on the market order and are now in a trade.

Pending Orders

A pending entry order is an instruction to get into a position when a price reaches a predetermined level that you have preset. If the price never reaches the level you specify, the order is never executed.

Essentially there are 2 types of pending entry orders; entry stop orders and entry limit orders. Here is a breakdown of each order type and the logistics behind it:

Limits and Stops

There are four kinds of pending execution orders you can place:

Buy Limit

An order to buy a currency at a price BELOW the current market price. You will want to enter this order when you want to get in the market at a price that is lower than the current price.

Buy Stop

An order to BUY a currency at a price ABOVE the current market price. You will want to place this order to enter your position when a certain price level is crossed. This order type is typically used on break out trades.

Sell Limit

An order to sell a currency at a price ABOVE the current market price. You will want to enter this order to get in short when the price moves higher.

Sell Stop

An order to sell a currency at a price BELOW the current market price. You will want to place this order to enter short once a specific level has been broken down.

Below is a graphical representation of the various order types. The bars in the black represent the instrument price at the time of order entry and the line represents where the order is placed and the direction of your trade.

Functions of MT4 Platform

Below is a picture of the pending order entry box on the Metatrader 4 platform:

Functions of MT4 Platform

As with an immediate order the left side of a pending order screen shows a brief tick history of the currency pair, both bid and ask. The currency symbol, volume, stop loss, and take profit work the same as with an immediate order.

However, pending orders contain several more parameters to help MT4 understand when and if to actually place the order.

Closing a Position

Once you are in a position, your trade will appear in the terminal window when the trade tab is highlighted. You can find the trade tab at the bottom left hand corner of your platform.

Once the trade tab is selected and you see your trade you can right click on it and a box will come up that will have a “close order” option.

You can also access the close order screen by double clicking on the order.

 Functions of MT4 Platform

Once you select the close order command the order number box will appear. To simply close the order instantly at the current market price, press the yellow close order button.

Functions of MT4 Platform

Stop Loss and Take Profit Orders

You can also place pending orders to close out your trades. The most popular of these types of orders are Stop Loss and Take Profit orders.

Stop Loss

A stop loss order is an order placed to limit your losses on an open position. For a long position it is placed below the entry price and for a short position it is placed above the entry price. The basic premise, is if you enter the trade and add a stop loss order and if the market will move drastically against you, you will take a predetermined loss which is limited. One key factor to keep in mind is that a stop loss order always turns into a market order once the price crosses it. So you will not always be filled at your stop price you may be filled at a price that is worse.

Take Profit

A take profit order is a limit order to close your position once a certain amount of profit was reached. This is placed above the entry price on long positions and below the entry price on short positions. The basic premise here is to lock in your profit once it is attained, make sure not to give it back in case the price moves against you and that you are not in front of your computer.

You can place the stop loss and take profit orders either at entry or after you make a trade. As you can see there is a stop loss and a take profit option in the order entry box below.

Functions of MT4 Platform

Once you have entered an order with a stop loss and/or a take profit option attached to it you can modify the order.

In order to do this you will need to select the trade tab in the terminal window of your platform again (bottom left hand corner) right click on your open trade and select modify.

Here is what the modify order box looks like.

Functions of MT4 Platform

You can modify the stop loss and take profit levels by changing the numbers in the stop loss and take profit boxes above. There is a minimum distance that your stop loss and take profit orders can be from the current market price and entry price. Once your orders are legitimate the Modify button will become blue or red and you can modify your order.

A trailing stop order is a stop loss order that follows the market price of your instrument, as it moves in your direction. So as the price moves in your favor the trailing stop will move with the price. For example, if you select to buy a particular currency pair and place a 15 pip trailing stop loss the trailing stop will initiate as the price moves up 15 pips in your favor. And the trailing stop will move up with the price, so as the price moves up 1 more pip and you are 16 pips in profit and the stop loss will also move up 1 more pip from your original entry. Please keep in mind that the trailing stop can only move in the direction of your trade, never against it.

The Bottom Line: MT4 Platform functions

It is very important to note that no trailing Stop Loss order will be placed until the market moves in your favor as mentioned above. Therefore until this has happened, to limit losses, a separate Stop Loss would need to be placed manually.

In order to place a trailing stop, highlight the open position in the “Trade” tab of the “Terminal” window and right click to open the context menu and select the trailing stop option.


Chapter 3Getting Started with Forex Trading
Lesson 1Choosing Forex broker
Lesson 2Best Trading Platform
Lesson 3Introduction to MT4 Platform
Lesson 4MT4 Platform functions
Lesson 5Opening Demo Trading Account

Go back to Main Page:Forex Trading for Beginners 

About the author

Md Chhali Uddin

Md Chhali Uddin is a Renowned Financial Analyst. He is also involved with as a writer and financial Analyst. He is a brilliant Financial geek with vast experience in every sector of Currency Trading.

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