Options trading seems extremely complex. Well, do you know what exactly options trading is? If you are looking for a simple understanding of this trading, this article is perfect for you.

What is Options Trading?

This trading gives traders the right, not the obligation, to sell or purchase a fixed security on a fixed date at a fixed price. An option is a contract that is linked to an underlying asset, such as stocks or another security. Options contracts are great for specific periods, which could be as short as a day or as long as a couple of years.

When traders purchase an option, they have the right to trade the underlying asset, but they are not restricted from doing so. If the trader decides to do so, it is called exercising the option. When traders sell an option, they must complete the contract. Selling options is where things get more complex, and traders could be at risk of losing an unlimited amount.

Understanding the Terms of Option Trading

Traders use some specific terms when discussing options trading. Below, we mentioned some key terms.

Holders and Writers

The purchaser of an option is known as the holder, while the dealer is known as the writer. For a call, the holder has permission to purchase the underlying market from the writer. For a put, the holder has permission to sell the underlying market to the writer.

Premium

Premium is the fee paid by the holder to the writer for the option contract.

Strike Price

The cost at which the holder can purchase (calls) or sell (puts) the fundamental market on the option’s expiry date.

Expiry Date

The date on which the options contract terminates is known as the expiry date.

In the Money

When the fundamental market’s price is above the strike (for a call) or below the strike (for a put), the option is known as in the money. It means that if the buyer exercised the option, they would be able to trade at a better price than the current market price is called in the money options trading.

Out of the Money

When the current market’s price is below the strike (for a call) or above the strike (for a put), the option is known as out of the money. If an option is out of the money at the expiry date, exercising the option will cause a loss.

At the Money

When the fundamental market’s price is the same as the strike price or very near to being equal to the strike, the option is called at the money in options trading.

Break-even Point

When the current market’s price is equal to an option’s strike plus premium (for a call) or strike minus premium (for a put). It means your trade is known as the break-even point. This means it is not making a profit or a loss.

Types of Options Trading

There are two main types of options, and they both allow clients to make money regardless of whether an asset goes up or down.

  1. Call Option: A call option allows the trader to purchase the fundamental stock at the strike price up until the date of the option’s expiration. When the asset cost rises, the call option increases in value, all else equal. If you are purchasing a call option, you usually predict the asset price to rise. If you are selling a call option, you are probably predicting the asset price to stay flat or decline.
  2. Put Option: A put option allows the trader to sell the fundamental asset at the strike price up until the date of the option’s expiration. When the asset price falls, the put option increases in value, all else equal. If you are purchasing a put option, you usually predict the asset price to fall. If you are selling a put option, you are probably predicting the asset price to stay flat or rise.

How Put Options Trading Works

Let’s say you just assume the shares of a particular stock are going to fall based on poor earnings data. They are currently trading at $30 per share. You buy a put option for 100 shares at a fixed price of S30 per share with a premium of $1 per share, costing you $100. Then, before the option’s date of expiration, shares fall by half to $15.

If you exercise your put option, you could sell the 100 shares at the higher $30 per share price. It means you would profit by $15 per share, less the $1 premium. It means you would get a net profit of $1,400. However, if the fundamental stock price rises and the option contract expires, you will lose your premium; that cost is $100.

How Call Options Trading Works

Instead of assuming shares of a particular stock to fall, let’s say you expect they will rise. Therefore, you buy a call option for 100 shares with a fixed price of $100 per share and a premium of $5 per share. The cost of the premium is $500. Then, before the option’s expiration date, shares gain $50 to a price per share of $150.

If you exercise your call option, any appreciation above the strike price shows your payout. So, if you purchase the 100 shares at the strike price of $100 per share, the underlying stock is now trading for $150 per share. It means you would get a profit of $50 per share for 100 shares, or $5000. Less the $5 per share premium paid to the option seller means you would net $4500. However, if the fundamental stock’s price falls and the options contract expires, you will lose your $500 premium.

Bottom Line

In this article, we have covered all the basics of what is options trading and different option terms as well as their types. Additionally, we also discuss how this trading is done, whether it is a call option or a put option. However, option trading is all about the timing of the market reaction, and that is a dangerous game to be playing with investing a couple of dollars.

MT4 – A norm for experienced foreign exchange market traders. This advanced trading platform helps to execute the trade when the system is off, with many technical indicators, charts, real-time market data, and many more.

What is MT4?

MetaTrader 4 was released in 2005 and developed by MetaQuotes Software Corp, which is an intuitive online trading platform built on the MQL4 programming language. Traders used this platform to speculate on the price of major financial markets, including forex, commodities, stocks, indices, metals, cryptocurrencies and others.

