Are you struggling to decide between MT4 and MT5, the two most popular trading platforms? Don’t worry! You’re not alone. With a variety of features and benefits, it can be tough to choose the right one. Both platforms, developed by MetaQuotes Software, have earned a reputation for their reliability, user-friendly interface, and extensive features. In this article, we’ll dive deep into the world of MT4 vs MT5 and discuss the features, pros, and cons of both platforms, and by the end, you’ll have a clear understanding of which one is better suited for you. So, let’s get started!
A Brief Overview of MT4 vs MT5
What is MT4?
Launched in 2005, MetaTrader 4 quickly became the go-to platform for forex traders, thanks to its easy-to-use interface and comprehensive range of tools. MT4 is widely recognized for its compatibility with various devices and operating systems, as well as its extensive support for automated trading through Expert Advisors (EAs).
What is MT5?
Released in 2010, MetaTrader 5 is the successor to MT4. While it shares many similarities with its predecessor, MT5 boasts several new features, including more advanced trading tools, a built-in economic calendar, and an improved strategy tester. The platform also supports a broader range of financial instruments, including stocks, futures, and commodities.
Key Differences Between MT4 and MT5
When it comes to user interfaces, both platforms maintain a similar design. However, MT5 boasts a more modern and sleek appearance. If you’re a long-time MT4 user, the transition to MT5 should be smooth and hassle-free.
MT4 primarily supports forex and CFDs trading, while MT5 offers extended support for multiple asset classes, including stocks, futures, and options. This makes MT5 a more versatile platform for traders looking to diversify their portfolios.
Market Order Types
Both platforms offer a variety of order types, but MT5 has the edge with additional order types like “Buy Stop Limit” and “Sell Stop Limit.” These extra order types give traders more flexibility and control over their trades.
MT4 offers 9 standard timeframes, while MT5 provides 21 timeframes. The extra timeframes in MT5 enable traders to fine-tune their analysis and entry points, resulting in more accurate trading decisions.
Another exclusive feature of MT5 is the built-in economic calendar, which is not available in MT4. The economic calendar provides traders with up-to-date information on upcoming economic events, such as central bank announcements, employment reports, and GDP releases. This information can be crucial for fundamental traders, who base their trading decisions on macroeconomic factors and news events.
MT4 is known for its extensive list of built-in technical indicators. However, MT5 takes it a step further by providing 38 technical indicators, compared to MT4’s 30. Additionally, MT5 supports custom indicators, giving traders even more options for technical analysis.
MT5 has an advanced strategy tester that allows traders to test their EAs and trading strategies more efficiently. This feature supports multi-currency and multi-timeframe testing, as well as optimization based on various criteria, providing better insights into the performance of trading algorithms.
MT4 uses the MQL4 programming language, while MT5 uses the more advanced MQL5. Although both languages allow for custom indicators and expert advisors, MQL5 is more versatile, efficient, and better suited for modern trading strategies.
Depth of Market (DOM)
One of the specific features that distinguish MT5 from its predecessor is the Depth of Market (DOM) feature. DOM provides traders with real-time information about the liquidity of a particular trading instrument, displaying both the bid and ask prices at different levels. This added functionality helps traders make more informed decisions when entering and exiting trades, particularly in fast-moving or volatile markets.
Hedging vs. Netting
A key difference between MT4 and MT5 lies in their respective approaches to trade management. MT4 uses a hedging system, allowing traders to open multiple positions in the same instrument, in the same or opposite direction. This provides traders with the flexibility to hedge their positions or employ different trading strategies simultaneously.
On the other hand, MT5 initially only supported a netting system, where multiple positions in the same instrument are consolidated into a single position. However, due to popular demand, MT5 now also supports hedging mode, providing traders the flexibility to choose between the two systems.
Partial Order Filling Policies
MT5 offers greater flexibility in terms of order filling policies compared to MT4. While MT4 only supports the “Fill or Kill” policy, MT5 offers four different policies: “Fill or Kill,” “Immediate or Cancel,” “Return,” and “Good Till Canceled.” These additional policies give traders more control over how their orders are executed, allowing them to fine-tune their strategies according to market conditions.
Compatibility and Community Support
MT4 has been around for longer and, as a result, has a larger user base and more extensive community support. This means that you’ll find a wealth of resources, such as custom indicators, EAs, and tutorials, specifically tailored for MT4.
On the other hand, MT5 is gaining traction and becoming increasingly popular, particularly among traders who require more advanced tools and support for a wider range of financial instruments.
Pros and Cons of MT4 and MT5
MT4 Pros and Cons
- User-friendly interface
- Wide acceptance among brokers and traders
- Massive online community for support and development
- High stability and reliability
- Lower system requirements for smooth performance
- Limited to Forex trading
- Lacks advanced order types
- Less efficient programming language (MQL4)
MT5 Pros and Cons
- Improved speed and performance
- Supports a wider range of trading instruments
- More built-in tools and indicators
- Enhanced programming language (MQL5)
- Improved backtesting capabilities
- Slightly higher system requirements
- Less adoption by brokers
- Smaller online community compared to MT4
MT4 or MT5 Better?
Ultimately, the choice between MT4 and MT5 depends on your specific needs and trading style. If you primarily trade Forex and value a user-friendly platform with a large online community and a wide array of third-party tools, MT4 might be the better choice for you. Additionally, if you’re already comfortable using MT4, the transition to MT5 might not be worth the effort.
On the other hand, if you’re looking for a more versatile platform that supports a wider range of trading instruments and offers more advanced order types, MT5 is the way to go. Its improved programming language, additional timeframes, and enhanced backtesting capabilities make it more suitable for modern trading strategies and a better option for those who want to stay ahead of the game.
In the battle of MT4 vs MT5, there’s no clear winner. Both MT4 and MT5 are excellent trading platforms with their respective strengths and weaknesses. Choosing between them ultimately depends on your personal preferences, trading style, and the instruments you trade. Take your time to evaluate each platform’s features and consider your trading goals before making a decision. Either way, you’ll be using one of the most trusted and powerful trading platforms in the industry.
Q: Can I use both MT4 and MT5 simultaneously?
A: Yes, you can use both platforms simultaneously. However, you’ll need to have separate accounts for each platform, as they are not interchangeable.
Q: Is it easy to switch from MT4 to MT5?
A: The transition from MT4 to MT5 is generally smooth, as the platforms share many similarities in terms of design and features. However, you may need to learn the MQL5 programming language if you use custom indicators or expert advisors.
Q: Are MT4 and MT5 available on mobile devices?
A: Yes, both platforms are available on Android. You can download the respective apps from the Google Play Store. Unfortunately, iOS devices do not support MT4 or MT5.
Q: Can I transfer my custom indicators and expert advisors from MT4 to MT5?
A: Unfortunately, you cannot directly transfer custom indicators and expert advisors from MT4 to MT5 due to differences in programming languages (MQL4 and MQL5). However, you can rewrite or modify the code to make it compatible with MT5.
Q: Are MT4 and MT5 free to use?
A: Yes, both platforms are free to use. You can download and install them from the official MetaQuotes website or your broker’s website. However, some brokers may offer additional features or services at an extra cost.