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  • #201
  • Oct 20, 2009 8:27am Oct 20, 2009 8:27am
This is how trading is done. Whether its in futures, equitites, etc.

You look at your overall exposure and manage your position. There is nothing stopping you from taking advantage of short term trends while managing your overall positions.

MT4 is more like a video game than actual trading platform. Before MT4 there weren't things like the "hedging" phenomenom (which isn't hedging at all), etc.
  • #202
  • Oct 20, 2009 9:04am Oct 20, 2009 9:04am
Quoting KarateMan
You look at your overall exposure and manage your position. There is nothing stopping you from taking advantage of short term trends while managing your overall positions.
At the end of the "game", in the previous post the overall position is different as a direct result of an MT5 brokers one position only system. Now if you were able to manage the short term position more carefully, yes there is nothing stopping you from breaking the sell trade and entering the second buy trade at a point before 3A in the diagram 2 posts above.

However that is the point, managing the short term positions more carefully in a 24 hour market is next to impossible. Hence this forex market cannot really be fairly compared to other markets as to what is allowed or normal.

In addition to this, other markets have different types of options as a standard practice and effectively allow for hedging on an individual item. Spot forex is effectively its own market, and using genuine hedging practices like companies do, is really out of the reach of a sole trader in the spot forex market.

With this multi-position function enabled with MT4 brokers and now eliminated with MT5 brokers, this CAN and probably will affect some traders profitability. Why would people want to downgrade to be with an MT5 broker? It looks prettier but it is still a downgrade for potential profitability.

Here is a MT4 broker list without MT5 brokers.
  • #203
  • Oct 20, 2009 10:43am Oct 20, 2009 10:43am
  •  onu
  • | Joined Feb 2006 | Status: superior senior member | 746 Posts
"MT4 is more like a video game than actual trading platform. Before MT4 there weren't things like the "hedging" phenomenom (which isn't hedging at all), etc."

nonsense
  • #204
  • Oct 20, 2009 5:33pm Oct 20, 2009 5:33pm
Quoting KarateMan
This is how trading is done. Whether its in futures, equitites, etc.

You look at your overall exposure and manage your position. There is nothing stopping you from taking advantage of short term trends while managing your overall positions.

MT4 is more like a video game than actual trading platform. Before MT4 there weren't things like the "hedging" phenomenom (which isn't hedging at all), etc.

Absolutely crazy statement !!

Ever traded options before? I guess not.....
Luck is where preparation meets opportunity.......
  • #205
  • Oct 20, 2009 5:53pm Oct 20, 2009 5:53pm
I have very little experience with these retail platforms - willing to test out a few to see how they tick. Any ideas? As an aside, I worked for a US bank on their trading floor - so I'm not super duper familiar with retail trading platforms. I worked with one, spread based - simple to use, not great charting - not horrible either. Want to move to ECN and figure out the fuss over MT4. Thanking you in advance for your input.

Alex
  • #206
  • Oct 20, 2009 6:41pm Oct 20, 2009 6:41pm
Quoting Alex-the-Gr8
Want to move to ECN and figure out the fuss over MT4. Thanking you in advance for your input.
Here is an MT4 Brokers List free of any MT5 brokers. MBTrading, Nordmarkets and the The Collective FX are supposably ECN.

There are others but never checked them out. AxisODL claimed to have an ECN feed available upon request.

Also NDD brokers can be very effective as well. FXCM, gomarkets are NDD.
  • #207
  • Oct 25, 2009 8:56pm Oct 25, 2009 8:56pm
Here is an interesting point, written by scattergood

Quoting scattergood
After playing with the MT5 beta for a few days, and reading the comments here and at other forums, the issues / complaints seem to be along two lines:

1) The No Hedging / FIFO rule the NFA has created and that MT5 explicitly enforces is a pile of cr-p.

2) The change in MQL5 from MQL4 and the incompatibility of the two is double cr-p.

Let me say, I agree with both points and state what I think the reasons that they have gone this direction.

A) As to the Hedging / FIFO rule, what people don't usually think about is that stocks, options, and...
You can find this on this link on post 26.

It really does show that MT5 are doing this to make more money for themselves and not looking after forex traders.

Here is an Forex Brokers with MT4 Platform List / MT5 Broker Free List. If you have a broker that you can add to the list, then just post here with the country they are based out of.
  • #208
  • Oct 26, 2009 4:05am Oct 26, 2009 4:05am
aquaart, I hate to sound rude or impolite, but your basic premise is incorrect in this thread. I am not going to protect MT5 position model (nothing to protect yet, as it's still in beta), but your statement that with MT5 model you have to pay more spread/commission than in MT4 to perform the same trade is wrong.

