Free Trading Platforms Compared: MetaTrader 4, MetaTrader 5 & cTrader
This guide will introduce popular free trading platforms for beginners looking to enter the market. This is an introduction to particular platforms. If you would like to learn more, please visit the appropriate websites.
Nowadays, retail traders have access to a variety of different types of trading platforms. Beginners often choose a platform that is not in line with their style or stick to the platform which they were first introduced to.
Platforms and software range from web-based platforms all the way through to independent proprietary charting and trading software, with the latter being the most expensive.
In between you have standalone systems, which require licensing and broker-based platforms, which have been developed by the brokers themselves.
In this article, we will introduce some of the best free platform’s beginners can get their hands on. Each have their ups and downs so it would be sensible to try them out by signing up for demo accounts.
Table of Contents
MetaTrader 4, or MT4 for short, is a trading platform and software developed by MetaQuotes. With its first release back in 2005, MT4 has gained enormous popularity from brokers and traders and its large service offering has allowed it to become the most popular free trading platform.
MT4 works by brokers paying for a licence to receive the right to use MT4. The platform will display the brokers logo, assets and prices. When orders are placed or executed, they are routed through the broker.
Features & Benefits
MT4 comes as a complete package for users. The platform displays all the quotes available by the broker and the user is able to view asset specifications. MT4 also provides low latency order execution, ensuring your trades are executed as fast as possible. In addition, traders are able to enter positions at conditions which suit them best as MT4 offers both instant and pending order entries.
In terms of charting and technical analysis capabilities, MetaTrader 4 offers a wide range of analytical tools, including 30 indicators and 24 drawing tools, making it great for beginners. The platform also offers 3 different charting types and 9 timeframes, accommodating both short-term traders and investors.
Moreover, charts are very customisable. The ability to edit just about anything on the chart gives users a great deal of versatility. Toolbars can also be changed to suit what you require for easy access.
For those wanting to work on algorithmic trading, programme their own expert advisors, robots, scripts and indicators then MT4 provides users these capabilities. MQL4 (MetaQuotes Language 4) is an object orientated programming language which allows users to code within MetaTrader.
Finally, a key benefit for beginners is the accessibility and community around the platform.
Firstly, many UK brokers offer MT4 as their platform of choice. Whether you aim to trade or invest in FX, Indices, Commodities, Stock, Bonds & Interest Rates, there is most likely a broker out there providing MT4 as one of their platforms. This comes in handy if you choose to change brokers as it saves you the time from learning a new platform and re-charting your charts. Furthermore, MetaQuotes provides a mobile app and online web version of their benchmark platform. This allows you to look for new opportunities, view your current positions and manage risk when you are away from your computer.
Secondly, the ever-growing MT4 community allows users to download indicators, robots, expert advisors and subscribe to signal and copy trading services from anywhere in the world. If you require an indicator that isn’t built-in, chances are it is on the MetaTrader community page.
Despite the popularity and all the features that MT4 comes along with, the platform is still very basic when compared to some cost-effective standalone software’s. Technical tools and indicators are limited and advanced technical research tools are not available. Chart are restricted to the most basic types. Drawing and annotation tools are limited, especially for those who are analysts.
Moreover, MT4 was originally built for trading on the FX market. There is more support from brokers for FX products than any other asset class. Therefore, for those wanting to trade a wide range of commodity products or a range of equity indices, it may be tricky to find a broker that supports this. As well as this, there is no support for futures and options on MT4.
From an investment perspective, there is no fundamental analysis, stock & sector research capabilities. Therefore, equity traders are limited to the use of technical analysis and would be required to do their fundamental research on a different software.
Overall, MetaTrader 4 is a really good beginner software, especially those looking to enter the FX market. The platform is quick to learn and easy to get used to alongside providing the main tools required by the majority of beginner traders. Some of the issues mentioned above can be overcome by downloading or programming your own tools. However, those beginners looking to invest, or those wanting greater technical analytical capabilities should look for another software.
