MT4 vs. MT5: What Are the Key Differences?

When it comes to online trading platforms, the debate between MetaTrader 4 (MT4) and MetaTrader 5 (MT5) is a prominent one. MetaQuotes Software develops both platforms, but they cater to different market segments and have distinct functionalities. This article aims to provide an educational insight into the MT4 vs. MT5 debate, outlining their features and their critical differences. Let’s get started!

What is MetaTrader 4 (MT4)?

MT4, released in 2005, is primarily used for Forex trading. It has earned a good reputation from users for its user-friendly interface, robust technical analysis tools, and the ability to support automated trading through Expert Advisors (EAs). MT4's simplicity and efficiency have made it a favorite among retail Forex traders. It offers enough features to accommodate beginners and experienced traders, making it a standard in Forex trading platforms.

What is MetaTrader 5 (MT5)?

MT5, launched in 2010, is not just an update to MT4 but a completely different platform designed for a broader range of trading instruments. Unlike MT4, MT5 is suited for both Forex and stock markets. It has additional timeframes, technical indicators, an economic calendar, and advanced trading functions. MT5 also supports more types of market orders and has an improved strategy tester for EAs. The platform received many positive user reviews, ranking it a 5-star application.

MT4 Vs. MT5: Similarities

While exploring the MT4 vs. MT5 debate, it's important to acknowledge these platforms' similarities. MetaQuotes Software develops both MT4 and MT5, and both have a similar user interface, making it easier for users to transition between the two. They both offer automated trading through Expert Advisors (EAs), provide a range of technical indicators and charting tools, and support custom indicators and scripts. Both MT4 and MT5 are built on a custom programming language called MQL. Additionally, both platforms offer demo accounts, enabling traders to practice and develop their skills without risking real money.

MT4 vs. MT5: Key Differences

To settle the MT4 vs. MT5 debate, we have to look at what makes these two trading platforms different, which has better functionalities, and which caters to a broader audience.

Market Accessibility:

• MT4 is primarily focused on Forex trading.


• MT5 offers access to a broader range of markets, including stocks, commodities, and futures, alongside Forex.

Trading System and Execution:

• MT4 uses a dealing desk execution system that is suitable for Forex traders.


• MT5 operates on a dealing and no-dealing desk system, accommodating more trading styles and strategies.

Timeframes and Technical Indicators:

• MT4 has 9 timeframes and 30 technical indicators.


• MT5 boasts 21 timeframes and over 80 technical indicators, offering a more detailed analysis.

Economic Calendar:

• MT4 does not include an integrated economic calendar.


• MT5 features a built-in economic calendar with news events, forecasts, and impact ratings.

Order Types and Execution Modes:

• MT4 offers 4 types of pending orders and 3 execution modes.


• MT5 expands this with 6 types of pending orders and 4 execution modes.

Strategy Tester:

• MT4’s strategy tester allows for basic back-testing of EAs.


• MT5’s strategy tester is more advanced, with multi-threaded, multi-currency testing and real tick data.

Programming Language and Customization:

• MT4 uses MQL4, which is easier for beginners.


• MT5 uses MQL5, which offers more advanced programming capabilities but is more complex.

Hedging and Netting

• MT4 allows for hedging, where traders can hold multiple positions in the same asset, either in the same or opposite direction.


• MT5 offers both hedging and netting. Netting means you can only have one common position for a symbol at any given time, a feature more aligned with stock and commodity markets.

Data Transfer and Historical Data:

• MT4 has a simpler database management system and less historical data.


• MT5 has an advanced database management system, allowing more historical data to be stored and quickly accessed.

Speed and Performance:

• MT4 is known for its speed and reliability, especially for basic trading functions.


• MT5 handles more data faster, which benefits those using complex trading robots and strategies.

MT4 vs. MT5: Which One Should You Choose?

MT4 vs. MT5, which one is the best? In reality, the choice between MT4 and MT5 depends on your trading needs and preferences. If you are primarily interested in Forex trading and prefer a simpler, more straightforward platform, MT4 might be the better choice. Its ease of use and wide acceptance among Forex traders make it a reliable option.

On the other hand, if you are looking for more advanced features, including access to a broader range of markets, more analytical tools, and sophisticated trading functions, MT5 is the way to go. It's also better suited for traders who rely heavily on automated trading systems and require a platform that can handle complex strategies.

Conclusion

The MT4 vs. MT5 debate is not about which platform is better overall but which one better suits individual trading styles and needs. MT4 remains a robust and popular choice for Forex trading due to its simplicity and effectiveness. Meanwhile, MT5 caters to a broader spectrum of traders with its advanced features and flexibility. Understanding the key differences between the two will help you make an informed decision tailored to your trading goals. Download MT4 and MT5 today with XS.com and see the difference yourself!