You make a mistake by saying that in MT4 it was 2 trades and in MT5 it's 3 trades. The fact is that in both systems it's 4 trades: 1 to open Long, 1 to close Long, 1 to open Short and 1 to close Short.

Let's look at a very simple example that would describe what happens in the charts that you added in the 2nd post:

MT4:
1. We open a "long-term" Long position of 1 lot at price 1.00.
2. At price level 2.00 we decide that a short-term correction may take place.
3. We open a "short-term" Short position of 1 lot at price 2.00 with a target at 1.50.
4. At 1.50 our Short position is closed. We get 50 pips of profit from it and it's one full position that consists of 2 trades/deals (a full spread paid to a Forex broker per such full position).
5. The price eventually reaches 3.00 level and we close our Long position for 200 pips profit. That's the second full position that consisted of 2 trades/deals (a second full spread is paid to our Forex broker).
6. In total we get 250 pips of profit from two closed positions, making 4 trades/deals it total.

MT5:
1. We open a "long-term" Long position of 1 lot at price 1.00.
2. At price level 2.00 we decide that a short-term correction may take place.
3. We send a Sell order of 1 lot, which closes our Long position at 2.00 with 100 pips profit. That means that we close one full position, which consisted of 2 trades/deals (1 full spread is paid to the broker).
4. At 1.50 position (the point where we closed our Short position with profit in MT4) we re-enter a "long-term" Long position of 1 lot.
5. The price eventually reaches 3.00 level and we close our Long position for 150 pips profit (3.00 - 1.50). That's the second full position that consisted of 2 trades/deals (a second full spread is paid to our Forex broker).
6. In total we get the same 250 pips of profit from two closed positions, making 4 trades/deals in total.


Conclusion
As you can see, the difference is only in the time of the position being open in the market. We pay the same 2 "full spreads" to our broker and get the same profit from those positions. Yes, the new model looks quite weird, because we actually weren't in the market during our Short period in MT5, but we profited from it by closing our Long position.

Please, explain if I somehow misunderstood your point, or made some logical mistake in my explanation.
  • #209
  • Edited 6:42am Oct 26, 2009 5:33am | Edited 6:42am
Quoting enivid
Please, explain if I somehow misunderstood your point, or made some logical mistake in my explanation.
Yes,
You missed the short counter trend sell trade to open the sell position, in your MT5 explanation that you gave.

Also it is not about achieving the same result. Its about being in the long term trade and being allowed to trade how you want and when you want without losing profitability. (Short term counter trendy case)

So In the Profit Scenario That You Go Through
Yes, you will notice that when you entered the sell position in the MT5 version, you closed the buy trade (by selling the 1 lot) and opened a SELL trade with another one lot. This is the trade (double trade) that you missed.

In other words you had to pay the spread on 1 lot closing AND 1 lot opening in your MT5 trading. (In MT4 this does not occur). Therefore the broker is making less money out of you in MT4 than they will be in MT5.

The same occurs when you close the short term sell, you would place a buy limit to close the sell trade, then place a second buy limit to re-open the trade. Remember spread hides the commission you are really paying.


In the losing scenario.



However where the extra lies is when that short term counter trend trade actually does not work.
  • #210
  • Oct 26, 2009 6:59am Oct 26, 2009 6:59am
Quoting aquaart
The creators of MT5 have elminated the capability for a trader to complete a small counter trend trade, unless you are willing to pay another spread to re-join the longer term trade you were in.
This is not true! you can scale out and in again just the amount you need for your counter trend trade and by doing so you pay only the spread for the counter trend trade. If you don't understand this simple math then you shouldn't mess around with forex trading at all. Do something else instead.
  • #211
  • Oct 26, 2009 7:24am Oct 26, 2009 7:24am
Quoting 7bit
This is not true! you can scale out and in again just the amount you need for your counter trend trade and by doing so you pay only the spread for the counter trend trade. If you don't understand this simple math then you shouldn't mess around with forex trading at all. Do something else instead.
Firstly, the conditions are...

You want to take the counter trend trade, BUT also remain in the long term trending trade. IF that is the case you are flat out in the wrong...
In that scenario, you will pay for three opening trades and three closing trades in MT5, in MT4 this is regularly done in two opening trades with two closing trades.

And by the way that you are saying scale in and scale out, I would suggest that the above is the case.