The software offers its users live prices and charts to place orders and manage their accounts. The platform provides trading tools like news feed charting tools and robots to see the real market prices and increase their profit potential.

History of MT4

In 2002, MetaQuotes Software Corp released the previous version of the MetaTrader platform. MetaTrader 4, released in 2005, was a significantly enhanced version of MetaTrader. Between 2007 and 2010, some firms added the MetaTrader 4 platform as an optional alternative to their existing trading software due to its popularity with traders.

However, the advanced version of MetaTrader 4 was introduced in 2009, known as MetaTrader 5 (MT5), built on the MQL5 programming language. According to reports, the MetaTrader 4 platform is still the most optimal choice for forex trading in the whole world in September 2019.

About MQL4

MT4 program uses trading approaches via MQL4 coded language. It lets the trader install your own EA: expert advisor, custom indicators, scripts, and even test and fine-tune their EA using the MetaTrader 4 strategy tester. Furthermore, MQL4 lets the traders analyze previously received and up-to-date quotations, track price movements via in-built technical indicators and manage and constantly monitor their trading orders.

The mobile version of MQL4 is created with all of the requirements that ensure flexibility. That is why, besides Windows and Mac PCs, the MetaTrader 4 mobile trading option allows investors to access the trading platform from their phones and tablets. Moreover, it also offers managing a trading portfolio and several trading accounts from a single interface. All these capabilities give a trader a distinct advantage in trading.

MT4 Features

Meta Trader 4 is a complete trading platform that includes all the necessary tools to trade online. However, depending on the software that you use, you can trade online with these;

Here are some other main functions of MT4;

  1. Different timeframes
  2. One-click trading
  3. EAs: Expert advisors
  4. MetaQuotes marketplaces
  5. Numerous indicators
  6. Charting tools
  7. Established own EA and indicators
  8. Multiple order types
  9. Export and import historical data
  10. Internal mail delivery
  11. Alert tools

Compatible Operating Systems

MetaTrader 4 is accessible on almost all operating systems like;

NOTE: Keep in mind that MetaTrader 4 is not an intuitive platform for Mac and Linux operating systems. However, if you want to use it on Mac and Linux Operating system then you have to apply some workaround and additional software.

MetaTrader 4 and Automatic Trading

Automatic trading is a useful tool for automatically processing trade orders with exceptionally quick response times. These automatic trading tools, known as EAs: expert advisors, it is a set of pre-determined trading rules like entry and exit point that are put by the trader using MT4 MQL programming language.

MetaTrader 4’s cutting-edge technology function has fully integrated automated trading. It lets the trader execute orders at a pace that would be unachievable with manual trading. Hence, traders save time from the routine of monitoring the trading market and execution of trade.

Another advantage of automatic trading is backtesting, which is a procedure to test trading on historical values. This process basically applies trading rules to past market data. Traders may readily analyze and fine-tune ideas on applying effective backtesting. After that, traders can employ these ideas in their own trading for better-quality consequences and to make a profit.

Pros and Cons of MetaTrader 4

Pros

  1. Customization: Traders can customize everything in their terminal. The flexibility of MQL4 and speed let the trader develop programs that are considered to be very complex tools. This platform can do complex calculations and manage EA: expert advisor and indicator parameters.
  2. Easy-to-use Interface: The design may look outdated, but it is extremely easy to use. Even for those who are not familiar with trading, the controls are simple enough to lead in seconds.
  3. Flawless Performance: The platform uses a few features from the traders’ system. It means the terminal reacts and updates the data rapidly in complex situations.

Cons

  1. Incompatible Terminals: EAs and custom indicators written on MQL4 for MT4 can’t be used on MetaTrader 5 platform. They have to code again with MQL5 from the start as it is not based on MetaTrader 4. So, transitioning from one platform to another is not really smooth.
  2. Limited Instruments: The MetaTrader 4 platform has a limited number of tools, indicators, and timeframes with particular restrictions.
  3. Confusing for Beginners: Customization functions are particularly appealing to advanced traders. At the same time, beginners may not be able to improve their trading strategy to an analogous range.

FAQs

Q: How to use MetaTrader 4?

Open your account on the broker site > install the terminal to your system > log in to your account > set navigation tolls and indicators > In the order window, open the trade > monitor and close your positions and pending orders. That’s it.

Q: Is MetaTrader 4 a good platform for trading?

Yes, MT4 is a leading trading software across forex and retail traders. It has all the functions that a trader requires.

Q: How to add an indicator in MetaTrader 4?

First of all, download the indicator in your system > open the terminal > click file > open data folder > MQL4 > open indicators folder > paste the indicator into the subfolder.

