MT4 Vs cTrader, Who is Better in Risk Management?

MT4 and cTrader are often compared in terms of display and basic functions. But what about their risk management tools?

The popularity of online trading keeps expanding, with millions of traders joining the market every year. Most of them are interested to trade because of the relatively low capital requirements to start, high potential profit, and 24/5 availability of the market. Particularly since the start of the pandemic, many people started to look for additional income and jobs that can be done from home.

Although the number of forex brokers keeps increasing each year, the retail trading space is still dominated by two trading platforms with not much competition going on, namely the MetaTrader series and cTrader. MetaTrader 4 remains the most popular platform in the market right now that it's often referred to as the "standard" platform for forex traders.

But even so, that doesn't mean MT4 is the best choice for everyone in every single aspect. Each platform has its pros and cons, so it's still necessary to compare different trading platforms before trading. One of the important things to consider is the risk management system that the platform offers. After all, forex trading is a risky business and so protecting your money should be one of the top priorities.

As such, we're going to compare the risk management tools between MT4 and cTrader and see how we can use them to our advantage.

Managing Risk with MT4

Even though MT4 is known as the most used and popular trading platform in the forex market, apparently it doesn't offer many advanced functions that can help traders minimize their trading risks when placing an order. MT4 allows traders to place stop loss and take profit at predetermined levels, trailing stops with a degree of customizations, but apart from that, there's not much traders can do. In other words, we must rely on calculating our trading risks manually and if we can't do that properly, we might be trapped in extreme losses and blow up our account balance.

Managing Risk with cTrader

Quite surprisingly, cTrader offers way more tools to manage risks compared to MT4. This means we can focus more on analyzing the market instead of stressing out position size to minimize risk.

To begin with, the platform will always display the potential risk even before we place an order. Even with the simplest market order, we can place stop loss and find out everything we need to know before entering the market. We can also adjust the quantity of potential loss in order to match both the risk and monetary negative profit. Just scroll down to the quantity box to view the overall potential trade, and we'll see all of the information we need, including the total pip value, the amount of risk in both currencies, the commission required, and the equity percentage risk. Such a feature allows us to prepare our trade better.

See also: Forex Margin Calculator

Aside from allowing users to place and adjust stop loss and take profit levels rather easily, cTrader also allows traders to place those levels directly from the chart. We can double-click to modify our position in a pop-up box just like in MT4, but the pop-up in cTrader is fully detachable. This allows us to increase or partly close our position while at the same time, analyzing our position by using an independent chart with different time frames and indicators.

If we found ourselves on the wrong side of the market, cTrader has the option to open a Reverse position. This means we will close our current trade and open a new one with the same lot size in the opposite direction. At the same time, we can also choose to Double Position to increase our overall trade quantity and profit. If we need more protection, we can use Advanced Protection and move our stop loss to breakeven.

Lastly, cTrader has a feature called Quick Trade, which enables traders to open a trade automatically with predetermined maximum slippage, stop loss, take profit, and trailing stop. This can certainly save our time and allow us to trade on the conditions we like without having to set the parameters every single time. Conveniently, all of the features above are available on the desktop, web, and mobile versions of cTrader.

The Bottom Line

MT4 might still dominate the market right now, but that doesn't mean the platform is flawless in every single area. When it comes to risk management, cTrader definitely gets the upper hand as it offers more functional features that can help traders to better manage their risks. This is important because forex trading is very risky and the market can be extremely volatile at times.

However, keep in mind that while you can avoid risks by using good risk management tools, there is still no 100% guarantee that you won't lose money in a trade. Also, if your risk management strategy doesn't require any advanced setting, using MT4 would suffice.