MT5 and MT4 are two versions of the MetaTrader forex trading platform developed by MetaQuotes Software Corp. While these two platforms share several similarities, each also offers several unique features. Since these are the most popular trading platforms in the world, millions of traders have to choose between them. This post defines what is MT4 and MT5, exploring key differences between MetaTrader 4 vs MetaTrader 5 to help you choose the most suitable one for your trading style.
Overview of MetaTrader 4 and MetaTrader 5
MT4 is the top Forex trading tool used by millions of traders worldwide. It came out in 2005 and focuses on trading with algorithms. MetaTrader 5 (MT5) is the newest version of this tool, launched in 2010. MT5 not only allows Forex trading but also helps with stocks and commodities trading by connecting to Forex main exchanges. It is known for its upgraded features and greater flexibility.
Key Differences Between MT4 and MT5
So what is the difference between MT4 and MT5? Despite being a newer MetaTrader platform, MT5 isn’t exactly an upgraded version of MT4. In fact, both platforms have similar graphical interfaces which makes them quite similar in terms of their overall appearance and function.
However, MetaTrader 5 supports trading in other markets aside from Forex such as stocks and futures trading. MT5 was also built to meet the needs of traders in the United States in a way that MT4 could not. This is one of the core differences between MetaTrader 4 vs 5.
The MT5 platform complies with the United States “no-hedging” rule by enforcing first-in, first-out (FIFO) execution.MT4 on the other hand supports hedging. Consequently, MT5 is better suited for traders in the US while the older version is preferred by a global audience.
In addition to these core MT5 vs MT4 differences, other key differences between MT5 and MT4 include their use of different programming languages (MT4 uses MQL4, while MT5 uses MQL5), MT5’s faster backtesting speed, and the lack of multi-currency backtesting in MT4.
Features Comparison: MetaTrader 4 vs MetaTrader 5
So how do the features of Metatrader 5 vs 4 compare against each other? Although MT5 isn’t substantially different from MT4, it does offer a few features that aren’t present in the older platform. There are also a few features in Metatrader 4 that are not present in Metatrader 5. Some of these features of MT4 and MT5 are highlighted below:
- Order Types: MetaTrader5 offers two additional order types; “buy stop limit” and “sell stop limit” which are not present in MT4. This is a key difference between MT4 vs MT5
- Additional indicators and widgets: MT5 offers deeper technical analysis because it has 8 extra indicators and 13 graphical objects.
- Economic calendar: MT5 has a tab for new release schedules and tools for analyzing their impact levels and market consensus.
- Improved strategy tester: MT5’s multi-threaded strategy tester is noticeably faster and supports simultaneous backtesting of multiple currencies.
- Time frame charts: MetaTrader 5 has 21 time frame charts while MT4 has only 9.
- Funds transfer: in MetaTrader 5, traders can transfer funds between accounts as long as the accounts are on the same server.
- Market depth: in MT5, traders can hit the ALT+B button to view the market depth (a graphical representation of bids and offers for a financial asset). This feature helps traders execute trade orders at the best price possible.
Choosing the Right Platform for Your Trading Style
Based on this trading platform review, which is better: MT4 or MT5? MetaTrader 4 might be a good fit for new traders and those who mainly trade Forex. Even though MT4 is older, it is known for being stable and quick. This makes it good for fast trades and scalping.
But, MT4 may not perform as well when you need to work with large data sets or run many automated trades at once. In this case, MT5 has better tools for testing and running code, giving it an advantage. The added features of the newer MetaTrader help it work well for skilled traders and those who want to trade more types of assets, not just forex.
MT4 vs MT5: Which Platform is Better for Forex Traders?
Is Metatrader 4 or 5 better, for Forex trading? As a Forex trader, the older MT4 platform is still considered a highly effective trading platform with a familiar and easy-to-use interface. It supports the standard order types and has basic back-testing capabilities. Unless you intend to comply with US trading regulations for some reason or you need to do a great deal of back testing there’s no reason not to use MT4 as a forex trader.
Compatibility and Flexibility: Using Both Platforms
As a trader, there’s no rule that says you can’t use both MT4 and MT5 together. In fact, many traders use MT4 and MT5 on the same device and a lot of Forex brokers offer both platforms. Trading with MetaTrader 4 and 5 is particularly great for traders who intend to use multiple accounts with different strategies. So while you should understand the difference between metatrader 4 and 5, you can actually use both platforms together as part of your trading strategy.
Conclusion: Which is Better, MetaTrader 4 or 5?
So, which is best: MT4 or MT5? In the end, MetaTrader 4 and 5 are very similar trading tools. MT4 is older and easier to use, making it a favorite among retail traders for its trust and ease. But MT5, as the newer version, has a better layout with more features and a broader market.
FAQs
Is MT5 better than MT4?
MT5 is often seen as the better choice, especially if you want more advanced tools and access to more types of financial markets. Still, MT4 has all the tools you need for forex trading and is usually simpler to use.
Is MT5 good for beginners?
MT5 offers more advanced functionalities which some beginners may find more complex compared to MT4.
Will MT4 be phased out?
MetaQuotes Software has been trying to phase out MT4 since it launched. While this will happen eventually, it may take another decade for the MT4 platform to become fully phased out.
Why was MT5 banned?
The MetaTrader 4 and 5 apps were banned from the app stores in 2022 because Metaquotes, the company behind the software, is a Russian company.
Can I use both MT4 and MT5 for trading?
Yes, you use both MT5 and MT4 for trading as long as both platforms are supported by your chosen broker. This means you don’t necessarily have to choose between MT5 vs MT4 since you can always use both platforms. However, you’ll have to open two separate accounts for each of these platforms.
Which is more popular: MetaTrader 4 or MetaTrader 5?
Although MT5 has been gradually growing in popularity over the years, MT4 remains popular with brokers and traders.
