As a trader, choosing the right trading platform will be an essential component of your success. In this article, we are going to look at the differences between two trading platforms: MetaTrader 4 (MT4) and MetaTrader 5 (MT5). MT4 and MT5 are electronic trading platforms developed by MetaQuotes Software. It is important to note that despite the naming convention, MT5 is not a new and improved version of MT4 in the classical sense (like the difference between an iPhone 13 and an iPhone 14). Otherwise, this report would be a fairly simple one. Instead, MT5 and MT4 have very different functionalities, which we will discuss in the article below.
What is MetaTrader 4?
MT4 was released in 2005 and immediately became an extremely popular trading platform. It is versatile and can be accessed from various devices, including your phone, laptop, and tablet. MT4 has a specific focus on forex trading, but you can also trade commodities and index instruments using a CFD (Contract for Difference).
What is MetaTrader 5?
MT5 was released in 2010 and has slowly increased in popularity, with many traders citing improved functionality and increased adaptability. MT5 has similar levels of mobility to MT4, being able to be accessed from most devices. MT5 can be used to trade forex, stocks, and futures.
What are the differences between MT4 and MT5?
There are major functional differences between MT4 and MT5, which we will go into detail below. We have summarised these functional differences in the table at the end of this section.
Both trading platforms utilise algorithmic trading. Algorithmic trading is used by most traders to automate the process of trading and is just another tool that makes the lives of traders a lot easier. Even though both platforms have algorithmic trading, they execute it slightly differently. Both platforms have different types of order execution. Both include execution on request, execution by market, and instant execution. MT5 additionally includes exchange execution. Similarly, both platforms have different types of orders included. Again both include buy/sell stop orders and buy/sell limit orders. MT5 additionally includes buy/sell stop limit orders.
Both MT4 and MT5 have ways of producing customised analytics. The general rule of thumb is that MT5 tend to have a greater number of timeframes, in-built technical indicators and graphical objects. There are also indicators available in MT5 that are not available in MT4, such as Fibonacci and Elliot tools. Both platforms have an alert functionality and financial news functionality. MT5 also has an economic calendar built-in, whereas MT4 does not, which improves the global financial news functionality in the MT5 platform. A major benefit of the MT5 system is the built-in community features, allowing users to seek advice from other traders. There is also an internal mailing system in both MT4 and MT5 that can be used by traders to contact their broker.
Both MT4 and MT5 allow you to hedge your trades as a form of risk management. However, MT5 adds the additional functionality of being able to net your trades, which allow more efficient trade settlements.
Due to being an earlier and less specialised trading platform, MT4 is much easier to use than MT5. This is the case even more so for those who will only be forex trading. However, MetaQuotes made the user interface of MT5 much better, the reason for MT4 being easier to use is the lower volume of charts, timeframes, and assets that can be traded. As mentioned before, both trading platforms have mobile, tablet, and computer functionality. However, recently MetaQuotes platforms have been removed from the Apple store, therefore, if you own an Apple ecosystem, you may be out of like. That being said, MT4 and MT5 are both compatible with most internet browsers.
Both MT4 and MT5 are built on a custom programming language called MQL. MT4’s programming language is named MQL 4, and MT5’s programming language is creatively called MQ5. Learning how to use these programming languages will make you a more effective trader as it will allow you to unlock the full potential of electronic trading platforms. MQL4 and MQL5 are very similar programs, and an update of MQL4 in 2014 means that both languages are logically consistent and relatively easy to use. There is one advantage of MQL5 and, therefore, MT5, and that is due to greater back-testing functionality. There is also separate functionality that makes MT5 better at testing trader’s strategy, including a multithreaded strategy tester (as opposed to MT4’s single thread) that allows MT5 to backtest strategies at a greater speed.
MT5 is significantly faster than MT4, having been released more recently than its counterpart. MT5 also has a better server infrastructure, with four dedicated servers, compared to MT4’s one.
|Markets||Forex||Forex, stocks, futures, bonds, options|
|Executions||Execution on request, execution by market, instant execution||Execution on request, execution by market, instant execution, exchange execution|
|Orders||Buy/sell stop orders, buy/sell limit orders||Buy/sell stop orders, buy/sell limit orders, buy/sell stop limit orders|
|Risk Management||Hedging||Hedging and Netting|
|Strategy Tester||Single-thread strategy tester||Multi-thread strategy tester|
MT4 vs MT5 Takeaways
And now, you should have a better understanding of the differences between MT4 and MT5, with the most crucial being that they have very different intended purposes and so it is not as simple as MT5 being better than MT4. This should allow you to make a measured decision on which platform suits you best.
MT4 is much easier for newer Forex traders. However, it only supports forex assets and CFDs and has fewer features than MT5. MT5 offers a greater volume of technical indicators, timeframes and graphics, along with improvements such as an economic calendar. MT5 also offers more markets that traders can trade, including stocks, futures, and options. MT5 also comes with its drawbacks, with it being harder to grasp for beginners.