This is the first in a 5-part series on MetaQuotes upcoming release of the MetaTrader 5 trading platform.  The new MT5 platform is not an upgrade of MT4 but rather an entirely new client terminal, written from scratch.  As I wrote in a previous Forex Magnates post, MT5 will feature:

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

• 5 order types and 4 execution modes available for trading
• Implements practically any trading strategies
• Built-in reports on all trading activities
• Built-in indicators and graphical objects
• Allows quicker analysis of quotes and trade decision making
• 3 chart-types, 21 timeframes and over 70 analytical tools
• High performance and outstanding speed
• Strategy tester MetaTrader 5

This week I will try to give some insight into what these features really are and how they might impact your trading.

Up first, the new Depth of Market (DOM) feature. What DOM affords a stock trader is a view of current market activity for a particular stock.  Market depth information is generally not available for retail Forex traders because their is no central exchange from which to derive the data.  The best a Forex broker can do is provide a mechanism to show a consolidated view of available orders from their liquidity providers. A small broker, for example, with only one liquidity provider is more restricted in what they can offer a trader.  Since their pool of orders is smaller, the trader may not get an order filled at the price requested.  A broker with more liquidity providers will have a larger pool of orders from which to match a trader’s order and trading generally runs smoother.  Fewer requotes and less slippage.

Tradeview Forex’s Platinum trading platform offers DOM information, but market depth data has been generally unavailable to retail traders up to this point.  MT5 will change all that.  Here’s an example of how it might help you as a retail trader.

Let’s say, for example, that you want to place a buy order for 1 lot EUR/USD and the market depth window on the platform indicates that, on the buy side, there are 10 lots available at 1.4000.  Knowing this information, you can feel assured that your request to trade 1 lot can be guaranteed an immediately filled at 1.4000.  There’s no requote and no slippage.  You should then see the DOM window reflect the change in buy-side order availability.  With your current MT4 broker, and no market depth information, the retail trader really has no idea of what the market conditions really are other than what is evident from analyzing the trading chart.

Access to market depth information can take a lot of anxiety out of the trading environment and potentially change a lot of traders’ strategies.

In part two, I’ll try to shed some light on MT5’s 21 timeframes and how this feature could make a big difference in your trading.