The Ultimate Guide to MetaTrader 4 Forex Trading Signals
WHY SHOULD YOU READ THE ULTIMATE GUIDE TO FOREX TRADING SIGNALS IN METATRADER 4?
Traders now have more options when it comes to Forex in the form of social trading and forex signals from directly inside their MT4 trading platform. Newer traders are looking for experienced mentors with well-developed systems and proven track records to help improve their performance when trading Forex. Social technology allows traders to piggy-back on the success of others not only at a low cost, but with significantly reduced barriers to getting started compared to managed Forex accounts.
This guide will help you understand how you can take advantage of the multitude of traders and trading systems through the signal service built into your MT4 trading platform.
In this guide, you will learn the basics to get you started, the factors to consider when selecting a signal to follow, and even how to become a signal provider and earn profit when traders follow you.
Whether you are a trading pro or just getting started, this guide could help you unlock a potentially lucrative opportunity out of your MT4 trading platform.
WHAT ARE METATRADER 4 FOREX TRADING SIGNALS?
MT4 trading signals allow you to automatically follow, or copy, the trades of signal providers directly out of MT4. Signal providers are able to share their signals within the MT4 global community which has millions of users, and if anyone chooses to follow them they can earn a fee.
The signals are easy to follow because they are built directly into your MT4 account under the “signals” tab.
To switch them on, simply sign up for a MQL5 community username and enter it into your settings in your trading platform. You can check out the quick “Getting Started” video we made below.
Why Are Traders Using Social Trading Signals?
Social trading signals offer several benefits to the Forex trader.
- You don’t need to spend the time building your own strategy. Developing your own trading strategy can be a time consuming process. Instead, you can choose to follow a trader that has a similar risk profile to your own.
- You save time placing trades and monitoring the markets. In addition to not having to take the time to develop a trading strategy, you can save time by not having to follow and execute trades. Social trading is set and forget—once you choose the provider, the trades are automatically copied into your account.
- You diversify your risk. You can select multiple strategy providers so your outcome does not rely on the performance of one strategy.
- More opportunities. If you have a current strategy or Expert Advisor (“EA”) you are using, you can quickly add additional strategies to your trading mix by adding a signal.
- Save in fees. Social trading is a low-cost alternative to traditional money management. In the past, if you wanted an experienced trader to trade on your behalf, you would need to go through a hedge fund or managed account structure—with significantly higher fees.
- Low barriers to entry. You are not required to have a minimum account balance to begin social trading. In fact, anybody with access to MT4 can do it.
- No paperwork required. There is no messy or difficult paperwork to go through to get started on copying signals.
- Maintain control of your account. The account you use for social trading is in your name, so you do not need to give a power of attorney to anyone.
- You are protected. When you choose to follow a trader, you choose how much to allocate to their strategy and can place a stop-loss on your account in case they do not perform how you expect.
- Share your successful strategies! If you have a manual strategy or an EA that is performing well, you can be approved by Metaquotes to share your strategy with the millions of MT4 users around the globe. You can either share for free, or set a fee that subscribers pay if they choose to follow you.
ARE SOCIAL SIGNALS DIFFERENT TO USING AN METATRADER 4 EXPERT ADVISOR?
Social signals are an alternative to using EAs on your MT4 account. EAs are programs you can install into MT4 that automatically place trades when a condition is met, such as two moving average cross-overs. While they are incredibly useful, they can be difficult to code, and they need to be run and managed on your MT4 trading platform.
You might also find that your EA works well in historical testing, but when it is run in a live account, the performance is not as expected.
MT4 signals allow you to follow traders who are running successful EAs in their live accounts. When you choose a provider, you can see if they have been using an EA or if they have been trading manually. You can then decide to follow them and not have to worry about coding or administering the EA, like you would if you were using it directly.
SET UP IS EASY!
It is relatively easy to begin following a signal in MT4. First, you need to register for an MQL5 Community ID. This can be done on the community website. On the top right-hand side, select the “Register” option and enter your details into the form to confirm your MQL5 community password and login.
Once you have registered for a login, open your MT4 trading platform and go to “options” in the “tools” menu and enter the details into the community tab.
You can then select the “signals” tab at the bottom of your MT4 platform:
Then, either double left click on the signal you wish to subscribe to, or right click on signal in the list and select “details.” If you like the strategy (more on selecting a strategy later), select the “subscribe” button.
