With both MT4 and MT5 being popular choices among traders, it can be difficult to decide which one is better suited for your trading needs. In this blog post, we’ll look at the key differences between MT4 and MT5, their pros and cons, and features and limitations.
We will also highlight scenarios where one platform may be better than the other. By the end of this post, you’ll have a better understanding of which platform is right for you.
What is the MetaTrader Platform?
The MetaTrader platform is a software program that traders buy and sell assets on the market. It’s mainly used to trade currencies (like US dollars, Euros, or Japanese Yen), but it can also be used for other things like stocks or commodities.
This platform has many tools to help traders make smart trading decisions, like charts and graphs that show how prices are changing over time. It also lets traders set up automatic trades so they don’t have to monitor the market all the time.
There are two versions of the MetaTrader Platform currently available:
MetaTrader 4 (MT4)
MetaTrader 4 (MT4) is an electronic trading platform used by traders to trade in financial markets. MT4 was developed by MetaQuotes Software Corporation and was released in 2005.
MT4 quickly became one of the most popular trading platforms in the world, especially for forex trading. It provides traders with access to real-time market data, advanced charting tools, and technical analysis indicators.
MT4 also supports automated trading through the use of Expert Advisors (EAs), which are software programs that can execute trades based on predefined trading strategies.
Key Features and Pros of MetaTrader 4
1. Real-time Market Quotes
MT4 provides real-time quotes for financial instruments, allowing traders to see the latest market prices for the assets they are interested in.
2. Customizable Charts
MetaTrader 4 offers customizable charts with a variety of timeframes, indicators, and drawing tools to help traders analyze market trends and make trading decisions.
3. Automated Trading
MT4 supports automated trading through the use of Expert Advisors (EAs), which are software programs that can execute trades based on predefined trading strategies.
4. Multiple Order Types
MetaTrader 4 supports multiple order types, including market orders, pending orders, stop orders, and limit orders, giving traders more flexibility in their trading.
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MT4 allows traders to test their trading strategies using historical data, helping them to evaluate the performance of their strategies and make improvements.
6. Mobile Trading
MetaTrader 4 has a mobile app that allows traders to access their accounts and trade on the go.
7. One-click Trading
MT4 offers one-click trading, allowing traders to execute trades quickly and easily.
8. Secure Trading
MetaTrader 4 uses advanced security measures to protect traders’ accounts and personal information, including encryption and two-factor authentication.
Limitations and Cons of MetaTrader 4
1. Supported Markets
MT4 is primarily designed for forex trading, and while it supports other markets such as commodities and indices, it is less versatile than MT5.
2. Limited Order Execution Types
MetaTrader 4 supports only four order types – market, limit, stop, and trailing stop, while MT5 has an additional order type, stop limit.
3. Limited Market Depth
MT4 shows limited market depth, which means traders cannot see the full range of bid and ask prices and the number of orders at each price level.
4. Limited Backtesting Capabilities
MT4’s backtesting capabilities are limited compared to MT5, making it difficult for traders to accurately test and evaluate their trading strategies.
5. Limited Programming Language
MT4 uses the MQL4 programming language, which is less powerful than the MQL5 language used in MT5.
6. Limited Technical Analysis Tools
MT4 provides a limited number of technical analysis tools, while MT5 has a wider range of built-in tools and indicators.
MetaTrader 5 (MT5)
MetaTrader 5 (MT5) is the successor to MetaTrader 4 (MT4) and offers several advanced features and tools. This includes built-in hedging functionality, more order types, more technical analysis indicators, and improved backtesting capabilities.
MT5 is also designed to be faster and more efficient than MT4, making it a good choice for traders who require high-speed trading and advanced analysis tools. MT5 is available from many forex and stock brokers around the world, and it can be accessed via desktop or mobile devices.
Key Features and Pros of MetaTrader 5
1. Faster Execution
MT5 is designed to be faster and more efficient than MT4, allowing traders to execute trades quickly and with minimal latency.
2. More Technical Analysis Tools
MT5 offers a wider range of technical analysis indicators than MT4, providing traders with more options for analyzing market trends and making informed trading decisions.
3. Advanced Order Types
MT5 supports more order types than MT4, including stop-limit orders and market depth.
4. More Tradable Assets
MT5 supports the trading of multiple asset classes, including forex, stocks, commodities, and indices.
5. Improved Programming Language
MT5 uses the MQL5 programming language, which is more powerful than the MQL4 language used in MT4, giving traders more flexibility in developing custom indicators and trading robots.
6. Improved Backtesting Capabilities
MT5’s backtesting functionality is more advanced than MT4, allowing traders to test and optimize their trading strategies using historical data.
7. Extra Timeframes
MT5 offers more timeframe options than MT4, allowing traders to view price charts in more detail and choose the time period that best suits their trading style.
8. Strategy Tester
MT5’s strategy tester is more advanced than MT4, allowing traders to test and optimize their trading strategies using multi-currency and multi-threading options.
9. Mobile Trading
MT5 has a mobile app for both Android and iOS devices, allowing traders to access their accounts and trade on the go.
10. Improved Security
MT5 has more advanced security features than MT4, including two-factor authentication and encryption of all data transmission between the trader’s computer and the broker’s server.
Limitations and Cons of MetaTrader 5
1. Higher System Requirements
MT5 requires more computing resources than MT4, including a faster processor and more memory, which can make it more challenging to run the platform on older or less powerful computers.
2. Limited Compatibility
MT5 is not backward compatible with MT4, which means that trading robots and custom indicators developed for MT4 cannot be used in MT5.
3. Limited Charts Customization
MT5 has fewer options for customizing charts compared to MT4, which can make it more difficult for traders to view and analyze price data in the way they prefer.
4. More Technical
MT5 is more complex than MT4, with more advanced features and tools, which can make it more difficult for novice traders to learn and navigate.
MT4 vs MT5: Key Differences
1. User Interface and Design
While both platforms share a similar interface and design, MT5 has a more modern and streamlined interface compared to MT4. MT5 also offers more customization options for the user interface.
2. Supported Markets and Instruments
MT4 was initially designed for forex trading, while MT5 supports a wider range of financial markets, including stocks, futures, and options. MT5 also supports more instruments and offers more advanced trading features for each instrument.
3. Programming Languages
MT4 uses the MQL4 programming language, while MT5 uses MQL5. MQL5 is more advanced and powerful, but it is also more complex and difficult to learn compared to MQL4. MT5 also allows for more advanced programming options, such as object-oriented programming.
4. Trading and Analysis Tools
MT5 offers more advanced charting and analysis tools compared to MT4, including more than 80 built-in technical indicators and analytical objects. MT5 also offers more advanced order management features, including the ability to place orders directly from charts.
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MT4 vs MT5: Which platform should I use?
MT4 Is Better If:
1. You primarily trade forex and want a simpler interface and more intuitive features for forex trading.
2. You prefer a more user-friendly mobile trading app.
MT5 Is Better If:
1. You trade a wider range of financial instruments, including stocks, futures, and options, as it supports a wider range of financial markets and instruments compared to MT4.
2. You use automated trading strategies, as MT5 offers more advanced programming options and supports multi-currency strategy testing.
3. You rely heavily on technical analysis in your trading, as MT5 offers more advanced charting and analysis tools, including more than 80 built-in technical indicators and analytical objects.
Ultimately, both platforms have their pros and cons, and the decision to use one over the other depends on your specific trading needs and preferences. You should try both platforms out and determine which one suits your trading style and goals best.