Forex Pips Machine Reviews

Public testing of the new MT5 platform began on October 12th, 2009.

MetaTrader5 is the keenly anticipated new generation of the hugely successful MetaTrader4 trading platform. MT5 isn’t just an upgrade to MT4. It’s been completely reconstructed from scratch.

Here are the claimed features of Metatrader 5.

• 3 chart-types, 21 timeframes and over 70 analytical tools.
• Five order types and four execution modes available for trading.
• Implements almost any trading methods.
• Sophisticated built-in reports on all trading activities.
• Inbuilt indicators and graphical objects permits quicker analysis of quotes and trade decision-making.
• High performance and superb speed MQL5 development environment with new IntellySence system and more advanced strategy tester.

As most of you’ll know, Metatrader four ( MT4 ) is the most generally used ‘off the shelf’ platform in the currency trading and CFD markets. It is expected therefore that when MT5 is out of beta, it too will be widely used.

Today MT4 is the dealing system of choice for just about all currency exchange EAs as well as custom indicators and scripts.

Unfortunately, the Metatrader4 language will not be compatible with MetaTrader 5 . In order to meet the incorporate the requested features and execution speed, a new object oriented programming language was developed. As a consequence, existing MT4 custom indicators and EAs ( .mq4 and .ex4 files ) won’t work with MT5 platform.

You could be thinking that any new investment in MT4 custom indicators, scripts and robots is wasted. That’s definitely not the case. MT5 is probably going to be in beta for a minimum of six more months. The current Mt5 beta doesn’t even include a method testing function. So it might be as long a year before any major MT5 androids become available.

Even when MT5 has matured into a stable trading system, the incredibly favored MT4, is still going to be supported by brokers for many years to come. If traders demand it, brokers will support it. You should expect many brokers will be supporting both platforms and there’s zilch to stop you running both MT4 and MT5 clients at the same time.

It is only a matter of time before a MT4/MT5 compatibility is developed. Most likely this will be in the form of a compatibility module or MT4 virtualization plugin for MT5. Rather than recoding every MT4 indicator and EA for MT5, it is nearly certain that some clever programmers will code a virtual MT4 plugin platform for MT5. Very like the way you can now run Windows in a virtual machine on a Linux box or Linux inside of OS X.

Once a tool is developed to convert existing Expert counsellors and indictors from MT4 to MT5, then the uptake of the MT5 platform will occur more quickly.

Here is the official statement about MQ4 and MQ5 compatibility:

‘From the start of Metatrader five development we believed that we will be able to save the compatibility. And we claimed about it many times. But the numerous traders/developers requests made us change our mind. We’ve accepted that just can’t make a new language compatible. At the same time we have made MQL5 stronger and in this fashion we gave you, traders and developers, more capabilities – that was our main goal in developing of MQL5 IDE. From one side, new language with the new abilities, and from the other side – MQL4 and MQL5 compatibility. Unfortunately, these 2 aims can’t be found at the same time.’ Interview with Metrader5 lead developer

The complaint frequently heard about MT4 is that it was built by programmers not traders. Certainly it was assembled with attention on the front end and’client side’ rather than the brokers back office side. The platform itself evolved from a price and information delivery terminal that became very popular with traders. Users then started to ask whether trading functions might be built into it. Metaquotes used the same architecture and added trading functionality to it, leading some to call MT4 a Frankenstein creation.

No Hedging and Compliance With the New NFA Rules.

Some may feel that the NFA regulated currency exchange brokers are driving the MT5 development. Others are saying the MT5 position/order management is to the advantage of the brokers not the traders. Afterall, it is the brokers who pay for the Metatrader platform.

To meet Forex industry standards, MT5 changes the entire core of position handling. From this time on MT5 traders will be in a position to keep only one position of any single trading instrument/currency pair. This reflection of orders aligns with the new FIFO ( first-in, first-out ) rule implemented by NFA as an industry standard in summer 2009.

Hedging at about that point is eliminated and so is the separate management of two different in time orders on the same currency pair. Buying and Selling the same pair ( hedging method ) will end up in nil positions being open.

For example : 9:00am Long GBP/USD one lot 1.3000, and later added 12:00pm Long GBP/USD two lots 1.3500, will be seen on Metatrader 5 account as one position’Long GBP/USD 3 lots’.

The first order to close is always the order that was initiated first, so it’ll always be the 8:00am Long position to close in our example above.

Is the FIFO and No Hedging a Show Stopper?

No individual orders listed, NO Hedging, and INCOMPATIBLE with anything MT4. Is this a step BACKWARDS?

If you like the way MT4 works for you now and or have made the move to a non NFA controlled broker then MT5 doesn’t look a really tasty prospect.

However there will be other instruments and charts accessible beyond currency exchange. Such as futures ( cfd-versions ) along with lots of option classes. Tons of opportunities for real-world hedging, ( i.e. Where the 2 instruments are not identical ) and for trading styles that are currently impossible. Such as buying options on signals, instead of just going long or short the currency pair. Or constructing foreign exchange grids with options.

Some traders have asserted that FIFO ( first order in first order out ) stops counter trend trading or joining in a quick scalp in the opposite direction when you already have an open position. It doesn’t have an affect on your net position but it does affect the way you must manage your trades.

Correlation strategies are also an obvious alternative way to hedge. Hedging a position can be accomplished by taking position in more than one linked currency pair. And in MT5 this could be extended to forex options and their underlying currencies or forex futures and their own options. Actually if you’re trading on more than one currency pair then currency correlations and their impact leverage and risk is something that needs to be well understood.

For more on currency correlations and the way to apply it to your trading technique see Correlation Trading system

For more on the Correlation Code system here Correlation Code System