MetaTrader 4™ Terms and Conditions

Content

Making a Profit

To make a profit, currency must be purchased at a low rate and sold at a higher rate or vice versa, (i.e. sold high and then bought low). The profit earned depends on the difference between the buy and sell prices.

Correctly forecast price movement trends, will result in a profit. Incorrect forecasts will result in a loss.

Even though funds are deposit in US dollars, one can sell any other currency, from the list of currency pairs, at any time. Thus one can profit when a currency’s value appreciates or when it depreciates, as long as the direction of change has been accurately predicted.

Transaction Amount, Trading Account Balance, Leverage and Risk

The amount of profit earned also depends on the amount of the transaction (i.e. the volume of currency bought or sold). The larger the amount of the transaction, the greater the profit or loss. MetaTrader 4™ measures transactions in lots, or portions thereof (one lot equals 100,000 units, and 0.1 lot equals 10,000 units, etc.).

The maximum possible transaction depends on one’s deposit (the amount of money in a given client’s MetaTrader account) and the current rate of the currency pair desired for trade. When trading in the Forex market, one can buy and sell currency amounts exceeding the account deposit total by using leverage. FOREX CLUB applies floating leverage based on the total position volume to all of its MetaTrader accounts. MetaTrader accounts with total open positions of less than $30 million carry a maximum leverage of 50:1. This means that the nominal value of a trader’s total open positions, at any given time, may be up to 50 times greater than his/her current account balance. Accounts with total open positions greater than $30 million carry a maximum leverage of 20:1. For all MetaTrader accounts, the maximum possible leverage is 50:1.

A Forex Club’s client account funds are used as the margin for one’s transactions. This margin is neither a commission, nor a transaction fee: the money still belongs to the account holder, and can be withdrawn at any time, if it is not being used to cover current open positions.

You can specify a transaction amount for the given deposit, which means you can manage your leverage and risks accordingly.

A client can specify a transaction amount for the given deposit, which means leverage and risk can be managed accordingly.

Examples of how MetaTrader floating leverage works:
1. Example #1
Buy 20 lots of USDCHF at 0.8000
Nominal value: 20 * 100,000 = USD 2,000,000
Because the nominal value of USD 2,000,000 does not exceed USD 30,000,000, the margin requirement is calculated using leverage of 50:1.
Margin: 2,000,000 units = USD 40,000 margin

2. Example #2
Sell 10 lots of EURUSD at 1.5000.
Nominal value: 10 * 100,000 * 1.5000 = USD 1,500,000

Because the nominal value of USD 1,500,000 does not exceed USD 30,000,000, the margin requirement is calculated using leverage of 50:1.

Margin: 1,500,000 units = USD 30,000 margin

Forex Club requires that a client have a deposit of a minimum of $200USD before placing a trade. We will accept funds that equal less than $200 into a client's account, but that account will not be activated until the $200 minimum is reached.

A minimum transaction is 0.01 lots (1,000 units of currency). The transactions generally take place in a timely manner, yet may fluctuate due to market conditions.

Instruments

The Forex market trades in currency pairs. When EURUSD is traded (EUR/USD, EUR) instrument, the desired amount of Euros (EUR) for US dollars (USD) is bought or sold. Traders call this type of transaction buying or selling the EUR/USD instrument. The currency that you buy or sell is referred to as the base currency.

The currency used to buy the base currency is referred to as the counter currency (or quote currency).

First Transaction

Before executing a transaction, you must decide on the following:

• Select an instrument (MetaTrader 4™ uses the term "symbol" rather than "instrument") – this is the currency pair you want to trade (such as EURUSD, if you have an opinion on how the Euro will change its relative value against the US dollar).
• Select the amount of transaction - the larger the amount, the more one can gain when the price changes, but the more one can lose, in a case where the market change opposes the opinion upon which that trade was based.
• Choose to buy or sell the given instrument (based upon movement prediction of the Euro against the US dollar).