LOL
Second, I am a Math teacher....
I have been a successful Math teacher for over 8 years in 3 private schools, private schools get the best marks in Australia. Australia is ranked number three in the world for their overall mathematics skills. Do you really think I will have the Math wrong here? By the way, the two nations that beat us are Taiwan and Japan.

Thirdly
I am now qualifying myself for financial advice specialising in foreign exchange.

Fourthly
I have recently been approached by foreign exchange firms to do some analysis for them, because of what they have seen in these forums. They have specifcally asked for me not to promote or demote. Hence no names allowed.

Do you really think they would have asked me if I was getting the basic things wrong?

Simply put you are wrong, unless you are using different conditions. It is all based on the conditions.
  • #212
  • Oct 26, 2009 10:21am Oct 26, 2009 10:21am
Quoting aquaart
Yes,
You missed the short counter trend sell trade to open the sell position, in your MT5 explanation that you gave.
Sorry, but I didn't miss it. We made a sell trade but it didn't open a sell position. It closed a long position (which is virtually the same as leaving the long and open the short in MT4). If we'd opened a sell position. The result would be completely different. And the total resulting profit would also have been 50 pips higher.

Quoting aquaart
Also it is not about achieving the same result. Its about being in the long term trade and being allowed to trade how you want and when you want without losing profitability. (Short term counter trendy case)
The profitability isn't lost. In fact, the double-swap losing factor is removed in MT5. But I can agree that the form of the trading is so different from MT4 that it looks very strange to some traders.

Quoting aquaart
So In the Profit Scenario That You Go Through
Yes, you will notice that when you entered the sell position in the MT5 version, you closed the buy trade (by selling the 1 lot) and opened a SELL trade with another one lot. This is the trade (double trade) that you missed.
As I have already stated above, it's not necessary to open another SELL position after you closed your BUY position with a SHORT trade. If you are to open a SELL position after that, that would be completely different trading scenario with additional spread and additional profit compared to MT4.

Quoting aquaart
In other words you had to pay the spread on 1 lot closing AND 1 lot opening in your MT5 trading. (In MT4 this does not occur). Therefore the broker is making less money out of you in MT4 than they will be in MT5.
Actually in all trading platforms (including MT4 and MT5) spread is counted as paid only when the position is closed (fully or partially). In case of MT4, we open 2 positions and close 2 positions and in case of MT5 we open 2 positions and close 2 positions.

Quoting aquaart
The same occurs when you close the short term sell, you would place a buy limit to close the sell trade, then place a second buy limit to re-open the trade. Remember spread hides the commission you are really paying.
That's quite irrelevant to the given example as 1) we don't open SELL position and 2) pending orders don't affect the resulting spreads paid - only the amount of closed positions matter.

Quoting aquaart
In the losing scenario.

However where the extra lies is when that short term counter trend trade actually does not work.
Please, explain more, because I don't seem to understand what do you mean by the two quoted sentences.
  • #213
  • Oct 26, 2009 10:25am Oct 26, 2009 10:25am
Quoting aquaart
You want to take the counter trend trade, BUT also remain in the long term trending trade. IF that is the case you are flat out in the wrong...
In that case the same result is achieved by closing the long position with short trade and then re-opening it with the long trade.

Quoting aquaart
In that scenario, you will pay for three opening trades and three closing trades in MT5, in MT4 this is regularly done in two opening trades with two closing trades.
Actually in MT5 that's achieved with 2 opened/closed position and 4 trades, the same as in MT4. Please, re-read the example from my first post here.
  • #214
  • Oct 26, 2009 11:04pm Oct 26, 2009 11:04pm
Since many of us trade multiple different manual and/or automatic strategies on the same currency, can anyone explain how this will work in MT5? It sounds like we would have to have multiple MT5 accounts, one for every strategy or method! How stupid is that? Then we are still taking basically the same trades we would have on MT4, only now we have to open, setup, and manage multiple accounts. For some this could be quite a few...
  • #215
  • Oct 27, 2009 1:51am Oct 27, 2009 1:51am
Funny how Metaquots is getting all you traders to help build “beta” a system that will eventually be used to steal from the very ones that helped them Bata.

