In the world of forex trading, choosing the right platform can significantly impact your trading experience and success. Two of the most popular trading platforms are MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Developed by MetaQuotes, these platforms cater to different trading needs and preferences. In this blog, we’ll compare MT4 and MT5 across various aspects to help you decide which app is better for you.
1. Overview of MT4 and MT5
MT4 (MetaTrader 4)
Launched in 2005, MT4 has become the gold standard for forex trading due to its user-friendly interface and robust features. It is specifically designed for forex traders, making it ideal for beginners and experienced traders alike. MT4 supports algorithmic trading, technical analysis, and offers a wide range of customization options.
MT5 (MetaTrader 5)
Introduced in 2010 as the successor to MT4, MT5 brings additional features and capabilities. While it supports forex trading, MT5 is a more versatile platform that also allows trading in stocks, commodities, and futures. This multi-asset functionality makes it a compelling choice for traders looking to diversify their portfolios.
2. Key Differences Between MT4 and MT5
a) Trading Instruments
- MT4: Primarily designed for forex, MT4 supports a limited range of CFDs and commodities.
- MT5: MT5 offers a broader range of trading instruments, including stocks and futures, making it suitable for multi-asset trading.
b) Order Types
- MT4: Supports four types of pending orders: Buy Stop, Sell Stop, Buy Limit, and Sell Limit.
- MT5: Expands this to six pending order types, adding Buy Stop Limit and Sell Stop Limit for greater flexibility in trading strategies.
c) Timeframes and Charts
- MT4: Offers nine timeframes for charting.
- MT5: Provides 21 timeframes, allowing for more detailed analysis of price movements.
d) Depth of Market (DOM)
- MT4: Lacks an integrated Depth of Market feature, limiting insights into market liquidity.
- MT5: Includes DOM, providing traders with better visibility into market depth and order flow.
3. Technical Analysis and Indicators
a) Built-in Indicators
- MT4: Comes with 30 built-in indicators and supports a plethora of custom indicators created by the trading community.
- MT5: Offers 38 built-in indicators, enhancing technical analysis capabilities and allowing for more complex strategies.
b) Economic Calendar
- MT4: Does not feature an integrated economic calendar, requiring traders to seek external sources for economic news.
- MT5: Includes an economic calendar, making it easier for traders to stay informed about important financial events.
4. Programming and Algorithmic Trading
a) Expert Advisors (EAs)
- MT4: Utilizes the MQL4 programming language, which is simpler and widely used for creating custom indicators and EAs.
- MT5: Uses MQL5, which is more advanced and allows for better performance, particularly in algorithmic trading.
b) Backtesting
- MT4: Features single-thread backtesting, which can be slower for complex strategies.
- MT5: Supports multi-threaded backtesting, significantly improving the efficiency of strategy testing and optimization.
5. Order Execution and Hedging
a) Hedging
- MT4: Allows hedging, enabling traders to open multiple positions in opposite directions on the same currency pair.
- MT5: Initially supported netting but now includes hedging options as well, providing flexibility for forex traders.
b) Partial Order Filling
- MT4: Does not support partial order filling; if an order cannot be fully executed, it is rejected.
- MT5: Allows for partial order filling, which can be advantageous for large trades in less liquid markets.
6. User Interface and Experience
a) User Interface
- MT4: Known for its simplicity and ease of use, making it accessible for traders of all experience levels.
- MT5: Offers a more modern and sophisticated interface, which may require some adjustment for those accustomed to MT4.
b) Mobile and Web Versions
Both platforms have mobile apps and web versions. However, MT5’s mobile app includes more features and better charting options compared to MT4’s mobile offering.
7. Which Platform Should You Choose?
When to Choose MT4:
- If you are primarily focused on forex trading and prefer a straightforward platform, MT4 is likely your best bet.
- If you value simplicity and ease of use, especially as a beginner, MT4 remains a popular choice.
- If you’re interested in automated trading, MT4’s MQL4 is beginner-friendly and widely supported.
When to Choose MT5:
- If you want to trade multiple asset classes, MT5 offers a more comprehensive platform for stocks, commodities, and forex.
- If you require advanced technical analysis tools and more flexibility in order types, MT5 is the better option.
- If you plan to engage in algorithmic trading and want faster backtesting capabilities, MT5’s MQL5 programming language and multi-threaded testing are advantageous.
Conclusion
Both MT4 and MT5 are powerful trading platforms with distinct features and capabilities. Your choice between them will ultimately depend on your trading style, asset preferences, and the tools you need. If you’re focused on forex trading with an emphasis on simplicity, MT4 is a solid choice. However, if you’re looking for a more versatile platform with advanced features and multi-asset support, MT5 is likely the better option. Assess your trading goals and preferences carefully to make the best decision for your trading journey.