Introduction to Meta Trader 5
MetaQuote developed Meta Trader 4, in 2005. MetaQuote the developer is a Russian financial software market frontrunner and is committed to only forex-related trading. Meta Trader 5 is the newer and improved version of Meta Trader 4 (MT4).
Meta Trader 5, popularly known as MT5 is presently the most popular forex (foreign exchange) trading platform used all over the world. Most traders prefer conducting forex transactions on the MT5 platform because they trust its security. MT5 has better analysing tools, more advanced graphics, dedicated indicators, an integrated basic calendar, a black box for programming, etc. All of these make trader’s operation easy.
This platform became the most popular forex trading platform because the traders can perform highly customized operations and the platform supports automatic execution of trade using algorithms. The programing language is MQL5, there are approximately 38 indicators and 68 analysing tools.
However many users of this platform reported they have been scammed on MT5 and suffered considerable losses. MT5 itself is not a fraud in itself as it is only a bridge to place orders and receive quotes during the trading process. Many brokers use MT5 as a platform it is relatively cheaper to build a platform from scratch. It reduces brokers operating costs. The platform is complete in all senses as it allows users to carry out data retesting.
It is the brokers who scam traders using the MT5 platform and cause Metatrader5 Scams
The most common MT5 scam methods committed by brokers are described as under :
- Brokers attract clients in the name of MT5.
Many illegal and scam brokers are conducting fake promotion of MT5. You may encounter the customer service agent with the nickname “Metatrader 5” to open your account and recommend trading with a fake forex broker. The nickname may sound too similar to MT5 like MateTrader5 or MetoTrader5 or Metatraders5 or something like that. - Over exaggerated expert advice of automatic trading returns.
Expert advice is one of the features of the Meta Trader family. A program that obeys and fulfills the investor’s judgment, logic, and algorithms automatically while placing an order when these conditions are fulfilled. These programs execute orders very fast and are quick to respond to trends and price changes. Illegal brokers exaggerated these features, fabricating them to be of very low risk and very high speed of execution. The brokers deceive investors in name of expert advice and they experience refutation. - You cannot withdraw money from MT5.
Unregulated brokers who use MT5, after getting a “lease” from Meta Trade refuse investors to withdraw funds just to scam them and shift their responsibility completely to MT5. MT5 is just a trading intermediary. Many brokerages have a slow and complicated withdrawal process. If you cannot withdraw funds, you must question the brokerage firm that opened your account. - Pirated/cloned MT5 platforms.
MT5 has an open application-programming interface (API). Illegal brokers develop their own pirated versions of MT5 software. The control of this pirated version is complete with the developer. Hence, spreads and specific quotes differ from the real data. In a pirated version the transaction is unstable and they get frequently disconnected. The trader cannot set a stop loss point and cannot close his position. This occasional malfunction can make a significant financial loss. Many famous brokers’ sites are cloned. These cloned websites look virtually like the original with a minor difference. Investors fall into this trap by clicking links on social media or in emails they receive.
How to check whether a Metatrader5 platform/brokerage is a scam?
- Check if there is any difference between the registered and website address.
If the registered and actual web addresses do not match, it is a red flag. You can directly enquire about the website’s functional variable name information. The fraudulent website might be newly registered but they claim that they have years and years of experience in the forex market. - Check for the scope of regulation and the regulatory authority that provided regulation.
Many regulators provide regulation. Check if the regulation license is from known regulators like ASIC, FCA, SEC, NFA, CySEC, FINMA, etc. Scam brokerage firms get regulations from weak regulators which is equivalent to no regulation. Many a time, they ask for different regulations and operate for some other services. - Authenticate the financial regulatory license.
Meta Trade does not verify, whether the firm that is purchasing its product has a financial license or not. Many-a-times scam brokerage firms claim to hold the license, but it is in someone’s else name. Better to verify actual information from the regulator’s official website. - Read the about us page carefully.
Many a time the company does not disclose any information about the company, its important stakeholders, or anything about employees and their profiles. Reading about the company gives you a clue about the persons involved with the brokerage house and with whom you are dealing. - Read reviews of that company.
You can get reviews and opinions of the traders on various sites, social media, and forums. Many a time the scammers or their staff publish their positive reviews to attract investors/traders’ attention. Note the script/comments; narration of it will sound repetitive. - Avoid pitfalls.
You can avoid those brokerages houses/platforms who advise increasing position size, holding trades for long periods, and avoiding scalping strategies if the stop-loss