To execute the transaction, a corresponding order must be submitted to the brokerage company. MetaTrader 4™ uses the term "order" (instead of "transaction", as in Rumus). In the Market Watch window a list of financial instruments (symbols) is visible, for which the terminal receives quotes from the server. The data in that window is presented as a table. The Symbol field shows the name of the financial instrument (symbol), the Bid and Ask fields show prices, and the Time field shows when the prices were received from the server. The Maximum and Minimum fields are calculated based on price dynamics over the course of the day. This window can be used to place market and pending orders and open new charts. Simply right click in the Market Watch window to open a context menu containing all the necessary commands. Make your choice and click Buy or Sell. The words "Order is in process" may appear briefly in the same window, followed by confirmation that your order was placed successfully. Once the order is placed, the transaction is executed at the price displayed when clicked and an open position appears on the Trade tab in the Terminal window.
 

FIFO Rule

Monitoring Open Trades and Trade Tab

A position is opened the moment a transaction is executed in MetaTrader 4™. When a client has an open position, each change in the quote for that instrument (symbol) causes a change in the value of that position (profit or loss). This is the so-called current or floating profit. Pay careful attention to how the order is displayed in the Terminal window. The Trade Tab contains information about the current status of the trading account, open positions and pending orders. Open positions can be sorted using any of the fields. The Trade tab also shows the account balance and the financial result of all open positions, followed by a list of pending orders. When a pending order is triggered, a new position opens and the pending order line is deleted and replaced by an open order line. There are several columns in the Trade tab:

• Order — Transaction ticket number, unique to a specific trade.
• Time — Time the position was opened, displayed in YYYY.MM.DD HH:MM format (year.month.day hours:minutes).
• Type — Type of transaction. Several types of transactions are possible: Buy (long position), Sell (short position), and multiple types of pending orders (Sell Stop, Sell Limit, Buy Stop, Buy Limit).
• Volume — Number of lots in the transaction. The brokerage company sets a minimum number of lots, and the maximum number of lots is determined by your account balance.
• Symbol — Name of the financial instrument in the transaction.
• Open Price — The price at which the position was opened (don’t confuse this with current price, defined below).
• S/L — Stop Loss level. If the order has not been placed, there will be a zero in this field. You can learn more about working with orders in the order section of this guide.
• T/P — Take Profit level. If the order has not been placed, there will be a zero in this field. You can learn more about working with orders in the order section of this guide.
• Current Price — The current price for the instrument (don’t confuse this with the open price, defined above).
• Commission — The commission charged by the brokerage company on trading operations.
• Swap — Displays accrued rollover fees in dollars.
• Profit — Displays the financial result of completing the transaction at the current price. A positive result indicates that the transaction is profitable, while a negative result indicates a loss.
• Comment — This column lets the client add comments to any trading transactions. Comments can only be added when a position is opened or a pending order is placed. Modifying an order or position does not allow comments to be added. The brokerage company may add comments to client trading transactions.

Closing a Position

Closing a single position
A single open position is automatically closed when the Stop Loss or Take Profit price is met.

Important: When a long position is closed, the Bid price must correspond to the Stop Loss or Take Profit level. When a short position is closed, the Ask price must correspond to one of those levels.

To close a position manually, go into the Trade tab and choose the command from the context menu for the open position (or double click on the position). It is especially important to note that FIFO rules are followed (as detailed in FIFO Rule, above)– First In, First Out. This means that whichever position was taken first for a specific currency must be closed out. Furthermore, it is impossible to hedge, or take positions in opposite directions on one trading instrument.

Important:

• The terminal draws historical charts using BID prices, but some of the prices displayed in charts may be ASK prices. To turn on the ASK price for the last bar, check the Show Ask Line option in the terminal settings.

Pip, Tick, Pip Value, and Calculating Profit.