You will be required to agree to the strategies terms of service and enter your MQL5 community password.
Finally, configure the percentage of your account that you will dedicate to this strategy, and set up a hard-dollar stop-loss. For example, if the account balance hits a certain dollar level, you can stop the strategy from placing any further trades.
The signal will now be activated on your account!
Here is a breakdown of the steps to go through in summary form:
CHOOSING A METATRADER 4 FOREX TRADING SIGNAL PROVIDER
When you select a signal provider, there are a few things you can do to tip the scales in your favour.
First look for a smooth equity curve. You want the percentage growth graph to be generally trending upwards over time. Like this:
And not like this:
Additionally, you will want to look for a provider with the following characteristics:
- They are using a “real account.” Preferably, the signal provider will be using a real account rather than a demo account.
- The more trades, the better. Wait for signal providers to have performed 100 trades or more.
- Limited drawdown. Look for providers with a drawdown of 30% or less.
- Steady growth. If the growth is too fast, the provider may be trading in a high-risk manner.
- Paid version. You may find that paid signals are more reliable over the long run.
Finally, you will want to read the signal provider’s profile to discern if they seem professional.
To help you quickly find a likely provider, you can use the filter function. Click on one of the following headings by which to filter signals.
When you first subscribe to a signal, you have the ability to set rules that allow you to manage the risk on the trade. You can choose how much of your account to dedicate to the signal, as well as set a dollar-amount stop-loss on the account.
For budding social traders, one of the best things you could do is manage the signal like you would an individual trade. For an individual trade you would have a stop-loss, as well as only allocate a portion of your account to the position. The exact calculation of your position size is a little complicated, so you can find the calculation on this page.
You could also have an Exit Strategy. Define rules for when you will stop following the provider. For example, you could reduce the amount you allocate to the signal by half if it grows by 100%, or exit from the strategy if it loses 20% from its high (as a form of trailing-stop).
In summary as an idea:
- You could put a stop on the account.
- You could keep your position size small.
- You may want to have an exit strategy in place.
HOW MQL CREDIT WORKS
To subscribe to some signal providers, you will need to pay with MQL5 Credit. Signal providers charge anything from nothing to thousands of credits per month. Credit is purchased under your profile in the MQL5 “Community” tab. Once you go to www.mql5.com and log in, you will see a “payments” tab on the left-hand side. You can then deposit via credit card, PayPal or through a variety of alternative payment systems. You receive roughly one credit per US dollar depending on the payment method (the exact amount is listed when you go to make the payment). Once you have credit in your account, you can select to follow the paid signal providers from inside your MT4 account.
MONITORING YOUR FOREX TRADING SIGNALS
There are a variety of methods of tracking your signals. You can monitor them directly from your trading platform, via the MQL5 community website, or you can track trades that are executed in your account via email.
Alternatively, if you have an iOS (iPhone, iPad, etc) or an android device, you could choose to receive push notifications when trades are executed directly to your device. To do this you will need to establish a MetaQuotes ID. You can learn how to do this here.
Sometimes the performance of the signal provider will be different to the performance of the signal on your account.
This is typically due to a discrepancy in the spreads and order execution between the broker you are trading with and the signal provider’s broker. You will tend to notice this particularly if the signal is trading on less popular currency pairs where the cost of trading varies greatly between brokers.
It is not possible to disable trading on certain currency pairs, and wide spreads could cause a strategy that is performing well on the provider’s account to be a losing strategy your account. You may find it useful to work with a Forex broker, such as AxiTrader, which has spreads on FX cross rates similar to the spreads on the major FX pairs.
CHANGING FOREX TRADING SIGNAL PROVIDERS
When you stop following a provider, MT4 will ask you if you want to manually close any existing trades, or if you wish to synchronise your positions with the new provider. MT4 will then automatically open and close trades to align your account with the current trades in new provider’s account. This synchronisation will only occur if the signal does not have a floating profit and loss. You will be alerted if this is the case and given the opportunity to wait for a better market conditions, or you could choose to ignore the warning and synchronise anyway.
FOLLOWING MORE THAN ONE METATRADER 4 FOREX TRADING SIGNAL
You can only choose to follow one signal provider at a time in a single account. It is also not recommended that you place manual trades in the account you have the signal activated on. Both of these actions would cause errors when your account is synchronised with the provider’s account.
