The MT4 and MT5 platforms are two of the world’s leading trading platforms, used by a majority of traders worldwide. Released by MetaQuotes in 2005, MetaTrader 4 has gone on to gain widespread popularity among millions of global forex traders. It is widely considered one of the easiest currency trading platforms to use in the online retail forex market. Its remarkable simplicity combined with robust trading tools is what appeals to all types of traders, regardless of expertise.
Launched in 2010, MT5 is a multi-asset trading platform. Where the MT4 platform was built with forex traders in mind, MT5 offers broader applications to accommodate a larger scope of more complex asset trading. This includes forex, futures, options, stocks, and bonds.
Commonalities between the MT4 and MT5 trading platforms
As far as usability and architecture is concerned, MetaTrader 4 and MetaTrader 5 are comparable:
- Renowned for their flexibility, both platforms can be customised to individual trading needs. This offers a level of convenience that appeals to traders everywhere.
- Both MT4 and MT5 offer advanced features for technical analysis, automated or algorithmic trading, Expert Advisors, and more.
- Trading and analytical technologies allow traders to analyse global financial markets and execute different trading strategies, regardless of complexity.
- MT4 and MT5 mobile applications allow traders to trade anytime and anywhere, from multiple devices.
- Both trading platforms offer stability, fast execution and easy management of accounts.
- MetaTrader 4 and MetaTrader 5 deliver powerful, easy-to-access functionalities like currency prices, indicators, signals, and charts.
Key differences between MT4 and MT5
While the MT4 and MT5 trading platforms have many similarities, it’s the differences that determine the types of traders they each attract.
The analytical functions of both platforms are some of their strongest features, enabling traders to quickly detect market fluctuations and make informed trading decisions.
- Whereas MT4 offers 9 timeframes for chart analysis, MT5 offers 21.
- MetaTrader 4 provides 30 built-in technical indicators and 24 analytical objects for price analysis. In contrast, MetaTrader 5 offers 38 technical indicators and 44 graphical objects.
- MT5 provides unlimited symbols. MT4 accommodates 1024.
- The MT4 and MT5 trading platforms are largely renowned for their wide-ranging technical analysis tools. The MetaTrader 5 platform is further enhanced by its built-in, comprehensive fundamental analysis features: direct access to financial news from global news agencies, and an Economic Calendar that provides publications of macroeconomic indicators.
Trading and order types
The MetaTrader 4 trading system offers 3 execution modes, as well as two market orders, 4 pending orders, 2 stop orders, and a trailing stop. In contrast, the MetaTrader 5 trading system provides 2 position accounting systems, Advanced Market Depth, 2 market orders, 6 pending orders, 2 stop orders and a trailing stop.
MT5 Depth of Market
MT5’s depth of market (DOM) feature allows traders to view where bids and asks for a particular instrument are priced across markets (current best prices, closest to the market). The DOM differs on the exchange and OTC markets.
MT5 position accounting systems
The 2 position accounting systems supported by MT5 are Netting and Hedging. The choice of system is dependent on the account and is established by the broker. While hedging can be used for trading forex (and is accommodated by MT4), the netting mode is adopted on exchange markets. The netting system allows a trader to have just one open position of a financial instrument at a time, but the volume of that position can be increased or reduced. With hedging, a new deal on a financial instrument opens a new position. Stop loss and take profit levels can be defined for each open position.
One of the most innovative qualities of both MetaTrader 4 and MetaTrader 5 is algorithmic or automated trading. This capability gives traders the ability to develop and apply Expert Advisors (trading robots) and technical indicators. Most trading strategies can be applied using trading robots (EA).
How the two platforms differ is in the programming language they use.
- MT4 uses MQL4(MetaQuotes Language 4) whereas MT5 uses MQL5 (MetaQuotes Language 5).
- MQL4 and MQL5 are built-in programming languages. They are used for developing trading robots and technical indicators.
- With MQL5, traders can write or alter scripts.
- The MT5 platform offers an embedded MQL5.community chat
- MQL4 systems are not compatible with MQL5 platforms.
A trading robot (EA) is a software program used for price analysis and executing trade transactions using technical signals based on specific criteria. The appeal of EAs is that they remove emotive (human) influences from trading which could negatively influence trade decisions.
Risk: While algorithmic offers speed and accuracy in regard to executing trades, there is still a level of risk involved. A proper risk management strategy remains key in mitigating large capital losses, regardless of the efficiency that algorithmic trading offers.
Both MetaTrader 4 and MetaTrader 5 offer backtesting. This feature allows traders to test trading strategies using historical market data. It assesses the viability of the strategy, after which a trader can apply it later in their own trading practices. The MT5 trading platform is said to allow for faster backtesting than MT4.
Choosing between MT4 vs MT5 ultimately comes down to personal choice and trading objectives. Analyse both solutions to determine which one best serves your trading needs. For a trader that lacks the necessary trading skills or expertise, or for those looking to trade forex or CFDs, the resourcefulness and simplicity of MT4 may be preferable. Alternatively, a more advanced trader may be drawn to the additional features offered by the MetaTrader 5 trading platform. Wherever you are in your trading journey, choose the platform that will help you meet your trading goals.