A tick is the smallest possible change in an instrument quote. A pip is the lowest order digit in the quote. If a quote moves 1 pip, it has moved by one lowest order digit. For currency pairs, the tick is usually (but not always) equal to the pip. For pairs in which JPY (Japanese yen) is the quotation currency, one pip is equal to 0.01. For all other pairs, one pip is 0.0001. For MetaTrader accounts, all currency pairs have a floating market spread and an extra digit (either a third or fifth place after the decimal, depending on the currency pair). 

For currency pairs, the pip value is the profit you will earn if you sell an instrument at a price one pip higher than at which it was purchased. Pip value varies for different instruments and also depends on position volume.

For instruments quoted in USD (US dollar), the pip value is $1 for a position volume of 10,000.

For instruments quoted in any other currency, such as CHF (Swiss franc) or CAD (Canadian dollar), the pip value is always equal to 1 unit of the quotation currency (1 CHF, 1 CAD) for a position volume of 10,000. However, pips are always displayed immediately in US dollars (clients may choose to display profit in pips (MetaTrader uses the term “points” here), quote currency (MetaTrader uses the term “term currency” here), or deposit currency). To do so, divide 1 by the current quote for the currency pair (for example, the current USD/CHF or USD/CAD exchange rate).

For instruments quoted in GBP (British pound) or AUD (Australian dollar), the pip value is equal to $1 multiplied by the exchange rate for the quotation currency against the US dollar (for example, the GBP/USD or AUD/USD exchange rate) for a position volume of 10,000.

For instruments quoted in JPY (Japanese yen), the pip value is $100 divided by the current USD/JPY exchange rate for a position volume of 10,000.

Profit may be calculated for any position as follows:

Divide the position volume by 10,000, multiply by the pip value for a position volume of 10,000, and multiply by the difference in points between the open price and the close price for the position.

Trading Instruments and Spreads

At any given moment the price to buy an instrument is somewhat higher than the price at which you can sell it. This difference is called spread, and it is a source of profit for the brokerage company.

MetaTrader accounts have access to quotes to the fifth decimal place for more precise spreads.

Spreads are measured in pips:

Order Types

The MetaTrader 4™ client terminal prepares orders, sends them to the broker for execution and includes tools for monitoring and managing open positions. An order tells the brokerage company to execute a specific trading transaction on the client’s behalf. MetaTrader 4™ uses the following types of orders: Market order, Pending order, Stop Loss and Take Profit.

• Market order
  A market order tells the brokerage company to buy or sell a financial instrument at the current market price. Execution of a market order results in an open position. Instruments are bought at the ASK price and sold at the BID price. Stop Loss and Take Profit orders can be added to a market order (these types of orders are described below). The mode in which market orders are executed depends on the financial instrument.
• Pending order
  A pending order tells the brokerage company to buy or sell a financial instrument as soon as market price reaches a set future price. This type of order results in an open position once the market price reaches the level set in the order.
• Stop Loss
  A Stop Loss order limits losses if the price of a financial instrument begins to move into the loss area. Once the price of the instrument reaches the set level, the position closes automatically at the price at the price of the order or at the first available price if market price gets through the level of the order. This type of order is always linked to an open position or pending order and is only placed along with a market or pending order. When verifying the terms of a Stop Loss order, use the ASK price for long positions and use the BID price for short positions.
  A Trailing Stop is used to make the Stop Loss price adjust as the market price fluctuates.
• Take Profit
  A Take Profit order is used to secure profits once the price of a financial instrument reaches a set level. Execution of a Take Profit order results in the closing of the position. Take Profit orders are always linked to an open position or pending order and are only placed along with a market or pending order. When verifying the terms of a Take Profit order, use the ASK price for long positions and use the BID price for short positions.

Important:

• The execution price for all trading transactions is established by Forex Club.
• Stop Loss and Take Profit orders are only executed for open positions, not pending orders.
• Historical charts are created using only BID prices, but some of the prices displayed in charts are ASK prices. To turn on the ASK price for the last bar, check the Show Ask Line option in your terminal’s settings.

