In online trading, MetaTrader platforms are trusted tools for traders worldwide. Among these, MetaTrader 4 (MT4) and MetaTrader 5 (MT5) stand out as two pillars of the trading industry.
These platforms, developed by MetaQuotes, have distinct features and capabilities that cater to varying trading preferences and strategies.
MT4, the predecessor, has long been the industry standard, appreciated for its simplicity, custom indicators, and algorithmic trading capabilities. In contrast, MT5 is the newer, more versatile version, offering additional timeframes, technical indicators, and assets, making it suitable for a broader range of financial markets.
Traders often find themselves at a crossroads, pondering which of these MetaTrader platforms aligns most closely with their trading objectives.
To make an informed choice, we will provide the key differences, strengths, and areas of application for both MT4 and MT5, helping you select the platform that aligns best with your trading goals and style.
MetaTrader 4 (MT4)
MetaTrader 4 has a history dating back to the early 2000s. It was developed by MetaQuotes, a Russian software company, and launched in 2005.
MT4 was groundbreaking in several ways, introducing a user-friendly interface that revolutionized online trading. Its popularity quickly skyrocketed, and it became the platform of choice for Forex traders around the world.
MT4’s success can be attributed to its simplicity, reliability, and robust charting capabilities. Traders were drawn to its advanced technical analysis tools, customizable charts, and the ability to automate trading strategies using Expert Advisors (EAs). MT4 also offered a built-in programming language, MQL4, which allowed traders to create custom indicators and trading algorithms.
Over the years, MetaTrader 4 has gained a massive user base and developed a thriving ecosystem of EAs, indicators, and third-party plugins. It remained the dominant trading platform for over a decade, catering to traders of all levels with its versatile features.
MetaTrader 5 (MT5)
MetaTrader 5, MT4’s successor, made its debut a few years later. It was released by MetaQuotes in 2010, aimed at providing a more comprehensive trading platform.
MT5’s launch represented the company’s desire to expand beyond the Forex market and into other asset classes, including stocks, commodities, and cryptocurrencies, making it an ideal choice for brokers looking to offer a diverse range of financial instruments through the MT5 white label solution.
MT5 retained the user-friendly aspects of its predecessor while introducing several key enhancements. It offered a wider range of timeframes for chart analysis, an economic calendar, and additional order types.
The introduction of an advanced programming language, MQL5, allowed for more sophisticated trading algorithm development.
Order execution options were also expanded in MT5. Traders gained access to more order types, including market, pending, and stop-limit orders. This diversity allowed for more nuanced and precise trading execution strategies.
Difference Between MT4 Vs MT5
The two platforms, MT4 and MT5, are very similar; however, they exhibit distinct characteristics that cater to different trading needs. Here’s a table illustrating some of the fundamental differences between MT4 and MT5:
|Features||MetaTrader 4 (MT4)||MetaTrader 5 (MT5)|
|Trading purposes||Forex only||Forex, Stocks, Commodities, Indices, Cryptocurrencies|
|Economic Calendar||Not available||Built-in economic calendar|
|Order Types||Market, Pending Orders||Market, Pending, Stop-Limit Orders|
|Hedging||Supported||Supported, also offers “Netting” mode|
MT4 has long been the preferred platform for Forex traders. Its straightforward design and charting capabilities make it ideal for traders focusing primarily on currency pairs. MT4 is also renowned for its support of algorithmic trading through Expert Advisors (EAs).
In contrast, MT5 caters to traders with a broader outlook. If you aim to trade a variety of asset classes, including stocks and cryptocurrencies, MT5 is better equipped. Its economic calendar, multiple timeframes, and extensive order types offer a more comprehensive trading experience. MT5 becomes particularly appealing to those who wish to engage in a diversified trading portfolio.
The programming language used in a trading platform is pivotal in determining the complexity of trading algorithms that can be created. MT4 employs MQL4, a user-friendly language known for its simplicity. It is an ideal choice for traders seeking to develop custom indicators and Expert Advisors (EAs) for automated trading.
However, MQL4 may have limitations when it comes to creating highly intricate trading algorithms. MT5 uses MQL5, a more advanced and versatile programming language. MQL5 allows traders to develop complex and highly customized trading strategies, making it the preferred choice for those who seek a more algorithmic approach to trading.
MT4 provides a reasonable selection of timeframes, with nine options to choose from. This range caters to most standard trading approaches, allowing traders to conduct in-depth technical analysis. In contrast, MT5 offers a significantly broader array of timeframes, totaling 21.
This extensive selection provides traders with more granularity in analyzing market data, allowing for a more nuanced and precise approach to trading that caters to a wider spectrum of trading styles.
MT4, unfortunately, does not offer a built-in economic calendar. Traders using MT4 will need to seek external sources for economic event information.
MT5, on the other hand, addresses this gap by providing traders with a comprehensive built-in economic calendar. This calendar lists key economic events and their expected impact on the markets, allowing traders to make more informed decisions based on upcoming economic releases.
Order Types & Hedging
MT4 offers the basics, including market orders and pending orders, which suffice for many standard trading approaches. In contrast, MT5 expands this range by introducing market orders, pending orders, and stop-limit orders.
This added flexibility allows traders to fine-tune their trade execution methods. With stop-limit orders, traders can set specific entry and exit points with greater precision, catering to various trading strategies such as breakout or range-bound trading.
Both MT4 and MT5 support hedging, which allows traders to hold multiple positions in the same instrument simultaneously. This hedging capability is useful for strategies where traders wish to keep opposite positions open to mitigate risk or for scenarios where they want to hold positions for different durations.
However, MT5 goes a step further by introducing a “Netting” mode, which consolidates multiple positions into a single one. This simplifies record-keeping, making it easier for traders who prefer a netting approach, particularly in markets where hedging is not allowed.
The “Netting” mode in MT5 offers more flexibility in accommodating different trading preferences, emphasizing the platform’s adaptability to diverse trading styles.
Is MetaTrader 4 or 5 better?
While MT4 has been a staple in the trading world for years, MT5 represents a significant advancement. In many respects, MT5 emerges as the preferred choice for modern traders. MT5’s multi-asset capability, accommodating not only Forex but also stocks, commodities, indices, and cryptocurrencies, is a game-changer.
This expanded scope allows traders to diversify their portfolios without needing multiple platforms. Furthermore, the introduction of MQL5, a more sophisticated programming language, empowers traders to create highly customized trading strategies.
So MT5’s versatility and broader range of features make it the preferable choice for traders aiming to explore various asset classes and employ advanced trading strategies. You can choose a reputable MT5 White Label Solutions provider such as Leverate,…
However, MT 4 remained a preferred choice for those who valued its efficiency and ease of use, and MT 5 found its niche among traders who sought a more diversified asset selection and advanced trading tools.
This duality between MT4 and MT5 persists to this day, offering traders the flexibility to choose the platform that best aligns with their trading objectives and preferences.