Stepping into the trading world and not familiar with MetaTrader? We are going to cover every little detail about it in this blog…

All About MetaTrader?

Meta Trader is a leading and very popular trading platform used for automated forex trading. Reputable brokers always considered it to be the first choice among most platforms. It is an online trading platform in the financial markets. MetaQuotes Language (MQL) Software developed it.

Moreover, traders and brokers widely use this platform for trading various financial instruments, including forex (foreign exchange), commodities, indices, stocks, and cryptocurrencies.

Furthermore, there are several versions of MetaTrader, with MT4 and MT5 being the most widely used.

Brief Introduction to MetaTrader 4

MT4 is a version of the MetaTrader and was developed by MetaQuotes in 2005. It is a great trading platform for forex traders and is highly customizable with the help of algorithms that enter and exit the trades according to the parameter that is set.

MT4 premium also gives you access to various range of enhancements, including all the additional indicators and access to Expert Advisors (EA). The MT4 platform offers a lot of opportunities for you to trade in the foreign exchange market. It is available on desktop, mobile, and on the web as well, making it easy for you to trade.

Brief Introduction to MetaTrader 5

MT 5 is another version of the Meta Trader, which was released in 2010, five years after the MT4, although it wasn’t very popular like it. MT5 was designed to do a better and improved job than the former version.

Meta Trader 5 offers a powerful trading system for the traders. It has an in-depth analysis of the market it also has a system of trades and orders. It has a system that supports both the accounting system, the traditional netting system, and the hedging option system.

MT5 also has four execution modes available Instant, Request, Market, and Exchange execution to meet various objectives of trading. Meta Trader supports all kinds of trade orders.

Key Features of MetaTrader:

Here are some of the key features of the most popular trading platform, MetaTrader:

MetaTrader provides the trader with advanced charting tools and technical analysis features. So, it can use a variety of indicators, graphical objects, and analytical tools to analyze price movements in the foreign exchange market and make informed trading decisions.

MetaTrader supports algorithmic trading systems through the use of Expert Advisors (EAs). So, the traders can create custom scripts, additional indicators, and automated trading strategies using the MQL4 (for MT4) or MQL5 (for MT5) programming languages.

Traders can have access to various financial markets, including forex, commodities, stocks, crypto, and indices, through MetaTrader. Now, this platform connects to different brokers, allowing users to trade a wide range of instruments.

The MetaTrader platform includes risk management tools such as stop-loss and take-profit orders, helping traders manage their positions and minimize potential losses.

MetaTrader provides the trader with real-time price quotes for financial instruments and access to financial news. Moreover, the information provided is crucial for traders to stay updated on market conditions and news events that may impact their Trading.

MetaTrader is available on various devices, including desktop computers, smartphones, and tablets. And because of this; traders are allowed to access their accounts and start trading.

Meta Trader platform has a very user-friendly interface that caters to both beginners and experienced traders. It offers customizable layouts and an easy-to-use interface that helps traders to use this platform with ease.

Difference Between MetaTrader 4 and 5

Here is the difference between the two versions of the trading platform MetaTrader:

 

MetaTrader 4

 

MetaTrader 5

 

1.       Asset Coverage

 

MT4 is designed to trade in the forex market.

 

MT5 extends beyond the forex market.

 

2.      Order Types

 

Support market and pending orders and trailing stops.

 

It introduces additional order types, such as market-depth, stop limit, and pending orders.

 

3.      Timeframes

 

MT4 offers a set of standard timeframes, such as M1, M5, M15, M30, H1, H4, D1, W1, and MN.

 

MT5 introduces additional timeframes, including M2, M3, M4, M6, M10, M12, and H2, H3, H6, H8, H12.

 

4.      Programming Languages

 

It uses MQL 4 for creating custom indicators and Expert Advisors (EA).

 

It uses MQL 5 for developing custom indicators, Expert Advisors (EA), and scripts.

 

5.      Backtesting

 

Available but with certain limitations

 

Offers more accurate backtesting capabilities.

 

6.      Hedging

 

Supports hedging traders can have both long and short positions.

 

Supports both hedging and netting systems.

 

7.      User Interface

 

Has a simpler and more familiar interface.

 

Features an enhanced and modern interface.

FAQs

Is meta trader good for day trading?

Yes, Meta Trader 5 is a good trading platform for day trading for anyone who wants to take their trading profits to the next level.

Is MT5 free or paid?

MT5 is a free platform for retail traders; however, brokers have to pay a license to use it.

Why is a meta trader best for beginners?

All the versions of the MetaTrader are user-friendly and multifunctional and allow users to customize them according to their specific needs.