Pending Order

In order to open a position using a pending order in the MetaTrader 4™ platform, first an order must be placed. Once the current price corresponds to the pending order terms, that pending order will automatically be executed and a new position will be opened. On the Trade Tab, execution of a pending order deletes the pending order status line and creates a new open position status line. If the pending order included a Stop Loss or Take Profit order, these will automatically be linked to the newly opened position. MetaTrader 4™ uses four types of pending orders:

MetaTrader 4™ uses four types of pending orders:

1. Buy Limit — Buy when the future ASK price reaches the set value (used when the current price is higher than the order price). This type of order is usually placed on the assumption that the instrument price will rise again after declining to a certain level.
2. Buy Stop — Buy when the future ASK price reaches the set value (used when the current price is lower than the order price). This type of order is usually placed on the assumption that once the instrument price reaches a certain level it will continue to rise.
3. Sell Limit — Sell when the future BID price reaches the set value (used when the current price is lower than the order price). This type of order is usually placed on the assumption that once the instrument price reaches a certain level it will begin to fall.
4. Sell Stop — Sell when the future BID price reaches the set value (used when the current price is higher than the order price). This type of order is usually placed on the assumption that once the instrument price reaches the set value it will continue to fall.

Important: According to FIFO rule it is not possible to choose the position to be closed first. Orders must be closed in first in, first out order. If Stop Loss or Take Profit is set for one of the several positions at one currency pair, all of the positions will get the same level of Stop Loss and Take Profit.

Current Market Forecast

Stop Loss and Take Profit orders may be linked to a pending order. Once the pending order is processed, its Stop Loss and Take Profit levels are automatically linked to the open position. To place a pending order, you must open the Order Window. There are several ways to do this:

• Go to Tools – New order.
• Click the Order button on the Standard tool bar.
• Press the F9 key.
• Choose New Order from the context menu in the Market Watch window.
• Go to Terminal - Trade.
• Double click on the financial instrument in the Market Watch window.

Under Type, choose Pending Order. Then select the financial instrument (symbol), set the volume, and set the Stop Loss and Take Profit levels. Comments can also be added in the Comment field, at this time. In the Pending Order field, one must set the following:

• Type — Choose the type of pending order you want: Buy Limit, Buy Stop, Sell Limit or Sell Stop.
• At Price — Set the price level at which the order will activate.
• Expiry — Set the date and time at which the order will automatically be deleted if it has not been activated yet.

Important: An order cannot expire in less than 10 minutes!

Clicking the Place button sends the order for execution, which happens in two steps. After an order is placed, the brokerage company accepts it and a line with the pending order number and status appears on the Trade Tab. If the Show Trades option is turned on, the chart will show the pending order’s levels (including any Stop Loss and Take Profit levels). In the second step, if the prices match the order conditions, the pending order is deleted and a position is opened. The unique identifying ticket number is the same for the open position as for the pending order. These changes are displayed in the Trade Window.

Important: Stop Loss and Take Profit orders only activate for open positions, not pending orders.

Modifying Pending Orders

Traders often encounter situations in which they need to modify or delete a pending order. To do this in MetaTrader 4™, choose the command Modify or delete pending order from the pending order Context Menu or double click on the pending order line in the Trade Window. This will open the Order Management Window, where one can set a new trigger price, new Stop Loss and Take Profit levels and change the order expiry date. After making all modifications, click Modify.

Important: Setting the Stop Loss and Take Profit levels at zero is the same as turning off these functions. Once an order is successfully modified, the field values will change in the Trade window. If the Show Trades option is turned on, the chart will show the pending order’s levels (including any Stop Loss and Take Profit levels).

Deleting a Pending Order

Market changes may cause you to delete a pending order. To do this, choose the command Modify or Delete pending order from the pending order Context Menu or double click on the Pending Order line in the Trade Window. This will open the Order Management Window, where Delete can be clicked to delete the pending order. Pending orders are deleted automatically when the expiry date is reached without the price conditions being met. Once a pending order is deleted, the information will appear in the Account History Window.

