How To Trade Crypto Using MetaTrader 5 Trading Strategies

How To Trade Crypto Using MetaTrader 5 Trading Strategies

Cryptocurrencies are increasingly being traded like traditional foreign exchange currencies. They can be paired with another digital currency, like BTC/ETH, or with conventional fiat money, for example, BTC/USD. In addition to trading pairs, cryptocurrencies may be traded through derivatives contracts like futures and CFDs, allowing traders to speculate on price movements without owning the underlying asset.

Understanding Metatrader 5 Unique Features

MetaTrader 5 (MT5) is a multi-asset online trading platform developed by MetaQuotes Software. It provides access to diverse global financial markets, including foreign exchange, commodities, contracts for difference (CFDs), equities, futures, and stock market indices. MetaTrader 5 offers advanced charting features that allow traders to visualize market data and execute trades directly through their brokers.

One of MT5’s most popular features is support for automated trading through Expert Advisors (EAs). These trading robots can monitor markets, follow algorithms, and place trades without manual intervention.

Other key features include copy trading of successful strategies, a multi-threaded back tester to refine systems, integrated account-to-account fund transfers, alerts to monitor market events, and an embedded community chat for idea sharing between traders.

Executing Advanced Crypto Trading Strategies with MT5

Here are some key methods for unlocking the potential of your crypto investments with MT5 expert advisors.

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Identify support and resistance levels

The support and resistance levels are essential concepts in most crypto trading strategies. Although Metatrader 5 has no feature to identify them, you can easily download and integrate a Support and Resistance Lines indicator. Recognizing areas of support and resistance allows traders to pinpoint prices where reversals or breakouts may occur. By anticipating these points, traders can adjust their strategies to find optimal entries and exits.

MT5 traders can set up notifications when prices approach or breach support or resistance zones. This informs traders of pivotal moments in the price action so they can take timely action in their positions.

As prices rally towards overhead resistance in an uptrend, you may use stop orders to lock in gains if a reversal occurs. This limits downside risk while allowing for further upside if breakouts occur. For example, suppose Bitcoin rallies towards the $45,000 area, which has provided stiff resistance on multiple tests over the past year. In that case, traders may pause on pullbacks to the $44,000 support level to enter longs rather than chase the resistance. This provides a better risk-reward scenario if $45,000 once again reverses the rally.

The Support and Resistance Lines indicator makes spotting these key psychological levels straightforward. Integrating these critical zones into a trading plan allows for better-timed entries on retraces and strategic exits as prices peak near technical barriers.

Short Sell

With many forex brokers now offering cryptocurrency CFDs for trading on MetaTrader 5, short selling provides an opportunity to profit during crypto bear trends. Just as support and resistance levels can guide long entries, they can also assist with timely short trades.

For example, if Bitcoin fails to breach $25,000 resistance after repeated tests and starts rolling over, traders can watch for a break of support around $20,000 to short BTC/USD. Stops can then trail price action or be placed just above resistance to lock in gains on continued selloffs.

Crypto CFDs allow traders to capitalize on adverse fundamental news events weighing asset prices. Instead of just benefitting from rallies after positive developments, the ability to go short means bad news that damages a crypto’s outlook can lead to profitable downtrends.

To assess these events, MT5 provides built-in tools for analyzing news and economic data. Traders can access real-time feeds from top agencies and economic calendars tracking important crypto announcements. It’s critical to react to news headlines and evaluate the content and market impact.

Configure and Backtest Your Strategies

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Gathering extensive historical price data is vital for optimizing your crypto trading approach on MetaTrader 5. This allows you to backtest different entry and exit methods, stop losses, and take profit levels across various market conditions. Optimization techniques like genetic algorithms can rapidly evolve your trading system by testing combinations of parameters. Brute force testing incrementally tries all variable settings to uncover subtle edges other processes miss.

Regardless of the optimization methodology, the ultimate goal is discovering an ideal configuration of entries, exits, stop losses, position sizing, and other criteria that perform best on backtests. This provides a strategic crypto trading framework optimized for historically observed market behavior.

Additional backtesting on recent data allows for re-optimizing if needed as conditions shift over time.

Algorithmic Trading

This involves automating strategies via Expert Advisors (EAs) or custom indicators. EAs directly execute trades based on coded logic, while indicators analyze market data to inform strategy decisions.

Effectively developing EAs and indicators hinges on mastering MQL5 programming. This allows the creation of advanced algorithms that reliably execute rules-based strategies aligned with evolving market conditions.

You can buy EAs or hire a freelancer on MT5 to develop a customized one. Traders can backtest these algorithms against historical data to optimize automated strategy performance.

Some common algorithmic approaches include:

  • Trend Following: Identify the predominant market direction and trade accordingly.
  • Arbitrage:  Exploit pricing inefficiencies between asset pairs or exchanges.
  • Mean Reversion: Trade reversions from extreme highs/lows back to the average.
  • TWAP/VWAP: Progressively execute large orders based on volume or time weighting.

How To Start Trading Cryptocurrencies on MT5

Getting started trading cryptocurrencies on MetaTrader 5 requires just a few simple steps:

  • Open an MT5 account with a broker offering crypto CFDs.
  • Log into the MT5 platform and navigate to the Market Watch window.
  • Right-click Market Watch and click “Symbols” to open the symbols manager.
  • Under the “Crypto” tab, toggle cryptocurrency pairs to “Show” to add them to Market Watch.
  • With desired crypto CFD pairs now listed in Market Watch, execute trades by buying or selling directly from the charts.

Expert Tools and Risk Management for Crypto Trading

Beyond the strategies described, traders can also use sound risk management techniques on MT5. There are various options, allowing you to remove emotional decision-making that often hinders portfolio performance. The broad variety of technical indicators and flexibility to trade from charts, the Market Watch window, or right from the Terminal panel gives you all the tools necessary to master your crypto portfolio.

Ultimately, trading is all about consolidating your knowledge and applying it with confidence and appropriate risk management strategies. Whichever crypto you trade, using a helpful platform with the right technology can help you make those trades with ease and safety.


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