I good luck with that, I wouldn’t install that Trojanhorse o my worse enemy’s pc.
  • #216
  • Oct 27, 2009 2:20am Oct 27, 2009 2:20am
Quoting compujock
Since many of us trade multiple different manual and/or automatic strategies on the same currency, can anyone explain how this will work in MT5? It sounds like we would have to have multiple MT5 accounts, one for every strategy or method! How stupid is that? Then we are still taking basically the same trades we would have on MT4, only now we have to open, setup, and manage multiple accounts. For some this could be quite a few...
Yes, with the current state of affairs it looks like with MT5 we'll have to use different accounts for different EAs/Strategies in case they don't use different currency pairs. But I hope it will change somehow in the future releases of MT5.
  • #217
  • Oct 27, 2009 2:22am Oct 27, 2009 2:22am
Quoting Tom_C
Funny how Metaquots is getting all you traders to help build “beta” a system that will eventually be used to steal from the very ones that helped them Bata.

I good luck with that, I wouldn’t install that Trojanhorse o my worse enemy’s pc.
Actually the purpose of Beta testing is to find and fix the disadvantages of the platform. If you don't like something about MT5 you can submit your suggestion to MetaQuotes. Being paranoid about it is rather fruitless behavior, in my opinion.
  • #218
  • Edited 10:59am Oct 27, 2009 7:36am | Edited 10:59am
Quoting aquaart
I am a Math teacher....
You are a math teacher? Then take this:

We assume two trades A and B with lot sizes a and b and constant spread s
Trade A is a longer term trend trade and trade B is a short term counter trend trade, opened after A is opened and closed before A is closed.

Spread cost per trade is lotsize times spread.

in the Case of MT4 we arrive at a spread cost for the two trades of

cost = as + bs

in the case of MT5 we have 3 cases:

Case 1: a = b

Trades are equal. We have to close Trade A completely and reopen it with the same lotsize, thus we calculate our spread cost as

cost = 2as
= as + as
= as + bs ; because of a = b

Case 2: a > b

We have to close out only a part of a and reopen it, the other part will only be traded once. the part that is not closed until the end is a-b, the part that is closed and reopened, thus traded twice is b. So our cost is calculated as follows:

cost = (a-b)s + 2bs
= as - bs + 2bs
= as + bs

Case 3: a < b

We have to close and reopen all of a and trade the remaining part of b counter trend, thus a is traded twice and b-a is traded once. Our cost is as follows:

cost = 2as + (b-a)s
= 2as + bs -as
= as + bs

Quod erat demonstrandum!
  • #219
  • Oct 27, 2009 7:58am Oct 27, 2009 7:58am
You seem to be assuming that closing a Buy trade with a SELL Limit trade is the same as taking a counter trend trade which really to play the semantics with words a "position". (This is an understandable mistake in terminology, as each opening trade in MT4 was also opening a separate position.) Hence the semantics with words on trade and position in the last few posts.

But taking the counter trend positon (formally an opening trade in MT4)and closing a Buy trade with a sell limit are not the same thing which is what your previous posts assume. Placing a SELL Limit exit trade is simply a trade that can close your buy position.

So back to the original point...

This means that in MT5 because you must close your buy position (formally a buy trade in MT4) with a SELL limit exit trade, then placing a second SELL Limit entry trade or place a larger volume SELL trade (to begin with) is required to enter a SELL position. (Hope you are happy that I have now used the specific terminology that you have been looking for.)


This is how the broker will make larger commission if you want to remain in the overall long term BUY position but in the middle take a short term counter trend SELL position.

So yes technically you can get away with 4 trades, but with two of larger volume (which means greater commission), which leads back to my original point.

You cannot take a counter trend SELL POSITION (in MT5) unless you are willing to pay greater commission (which can be built into the lots you pay per spread), or pay with two spearate lots of spread.

Spread or commission go up in MT5 with the above case.


Quoting enivid
In that case the same result is achieved by closing the long position with short trade and then re-opening it with the long trade.
Which then goes to trend trading, avoiding the intraday counter trend trade. And works in what would have been a profitable sell position scenario.

However if the prediction is wrong about the BUY Limit re-entry for the long term position, then this will head toward the same result as the losing counter trend position. This is what I point out in post 200, where the purple * you would lose pips instead of being neutral for pips. Except in the MT5 section technically you should often replace trade with the word position (unlike with MT4 where every opening trade held its own position).
  • #220
  • Oct 27, 2009 9:05am Oct 27, 2009 9:05am
Quoting aquaart
You seem to be assuming that closing a Buy trade with a SELL Limit trade is the same as taking a counter trend trade
It is the same.

Try to prove post #218 wrong! And do it formally, not by confusing your readers and yourself by bombarding them with misinterpretations of unclear and misunderstood terminology. You want to be a mathematician, so prove your point like a mathematician. Clearly point out the error in post #218 and use math for your proof and write it down in the language of math and not with thousand overblown words that only hide the complete absence of any meaningful content.
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