How close can a Pending Order be placed?

The price indicated in the order must be at least 3 points away from the price broadcasted in the Quotation flow when the order is being placed (the minimum current Limit and Stop levels for each currency pair are listed in the Order window in the Client terminal). For BUY orders this difference is calculated based on the ASK price; for SELL orders it is based on the BID price. Limit and Stop levels go up during periods of extreme volatility and low liquidity: at night, around holidays, in advance of news, at the end of the trading day, and in other non-standard market situations.

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Trailing Stop

• A Stop Loss order limits losses if the price of a financial instrument begins to move into the loss area. When an open position becomes profitable, the Stop Loss can be moved manually to the zero-loss level. In MetaTrader 4™, Trailing Stop is a very useful tool for automating this process when there is strong price movement in one direction or when you are unable to follow the markets closely.
• A Trailing Stop is always linked to an open position and is executed in the client’s terminal, instead of on the server like a Stop Loss. To place a Trailing Stop, right click on an open position in the Terminal Window and choose the Trailing Stop command from the Context Menu. From the list that opens, choose the distance you want to set between your Stop Loss level and the current price. Only one Trailing Stop can be placed for each open position.
• Once your Trailing Stop is placed, the terminal will verify that the open position is profitable every time it receives new quotes. As soon as the profit in points becomes equal to or greater than the level you set, the terminal will issue an automatic Stop Loss order at the distance that was set from the current price. If the price moves in a profitable direction, the Trailing Stop will automatically move the Stop Loss to keep up with the price. If the position’s profitability decreases, no modification is made to the order. This mechanism automatically locks in the profit for your position. Every automatic modification to the Stop Loss order is recorded in the system log.
• A Trailing Stop order can be turned off by clicking None in the Control Menu. If Delete All Levels is selected, the Trailing Stops for all open positions and pending orders will be deleted.

Important: Trailing Stops are carried out in the MetaTrader 4™ client terminal instead of on the server (like Stop Loss or Take Profit orders). As a result, all Trailing Stops cease to function when client terminal is turned off. Only a Stop Loss order placed by a Trailing Stop will remain active when client terminal is turned off.

Modifying Positions

A current position can be modified by setting new Stop Loss or Take Profit levels. To modify a position, right click on the position and choose Modify or Delete from the Context Menu. Another option is to double click in the Terminal Window on the Stop Loss or Take Profit fields for the open position line. In the new window, set new values for Stop Loss or Take Profit and click Modify.

Enter new values in the Stop Loss or Take Profit fields to change these levels and to set an order at a certain number of the smallest increment of change in a quote (foreign currency price). For example, if the current price of the EUR/USD currency pair is 1.4181 and it changes to 1.4180 this means the price has dropped by one pip from the current price; enter the desired value in the Level field and click Copy As. If these fields are set at zero, the order will be filled with the minimum allowable deviation set by the broker.

If, after a position is modified, the Stop Loss or Take Profit levels are too close to the current price, the Modify button will be locked. When this happens, set the levels further from the current price and click Modify. The position will be modified once Forex Club establishes the new Stop Loss and Take Profit levels. On the Trade Tab, the S/L and T/P values will also change for the open position. If the Show Trades option is turned on, the positions of any modified orders will change.

Important:

• Setting the Stop Loss and Take Profit levels at zero is the same as turning off these functions.

• Trading operation as well as setting, changing and deleting the orders is possible only during working time from 00:00 GMT on Monday till 21:00 GMT on Friday. Working time can be changed because of the holidays and other events. Changes in working time are published on Website and through the notifications in terminal.

