Glossary
Expert Advisor and MetaTrader terms, explained.
31 short, plain-language definitions of the words that come up when automating a trading strategy on MT4 or MT5.
- .ex4 / .ex5 and .mq4 / .mq5 files
- .mq4 and .mq5 files are the editable source code of an MQL program; .ex4 and .ex5 files are the compiled versions that MetaTrader runs. A compiled file cannot be edited, so changes need the source.Related: MQL4 ↔ MQL5 conversion & EA fixes
- Back-testing
- Back-testing is running a trading strategy on historical price data to see how it would have behaved. It shows past behaviour only and does not guarantee future results.Related: EA back-testing & optimisation
- Breakeven stop
- A breakeven stop moves the stop-loss to the entry price once a trade is a set distance in profit, so it can no longer turn into a loss from that point, except through slippage.Related: Trade managers & equity protection
- Breakout strategy
- A breakout strategy enters when price moves beyond a defined high, low or range, often with filters to reduce false breakouts.Related: Gold (XAUUSD) Expert Advisors
- Custom indicator
- A custom indicator is an MQL program that calculates values from price data and draws them on a chart, such as lines, zones or arrows, without placing trades itself. An Expert Advisor can read its output.Related: Custom MetaTrader indicators
- Daily loss limit
- A daily loss limit is the most an account may lose in one trading day, measured on balance or equity depending on the firm. Breaching it typically fails a prop firm account.Related: Prop firm & funded-account EAs
- Drawdown
- Drawdown is the fall in an account’s balance or equity from a previous peak, usually expressed as a percentage. Maximum drawdown is the largest such fall over a period.
- Equity and balance
- Balance is the account value from closed trades; equity is the balance plus the floating profit or loss of open positions.Related: Trade managers & equity protection
- Expert Advisor (EA)
- An Expert Advisor is a program written in MQL4 or MQL5 that runs on a MetaTrader chart and can analyse prices and open, manage and close trades automatically according to coded rules.Related: Custom MT4 & MT5 Expert Advisors
- Forward testing
- Forward testing is running an Expert Advisor in real time, usually on a demo account, to check execution, spreads and broker behaviour that a historical test cannot reproduce.Related: EA back-testing & optimisation
- Grid trading
- Grid trading places orders at regular price intervals above and below a level, profiting from price oscillation while accumulating exposure if price trends strongly in one direction.Related: Custom MT4 & MT5 Expert Advisors
- Hedging and netting accounts
- A hedging account can hold several opposite positions on the same symbol; a netting account combines them into one net position. MT4 accounts hedge; MT5 accounts can be either, which matters for grid and recovery strategies.Related: MQL4 ↔ MQL5 conversion & EA fixes
- Martingale and averaging
- Martingale increases position size after a loss, and averaging adds positions as price moves against the trade. Both can recover small losses but expose the account to large drawdowns.Related: Custom MT4 & MT5 Expert Advisors
- MetaTrader 4 and MetaTrader 5 (MT4, MT5)
- MetaTrader 4 and MetaTrader 5 are trading platforms made by MetaQuotes and offered by many forex and CFD brokers. Both run Expert Advisors, but each needs code written in its own language.Related: Custom MT4 & MT5 Expert Advisors
- MQL4
- MQL4 is the programming language of MetaTrader 4, used to write Expert Advisors, custom indicators and scripts for that platform.Related: MQL4 ↔ MQL5 conversion & EA fixes
- MQL5
- MQL5 is the programming language of MetaTrader 5. It is object-oriented and supports more asset types and account models than MQL4, so MQL4 programs must be converted before they run on MT5.Related: MQL4 ↔ MQL5 conversion & EA fixes
- News filter
- A news filter pauses an Expert Advisor around scheduled economic releases, for example high-impact events on an economic calendar, to avoid volatility spikes and slippage.Related: Custom MT4 & MT5 Expert Advisors
- Over-optimisation (curve fitting)
- Over-optimisation is tuning a strategy’s settings so closely to past data that it fits that history perfectly but fails on new data.Related: EA back-testing & optimisation
- Pine Script
- Pine Script is TradingView’s programming language for indicators and strategies. Its logic must be rewritten in MQL4 or MQL5 to run on MetaTrader.Related: TradingView Pine Script → MT4/MT5
- Position sizing (lot size)
- Position sizing sets each trade’s volume from a chosen risk, for example 1% of the balance, and the distance to the stop-loss, instead of using a fixed lot size.Related: Trade managers & equity protection
- Prop firm (funded account)
- A proprietary trading firm gives traders access to a funded account, usually after an evaluation, under rules such as a daily loss limit and a maximum drawdown that end the account if breached.Related: Prop firm & funded-account EAs
- Repainting
- A repainting indicator changes its past values as new bars form, so signals that look perfect on history may not have been available in real time.Related: Indicator to EA conversion
- Script
- A MetaTrader script is an MQL program that runs once when it is attached to a chart, performs a single task such as closing all positions or placing a set of pending orders, and then stops.Related: MT4 & MT5 scripts and utilities
- Slippage
- Slippage is the difference between the price an order was meant to fill at and the price it actually filled at, common during fast markets and news.
- Spread
- The spread is the difference between the buy (ask) and sell (bid) price. It is a cost on every trade and often widens around news and outside main sessions.
- Stop-loss and take-profit
- A stop-loss closes a trade at a set loss level and a take-profit closes it at a set profit level, so each trade’s outcome is bounded in advance.
- Strategy Tester
- The Strategy Tester is MetaTrader’s built-in tool for back-testing and optimising Expert Advisors on historical price data.Related: EA back-testing & optimisation
- Trailing stop-loss
- A trailing stop-loss is a stop that follows the price at a set distance as a trade moves into profit, locking in gains while letting the trade run.Related: Trade managers & equity protection
- VPS (virtual private server)
- An Expert Advisor only runs while its MetaTrader terminal is open, so traders often host the terminal on a VPS, a remote server that stays online around the clock.
- XAUUSD (gold)
- XAUUSD is the symbol for gold priced in US dollars. It moves quickly and its spread can widen sharply around news, so gold EAs need spread, slippage and news controls.Related: Gold (XAUUSD) Expert Advisors
- Zone recovery
- Zone recovery is a strategy that opens opposite, progressively larger positions within a fixed price zone, aiming to close the whole set at a net profit when price leaves the zone. It needs strict drawdown and equity safeguards.Related: Custom MT4 & MT5 Expert Advisors
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