Meta Trader 5
In 2009, MetaQuotes released an updated version of the MT4 platform called MetaTrader 5. MT5 aims to address many of the problem’s traders encountered with MT4, even as development has continued for the older generation platform. The latest generation MT5 comes with an updated layout, more indicators (38 in total), more drawings and annotation tools (44 in total) as well as more timeframes (21 in total).
MT5 has also added fundamental analysis into the platform by providing daily a broadcast of financial news and an economic calendar to monitor global macro data.
In addition, MT5 offers DoM (Depth of Market) and Time & Sales of exchange data-something the older platform lacked.
Among the advantages, MT5 still comes with many downsides. The newer platform has still not been adopted by many brokers in the UK as they still provide MT4 as their platform of choice. Moreover, MT5 still remains a basic platform. Limited improvements have been made for those who trade or invest in stocks. Support for advanced research has also not been implemented.
Given these points, MT4 continues to be the more popular option for traders and brokers. However, MT5 is the better option for anyone looking to put their capital in stock/bonds or are thinking of trading futures or options.
cTrader, developed by Spotware Systems Ltd, is a product similar to MT4/MT5. Spotware’s platform has recently gained greater traction from UK brokers and is more accessible than it was some years ago.
cTrader works in a similar fashion to MetaTrader. Brokers, or dealers, have to apply for a license to gain the right to use Spotware’s flagship platform. cTrader specifies the use of recognised liquidity providers for brokers, allowing for a consistent standard of execution. The platform executes orders against the full order book by using Volume-Weighted Average Price (VWAP).
Features & Benefits
Just like MT4/MT5, cTrader comes as a complete package. Everything the user requires is in the platform. The platform displays all the quotes, prices and asset specification, just like MetaTrader. However, cTrader does a better job here as it allows you to create your own custom watch lists, helping you to keep track of your favourite instruments.
cTrader offers great charting and technical analysis capabilities for the majority of beginners analysing the markets. By default, there are 54 timeframes, 9 chart types, 21 drawing and annotation tools and 70 indicators.
In terms of customisation, cTrader can be customised to your preferred layout and appearance. The platform offers light and dark themes as well as providing the ability to customise chart colours. Multiple chart viewing modes, the ability to dock and undock charts for multi-screen setups makes cTrader a very flexible platform.
Moreover, those wanting to a platform for algorithmic trading, coding their own indicators, robots and scripts, then cTrader allows users to do this through their built-in programming tool – cAlgo. cAlgo uses the familiar language C# so creating custom tools is very easy.
Spotware also has a large community and online store, where traders can download indicators and custom algorithms built from thousands of developers. Spotware also provides cMirror, which is their social-copy trading service and runs of their flagship cTrader platform.
Finally, Spotware has incorporated an analyse feature into the cTrader platform. The analyse feature includes a summary of your account, including profit factor, sharp and sortino ratio, performance statistics including trading volume, winners, losses and a complete trading summary which include over a dozen statistics. This allows traders to understand the performance of their trading, how well they manage risk and where they could improve.
cTrader still comes along with some negatives. One of the major downsides is the lack of broker support. Even though it has grown significantly over the years, there is still only a handful of UK brokers providing cTrader as a platform.
Another problem is the small number of drawing tools compared to the MetaTrader platforms. Drawing tools are limited and after several updates, Spotware have failed to add more tools to their platform. Another downside is the platform does not provide any type of fundamental analysis capability, a downside for those wanting to monitor global macro/micro data.
cTrader is a professional trading platform for beginners. It has a modern design, is professionally setup up and provides a variety of tools for successful trading and investing. Everything is built into one platform so navigation between different products is seamless. The platform also provides Depth of Market and Level II pricing so you are sure to receive great market prices. However, due to a small number of support from brokers, it may be hard to find the cTrader you require.
Overall, a beginner should definitely look into both MetaTrader’s MT4 and Spotware’s cTrader platforms. They are both unique in their own way and one should test out both before choosing a platform. There is no real answer to which platform better. It depends on the individuals circumstances and what they are looking to do on the market.