XS Online Trading Courses

What Are Trading Platforms?

Now that we’ve covered financial markets and various types of trading, a key question remains: Where does trading actually take place? The answer lies in online trading platforms.

In this lesson, we’ll explore what trading platforms are, the main types available, and take a closer look at two of the most widely used platforms: MetaTrader 4 (MT4) and MetaTrader 5 (MT5).

A trading platform is software that allows traders to buy and sell assets like stocks, forex, commodities, and indices. Brokers and banks provide these platforms and come with tools that help traders analyze markets, execute trades, and manage their investments.

Once you create an account and fund it, you can start trading in a secure and regulated environment.

Types of Trading Platforms

Not all trading platforms are the same. There are two main types based on how they’re built: proprietary trading platforms and commercial trading platforms.

Proprietary Trading Platforms are platforms are developed by brokers for their own clients. They’re designed to fit the broker’s specific business model and often come with customized features. However, they are not available to the public outside of the broker’s ecosystem.

Commercial Trading Platforms are These platforms are designed for retail traders and are widely available. They usually have user-friendly interfaces, real-time news feeds, advanced charts, and technical analysis tools. MetaTrader 4 (MT4) and MetaTrader 5 (MT5) fall into this category.

Trading platforms can also be categorized based on how you access them:

• Desktop Trading Platforms: Installed on a PC or laptop, these platforms offer the most features and are updated frequently. They are ideal for professional traders.

• Web-Based Trading Platforms: These work through a web browser, meaning there’s nothing to download. They may not have all the features of desktop platforms but are fast and convenient.

• Mobile Trading Platforms: These are apps for smartphones and tablets. While great for trading on the go, they often have fewer features than desktop platforms.

The Most Popular Trading Platforms: MT4 and MT5

Now, let’s talk about two of the most widely used trading platforms:

What Is MetaTrader 4?

MetaTrader 4 (MT4) was developed by MetaQuotes in 2005 and remains one of the most popular trading platforms and is free to download through MetaTrader 4’s website.

MetaTrader 4 Features

• User-Friendly Interface: Simple and easy to navigate for traders of all levels.

• Advanced Charting Tools: Multiple timeframes and indicators for technical analysis.

• Automated Trading: Supports Expert Advisors (EAs) that execute trades automatically.

• Custom Indicators: Traders can create or download custom tools to enhance analysis.

• Multiple Order Types: Supports market orders, pending orders, and trailing stops.

• Mobile Trading: Available on smartphones and tablets for trading on the go.

• Strategy Tester: Backtest strategies using historical data.

• Multi-Language Support: Accessible to traders worldwide.

MT4 is best known for its simplicity, reliability, and automation capabilities.

What Is MetaTrader 5

MetaTrader 5 (MT5) is the newer version of MetaTrader, which was also developed by MetaQuotes and can be downloaded directly from their website.

While MT4 is focused primarily on forex trading, MT5 is a multi-asset platform that supports stocks, indices, futures, and commodities.

MetaTrader 5 Features

• Enhanced Charting: More timeframes and built-in technical indicators than MT4.

• Depth of Market (DOM): See real-time liquidity and place trades based on market depth.

• More Order Types: Includes Buy Stop Limit and Sell Stop Limit for more flexibility.

• Economic Calendar: Provides real-time updates on economic events affecting markets.

• Built-in Market Analysis: Fundamental analysis tools, including financial news.

• Improved Strategy Tester: Multi-threaded optimization and cloud network support.

• Hedging & Netting: Unlike MT4, MT5 supports both hedging and netting, giving traders more control.

• Advanced Timeframes: Includes 2-minute and 8-hour charts, offering more detailed market views.

MT5 is a powerful upgrade from MT4, but many traders still prefer MT4 for its simplicity and automation tools.

MT4 vs. MT5: Which One Should You Choose?

MT4 is best for:

• Forex traders who rely on Expert Advisors (EAs) and automated trading.

• Those who prefer a simpler, faster, and more familiar platform.

MT5 is best for:

• Traders who want to trade stocks, commodities, and futures in addition to forex.

• Those who need advanced charting, market depth, and more order types.

Both platforms offer top-tier trading tools, so it depends on your trading style and preferences.

Lesson Summary

• Trading platforms are software used to buy and sell financial assets online.

• There are two main types: proprietary platforms (built by brokers) and commercial platforms (for public use).

• Trading platforms can be accessed via desktop, web, or mobile.

• MetaTrader 4 (MT4) is a simple, widely used platform with automation and customization tools.

• MetaTrader 5 (MT5) offers more features, deeper market access, and multi-asset trading.

• Choosing between MT4 and MT5 depends on your trading needs and asset preferences.

Now that you understand how trading platforms function, you're ready to start using them effectively. In the next lesson, we’ll explore how to interpret financial news to support more informed trading decisions.