Wrapping Up

MetaTrader is a great platform for Trading in the foreign exchange market. In this blog, we have mentioned everything about the platform, including the introduction of two versions of MetaTrader. Furthermore, the difference between the two versions, which can help you choose what you think is best for you and what best suits your trading style.

Are you a beginner gold forex trader? Examining the foreign exchange analysis is the best way to know the changes in gold pair prices and the forces that influence the price changes to make a profit. You can opt for the Reversedo site for price action analysis of the foreign exchange market.

How Forex Analysis of Gold Works

In the stock market, investors purchase shares of individual companies, but in forex, shares are traded in pairs. In foreign exchange trading of gold, when one pair is purchased, it means the other pair is sold. The most commonly traded gold pair in the world is XAU/USD.

In FX analysis, an individual examines the fluctuation of pair prices as probable to be stronger over a given time. And the forces that influence those changes in the prices. Traders use this knowledge to buy the gold if they expect it to rise in value or to sell it if they expect it will decline in value.

However, retail traders and financial companies are engaging in forex analysis on a daily basis to make a profit from the FX market that works 24 hours and 5 days a week.

Pro Tip: Patience, discipline, and research will set a trader apart from traders who trade on the hover without any research or analysis of numerous FX indicators.

Types of Forex Gold Analysis

Traders use the foreign exchange analysis to know the predictions for buying and selling the gold. However, for beginners, the analysis concept looks unclear, but it has three types.

1. Fundamental Analysis

Fundamental analysis works to analyze changes in the forex market coming out of countries via monitoring figures. Including unemployment rates, interest rates, GDP: gross domestic product, and other kinds of economic data.

For instance, a trader conducts the fundamental analysis of XAUUSD and gets the data on supply and demand and the interest rate of gold in the US. Traders also want to be on top of any noteworthy news releases surfacing in the US to measure the kith and kin to the health of their economy.

2. Technical Analysis

Traders can manually and automatically program the technical analysis, such as with a forex robot. In a manual system, traders analyze technical indicators and understand the data into a buy or sell decision. However, an automated trading analysis means the traders teach the software to look for certain signals and understand them before executing a buy or sell conclusion.

In technical analysis, the trader identifies the trading prospects that depend on trading price charts. Traders use these charts to know the future decisions and probable entry and exit points for each spot. You can view technical charts by logging in to the Reversedo account, which is known as a gateway to precision trading on gold.

The automated analysis leads over the manual counterpart in that it is intended to take the behavioral economics out of trading decisions. Forex system uses past price activities to know where the value of gold may be led.

3. Weekend Analysis

A weekend analysis is akin to a dress designer preparing a blueprint to make a dress to make sure a trouble-free finishing. Traders do weekend analysis for two reasons;

So, if you want to trade in the foreign exchange market without a plan, it is a bad idea to act recklessly in the FX market, as it can leave a hole in your pocket.

How to Apply Gold Analysis in the Forex Market?

Here, we have described the outline for applying gold analysis in the FX market.

Determine the Drivers

For successful foreign exchange trading, you must understand the current relationship between markets and the reason that these relationships exist. However, these relationships can change over time.

For Instance

A forex market recovery is explained as traders who anticipate a recovery in the gold pair. Traders believe that the pair will have improved earnings and, therefore, greater assessments in the future, so it is a great time to trade. However, an assumption based on flood liquidity could be driving motion, and good old greed is pushing prices upward till big traders join the party to trigger the selling.

Chart the Indexes

Charting the important indexes of markets for a longer time frame is beneficial for a trader. It helps to know the relationship between markets, whether the movement in one market is inverse or in concert with the other.

For Instance

Gold was driving records high in 2009, and it represent the perception that paper money was decreasing in value rapidly. It happened because there was a need to return to the metal or because of cheap dollars fueling a commodities boom, or maybe it happened due to both of these reasons.

Consent in Other Markets

Charting instruments on a weekly and monthly base, a trader will get an outlook on whether or not the markets are reaching a crossroads consent. It helps to enter a trade in an instrument affected by the turn.

For Instance

If the XAU/USD gold pair shows a hyped position, the Bank of the US intrudes to weaken the Dollar, and the exports are affected. However, US recovery is likely to be reduced without any failure of the USD.

Set Time for Trades

If a trader gets turning points on the longer frames and then switches to a shorter time to fine-tune the forex trade entry. In this situation, there is a higher chance of a successful trade. The first trade can be an exact double bottom, as shown on the extensive-term chart. However, if the first trade fails, then a second opportunity will frequently happen on a tieback or test of the support level.

