A Beginner’s Guide to Trading Cryptocurrency CFDs Using MetaTrader 4

Developed in 2005 by MetaQuotes Software, the MetaTrader 4 (MT4) platform is one of the most widely recognized by forex and crypto brokers. It has become one of the most popular platforms for both novice and expert traders given that it is customizable, uses algorithms, and can be automated to execute transactions based on your personal preferences.

Important Notes on CFDs and MT4
The first thing to note is that trading on the MT4 is similar to day trading in the traditional stock exchange. Rather than owning and holding (or HODling, as it’s called in crypto-speak) the actual cryptocurrency, you are actively trading crypto Contracts for Difference (CFD) within a 24-hour period.

The second thing to note is that in crypto CFDs, nobody really owns or trades actual tokens. Instead, you are trading on cryptocurrency price movements. Meanwhile, you can make a profit by correctly speculating on the trajectory of a coin’s value. If you predicted correctly, you get paid the difference within the crypto’s value. Just this year, Markets Insiders shared that 25% of young Brit investors were trading in cryptocurrency CFDs.

Lastly, because day trading requires rapid planning, strategizing, and executing, MetaTrader 4 streamlines this process by providing access to interactive charts, nine timeframes, 23 analytical objects, and 30 technical indicators. This allows you to choose from preset trading strategies that are helpful, especially if you’re not trading full-time.

Getting Started with MetaTrader 4
Although the MetaTrader 4 has apps for iOS, Android, and PC, there are specific download requirements that your device must satisfy in order to run the platform. For optimal function, FXCM lists the minimum specs that you will need for the operating system including CPU, RAM, HDD, monitor resolution, and network connection. For instance, the RAM must be no less than 16BG and a 100 Mbit/s Ethernet connection is preferred.

Additionally, unlike trading in cryptocurrency, you won’t need a crypto exchange platform to start trading. Instead, you will need a reliable and regulated broker that offers cryptocurrency CFDs. This is especially important given that, in the UK, the Financial Conduct Authority (FCA) has issued new laws to regulate this trading. A compliant broker can help you navigate regulations while still offering you the most economical trading leverage and margin. Because MT4 is an industry-standard, you will find that most brokers work on this platform, too.

How to use MetaTrader 4

After you’ve found a broker, the next step is to open a trading account. Before going live, ask your broker about practicing on a demo account first. This allows you to get comfortable with the platform and its features. This is also the stage wherein you will be setting the fiat currency which you’ll be using to fund your trading. Although cryptocurrency CFDs can cost a lot less than a crypto token, it’s important to still heed the same ‘Risk Warnings’ as usual. Specifically, you should only invest what you can afford to lose, and don’t fall into the trap of thinking past performance guarantees future returns.

Next, you can start trading in the cryptocurrency you are interested in.
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In CFD trading, you aren’t able to access whatever tokens you want. But you can speculate on popular coins like Bitcoin and Ethereum. To help inform your decision, use MT4’s technical tools to study trends and value fluctuations. This can guide you in computing the leverage you can sustain.

Last but not the least, enter a trade position. This means “betting” if your crypto of choice will devaluate (go short) or appreciate (go long). At this point, you can decide if you will employ a stop loss or if you want to develop your own automated trading program using the MQL4 language. From here, although MT4 does employ automation, you should still monitor your position. By using the platform’s various technical indicators, you can accurately analyse when you are in a profitable position or not. This allows you to further fine-tune any trading strategies you have.

Conclusion

The MT4 trading platform can be a convenient trading platform that offers intuitive solutions—assuming you’re already a seasoned crypto trader. The volatility of cryptocurrency is part of what makes it exciting, but if you’re too hasty, your trading adventure may be short-lived.