If you wish to trade multiple strategies or continue to manually trade, you can set up additional sub-accounts with your broker.
It is worth noting that you can view and manage signals from the MQL5 community website. You can adjust your settings, as well as view in-depth statistics on signal providers. If you are a signal provider, the website is where you set up your signals profile. Go to www.mql5.com to sign in.
ADVANTAGES OF MT4 FOREX TRADING SIGNALS OVER OTHER SERVICES
MT4 is not the only social signal provider that traders can choose to follow, but you will experience several benefits by using the MT4 service.
- There is no need to change brokers.The signals are right there in your existing MT4 account.
- You have the same spread as your normal account.Other signal providers charge you by widening the spread. Not only does this cost you more per trade, but you will have less winning trades over the long term than if you had a tighter spread. (A wider spreads mean your stops get hit earlier and your limits get hit later).
- You have access to the MT4 Community.There are millions of MT4 users around the globe. You can tap into the massive existing MT4 base of traders and expert advisors.
WHY SHOULD I BECOME A FOREX TRADING SIGNAL PROVIDER?
Becoming a signal provider is a great way for traders who are running successful strategies or EAs to generate extra revenue from their trading. As a signal provider, you earn 80% of the fee you charge subscribers, with MetaQuotes taking a 20% commission.
For a step-by-step guide to establishing yourself as a signal provider, go here.
Here is a brief summary:
- Set up MQL5 ID.
- Go to the “signals” section and register as a signal provider.
- Enter your details.
- Add a strategy description.
- Register as a seller on the “profile” tab in the MQL5 Community.
- View your strategy in the strategy list on MT4.
- Place 5 trades with less than a 70% drawdown in the first 30 days.
- Set up the fee you will charge.
DECIDING WHAT FEE TO CHARGE
You are free to set your own price to charge traders that choose to follow your signal. You could charge anything from USD20 to thousands of dollars a month. Don’t automatically assume that if you have a high performing strategy you should charge more, though. One of the advantages of MT4 signals is the vast number of MT4 platform users across the globe. If you set your fee at a level that is accessible to the majority of MT4 users, you might find you end up earning more than if you charge a fee that is out of reach for most people.img
ADVERTISING YOUR FOREX TRADING SIGNAL
You can encourage MQL5 community members to advertise your signal. When a member shares your signal via a web link, they receive a fee for any subscribers that join via the link. The web link is the “share” link on your signal listing in the MQL5 community.
The maximum fee that you offer a community member is 50%. You set this up under the “my signals” tab in the “signals” section of the MQL5 community website.
TIPS FOR MAKING THE MOST OUT OF YOUR SIGNAL PROVIDER PROFILE
As a signal provider, you will want to create a professional profile for users to view. This will give a subscriber confidence when they are deciding if they want to follow you.
You can outline how you make decision, how your EA works, or how you manage risk. You could also provide a short biography with a link to your personal website or social media profile. If people can get to know you, they are more likely to follow you.
You could use Google translator to convert your description into English, Chinese, and Russian here. This broadens your potential market by thousands of traders. There are tabs on your signals profile in the MQL5 community where you can add profiles in these languages.
The important aspects of your profile, aside from the performance of your strategy, are:
- The length of time you have traded the account. Longer is usually better.
- The amount of trades you have placed. You want at least 100 trades to be perceived as having an edge over the markets.
- Whether you have a real or a demo account. Real accounts will have a lot more followers.
- The amount of real money you are using to trade the strategy.
- The size of any drawdown. Try to keep it below 30%.
Finally, if you want users to share your signal and earn a fee, you could simply encourage them to do so.
FOLLOW SIGNAL PROVIDERS TODAY!
MT4 signals are a great service for traders who are looking to diversify with a variety of strategies. You avoid needing to execute trades yourself and managing EAs. Additionally, they are an excellent tool for traders with an already successful strategy.
AxiTrader has tight spreads across the cross-rates (less popular currency pairs – often used by more experienced traders) as well as the majors, and has technology set up specifically to support high frequency traders and signal providers. This means that you will tend to experience the same, or better, performance as the signal you are copying. Also, if you are a signal provider AxiTrader has have the capacity to support your EA, even if it is trading rapidly (scalping).