Struggling to find out about Trading economics? We are here to help you with all the details you need to know.

Introduction to Trading Economics

The term basically refers to a website or platform that provides traders with a wide range of economic data, financial indicators, and other relevant information about the market. It is a real help for traders, investors, and analysts. This platform is valuable for making informed decisions in financial markets.

Furthermore, it provides its users with authentic and accurate information for all 196 countries, including their historical data and forecasts for economic indicators, exchange rates, commodity prices, stock market indexes, and government bond yields.

Importance of an Economic Calendar in the Trading Market

Trading economics provides the user with a real-time economic calendar. Also, this calendar is updated throughout the day. It is complete and accurate, and the calendar is available on the World Wide Web. These calendars are not third-party data providers. These facts are checked regularly for inconsistencies. Previous values are also available before an economic calendar is revised or reported accordingly.

The website has received 2 billion page views globally. Survey consensus figures display the average forecast among the group of economists, and they also provide forecasts that their analysts drive. Expectations are projected by using the propriety model.

Trading Economics API

Trading Economics API (Application Programming Interface) provides direct access to their data. It also allows the client to download millions of rows of historical data to answer all your queries about their real-time calendar and to subscribe to their updates. Furthermore, they provide several request methods to query their databases with samples available for you in different programming languages for you.

Therefore, it is the best way to export data in CSV, XML, or JSON format. The API can be used to feed a custom-developed application or a public website. You can adjust the API subscription pricing according to the features you use, your volume of requests, and the distribution you make.

How Does Trading Economics Work?

As mentioned above, the platform provides 23 million indicators for 196 countries. They also provide you with a real-time economic calendar, give historical data for many economic indicators, and it also give higher frequency data for exchange rates, stocks, bonds, and commodities.

It is a reference for economic data ranking second to none in Google for many important terms and indicators. Trading economics has well-diversified revenues, and about 40% of them come from recurring subscriptions. API sales and businesses and institutions also contribute 40%, and 20% comes from the advertisements on the site. Moreover, the net profit of this site has been positive since they opened the business, which is unlikely for many startup companies.

Key features of a Trading Economics platform Include:

  1. Economic Indicators: Displaying a variety of economic indicators such as GDP growth, inflation rates, unemployment rates, and more. These indicators are essential for understanding the overall health of an economy.
  2. Market Data: Providing real-time or delayed quotes and charts for various financial instruments such as stocks, bonds, currencies, and commodities.
  3. Historical Data: Offering historical data for economic indicators and financial instruments, allowing users to analyze trends and patterns over time.
  4. Calendar of Events: Highlighting important economic events, such as central bank meetings, economic releases, and other significant announcements that may impact financial markets.
  5. Forecasts: Some platforms may provide economic forecasts based on the analysis of historical data and current trends.
  6. News and Analysis: Offering financial news and analysis that can help users stay informed about developments in the global economy and financial markets.
  7. Customizable Alerts: Allowing users to set up alerts for specific economic indicators or market conditions to stay updated on changes that may affect their investments.
  8. Charts and Graphs: Providing interactive charts and graphs to visualize economic data and market trends.

Why Invest in Trading Economics?

Investing in trading economics will allow investors to finance the expansion of their business. It is set to raise the capital to cement our position as a reference for economic data worldwide. It improves the quality of services for their existing clients and allows them to stand them in a better position to compete for the multi-billion-dollar

Their professional terminals monopolize the market economics and financial conditions. It is an easy-to-access interface because of its vast databases. It has a powerful API and also offers affordable subscriptions to position it to benefit from a post-COVID world where there are no complicated data terminals and most people work remotely.

Other Platforms VS The Trading Economics

It’s important to note that several platforms and websites offer these services, and the features of each site may vary. Users often choose a platform based on their specific needs, preferences, and the accuracy of the data provided, and you can get that with trading economics.

Suppose you are interested in using a Trading Economics platform. In that case, it’s advisable to explore different options, considering factors such as the breadth and accuracy of data, user interface, and any additional features that may be relevant to your trading or investment strategy.

Trading Economics for Big Companies

It has solutions for individual customers and big companies across different services and industries. Beyond just being a trustworthy data source, it also has been a platform helping companies to understand and predict trends. It helps them identify opportunities and stay ahead of their competitors. These big companies include Apple, Google, Samsung, Unilever, and Mercedes.

Wrapping Up

Trading economics is a great platform for traders to determine opportunities. And see the market to know and stand out among their competitors. It is a better platform for traders and investors and offers lots of benefits and advantages to the user. It provides users with a real-time calendar, strong API, and high-frequency data for exchange rates, stocks, bonds, and commodities. Hope you find this article helpful!