Brokers by Type
Forex Brokers with MT4 Platform: Allies or a Path to Deposit Drain
The MetaTrader 4 (MT4) platform emerged in 2005, revolutionizing the field of forex trading. Even in 2022, it is still considered the most widely used trading platform.
The 4th version of MetaTrader was specifically designed for dealing operations. In other words, trades were not initially routed anywhere else. They were handled using the dealer’s internal reserves, including their capital and opposing orders from clients.
Over time, the software underwent upgrades, introducing the possibility of using Straight Through Processing (STP). However, additional configuration is required, which can negatively impact the platform’s performance.
MT4 Brokers 10 Years Ago and in 2023
In the last decade, the MetaTrader 4 platform was at the peak of its popularity. However, the situation changed significantly in 2023. Most brokers transitioned to new, modern trading platforms.
In 2022, 10% of MT4 brokers are smaller firms that did not route trades to the interbank market even a decade ago, and they have no intention of changing this approach.
90% of modern forex brokers offering MT4 are market makers. Then why is this platform still used? Most often, it is used by scammers. Their numbers far exceed those of legitimate brokers.
Characteristics of MT4 Forex Brokers
It’s worth noting that the majority of brokers using the MT4 platform are market makers. This is indicated by their:
- Supported payment systems
License of an MT4 Broker
Usually, the license is either offshore or non-existent. In either case, regulatory bodies might not provide protection against fraud.
Many brokers offering real accounts on the MT4 platform are registered in St. Vincent and the Grenadines or utilize local licenses. Only the SVG FSA openly states that it does not oversee brokers in the forex or binary options markets. In case of broker fraud, the regulator won’t help recover funds.
Trustworthy MT4 brokers are very few in number. The practice demonstrates that the majority of them are located in Cyprus, dating back to a time when CySEC (the Cyprus regulator) was issuing licenses liberally, even to scammers.
Leverage of an MT4 Broker
Typically, MT4 dealers offer leverage ranging from 1:100 to 1:1000, and sometimes even higher. It’s important to note that positions with such high leverage do not reach the interbank market. This is a sign of a market maker that can imitate any trading volume. Such brokers do not risk their own capital when providing high leverage.
Payment Systems of an MT4 Broker
A reliable broker accepts funds via bank accounts, cards, and payment systems with strict verification procedures. Fraudsters who use MT4 may accept transfers from payment systems where anonymous accounts can be created. This practice contradicts KYC and AML policies.
Binary Options Brokers with MT4
Globally, there are only two or, at most, three genuine brokers offering binary options, all of them from the US. The rest are scammers peddling bets on quote differences. Essentially, they are bookmakers. Due to numerous scandals, these fraudulent practices are being widely banned.
Can Fake Binary Options Brokers Offer the MT4 Platform?
Yes, if they present themselves as forex dealers. For those who merely accept bets, there’s no need for a trading terminal.
Can MT4 Brokers Be Trusted?
If a broker suggests opening a MetaTrader 4 account, they are likely scammers. Moreover, this is outdated software that doesn’t meet modern market requirements. Even the developer of MetaTrader 4 encourages transitioning to MT5, which offers the possibility to route trades to the interbank market and even trade on real exchanges.