Understanding the Role of C++ for Automated Trading with MetaTrader 4
Online trading has witnessed a global surge in popularity in recent years. According to a 2023 report from The Hindi Business Line, the allure of trading in equity futures and options (F&O) has attracted many retail participants despite the associated risks. In fact, 98% of retail derivative traders participated in the ultra-high-risk options segment and 11% in futures in FY22.
Experts posit that the appeal of F&O trading stems from the increase of fast mobile apps and zero brokerage among discount broking firms. As traders explored ways to optimise their trading strategies, one surprising avenue revealed itself to be understanding programming languages like C++ and their role in trading instruments like MetaTrader 4. Let’s take a closer look at how C++ shapes automated trading below.
Understanding MetaTrader 4
MetaTrader 4 is a comprehensive trading terminal that can facilitate trading on more than 200 instruments, from forex currency pairs or metals. The MetaTrader 4 download makes trading accessible to traders of all levels and backgrounds thanks to its six types of pending orders and two execution types, Instant Execution and Market Execution. Whether you’re a day trader, a swing trader, or a long-term investor, MT4 accommodates your needs with access to 30 built-in technical indicators and 23 analytical objects.
These tools help traders respond effectively to market movements. Traders can better identify potential entry and exit points and thus make more informed trading decisions. Additionally, investors can make use of MT4 features such as trailing stops and trading signals, which enhance the platform’s analytical capabilities, or 28-bit keys, which encrypt all communications between the server and the platform.
Algorithmic trading and MQL4
Besides trailing stops or 128-bit keys, one of the main features of MT4 is its usage of Expert Advisors (EAs), which can come pre-installed or be created using the MetaQuotes Language 4 (MQL4). These are trading robots that can fully automate trading and analytical operations in financial markets, allowing traders to execute strategies more efficiently.
The practice of algorithmic trading is one that has gained significant traction in recent years, and involves using computer programs to execute automatic trading strategies so that traders can take advantage of the machine’s accuracy and discipline. The benefits of this form of trading include the elimination of emotional trading decisions, round-the-clock trading, and the ability to backtest strategies on historical data, among others.
In the context of MT4, algorithmic trading is primarily facilitated through Expert Advisors (EAs). That’s because MQL4 is explicitly designed for developing trading robots and custom technical indicators. Thus, EAs in MQL4 can execute various functions, from simple tasks like placing and managing trades to complex strategies involving technical analysis and risk management. The user-friendly language’s syntax also makes it accessible to traders with varying programming experience.
C++ and its role in MQL4
Now, what is the role of C++ in the context of MT4 and automated trading? C++ is known for its efficient performance and plays a crucial role in extending the capabilities of MQL4. As a general-purpose programming language widely used in various domains, including finance and trading, C++’s high performance, high-level programming, and regular updates make it suitable for tasks that demand speed and resource efficiency.
This means traders can utilise C++ to build custom technical indicators and Expert Advisors requiring high-speed calculations or complex algorithms. This way, C++ can improve the execution speed of trading strategies.
Additionally, C++ can be used to create interfaces between MT4 and external systems, including data providers or risk management tools. This allows for a seamless integration of trading systems and real-time data. In resource-intensive scenarios, C++ can even be employed to optimise memory usage. This can improve the efficiency of trading algorithms, ensuring they run smoothly without consuming excessive system resources.
For those interested in honing their C++ skills for algorithm development, check out our C++ Question Papers. On Master Programming, we provide practice materials tailored to C++ programming for skill and efficiency improvement. With enough practice in this programming language, traders of every skill level can ensure better returns in the financial markets.