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Rollover Fee or SWAP

While trading in Forex, one doesn’t actually buy foreign exchange currency, but rather take it on credit from a brokerage firm while trusting the other currency of the pair to the company. Interest arises since each transaction is essentially a loan. Clients pay interest to the company on the currency purchased, and clients receive interest on the currency used to buy the Base Currency. Interest rates on various currencies differ; therefore the interest rate paid and the interest rate received do not cancel each other out. The difference between interest rates is called Rollover Fee and MetaTrader uses the term “Swap”. This fee depends on whether one buys or sells the instrument; it also contributes to the broker’s profit. A negative Rollover Fee is debited from the client’s account while a positive Rollover Fee is credited.

The Swap is accrued at end of each business day at 21:00 GMT. In the table, one can see the amount in dollars per lot that will be debited from or credited to the client's account at 21:00 GMT. If a position is closed before 21:00 GMT, no Rollover Fee will be charged. If position is not closed from Wednesday to Thursday the triple Rollover Fee is debited or credited.

Market Order Price Changes. Maximum Deviation

Exchange rate values on the Forex market are subject to rapid changes; sometimes they change several times a second. During market volatility, the price seen in the terminal at the time Buy or Sell was clicked may no longer be available by the time that order reaches the brokerage company’s server. In this case an Invalid Prices notice is received, listing the new prices. If the offered price is agreeable, confirm it with a click. If the broker does not accept the requested price, a Re-quote is given, meaning that the broker states the prices at which the order can be executed.

When the market is active, a trader often needs to close a transaction by all means, and in such cases it is not crucial that the price may differ by a few pips. If that is the case, a trader can set Trading Range. By setting Trading Range (MetaTrader 4™ uses the term Deviation), a trader agrees that if the price changes within the stipulated range, a transaction will be made at the new offered price.

Margin Call and Stop Out

A margin call is a safeguard to protect a trader from losing 100% of the money in the trading account.

Margin Call is a Warning from a broker that your account has slipped past the required margin in %, and that there is not enough equity (floating profits - floating losses + free margin) on the account to support your Open trades any further. (Speaking of trades, definitely only the losing trades will drag your account equity down, but even if you haven't accepted the losses yet, at some point you might run out of money, because your floating losses count).

Margin Level = Equity / Margin x 100%.

Stop Out level is also a certain margin level in %, at which a trading platform will start to automatically close trading positions (starting from the least profitable position and until the margin level requirement is met).FIFO rule should be taken into consideration when closing positons as well. 

At Forex Club Margin Call is set at 100% of margin level.

Stop Out level is set at 50% of margin level. 

When your equity slips past 100% of the margin level, you'll get a Margin Call.

When your equity slips past 50% of the margin level, you'll get a Stop Out.

Automated Trading

Developing a successful trading strategy is the best way to operate on the financial markets; however, emotional involvement can make it difficult to stick to a strategy when trading manually. Automated trading strategies remove that problem. The MetaTrader 4™ client terminal offers a wide selection of tools for developing, testing and applying automated trading strategies (expert advisors). Expert advisors don’t just provide trading alerts – they can fully manage all trading transactions in real time.

MetaTrader 4™ features a built-in programming language (MetaQuotes Language 4), MetaEditor, and a variety of tools for testing expert advisors. Use these tools to create:

• Expert Advisors — Programmed trading strategies that allow for completely automated research and trading.
• Custom Indicators — User-defined technical indicators for analyzing price dynamics.
• Scripts — Programs that run once on command.

MetaQuotes Language 4

The MetaTrader 4™ client terminal allows access to MetaQuotes Language 4 (MQL 4), the built-in language for creating automated trading strategies. Write customized expert advisors, automate the trading processes, and optimize trading strategies. MQL 4 also allows creation of custom indicators, scripts, and function libraries.

MQL 4 syntax is very similar to C, and is easy to learn and use. MQL 4 features a large number of functions for quote analysis, position management, launching technical indicators and more. Write expert advisors in MetaEditor and use the built-in MetaQuotes Language Dictionary to find descriptions for all MQL 4 constructions and functions.