As a forex trader, one of the things you need to trade forex online is a trading platform. MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are trading software solutions that rank highly amongst traders and forex advisors. This is mainly because of the value of the trading resources and tools found on these platforms.
MT4 and MT5 are owned by Metaquotes Software Corporation. These are platforms that enable forex traders to participate in the forex market from anywhere in the world. As the predecessor, the MT4 platform would only allow traders to trade in forex. The MT5 platform, the latest version, will enable traders to participate in other financial markets.
While the MT5 is an upgrade to the MT4, the functionality and features on these two platforms are different and thus may appeal to different traders. Choosing between the two platforms should be informed by your trading background and goals, among other factors.
Here is a comprehensive look at MetaTrader 4 vs 5 to help you determine which platform is best for your trading style.
Key differences between MT4 and MT5
The user interface
The MT4 platform comes in a simplistic interface that is easy to use, making it the preferred choice for beginner traders. The interface is highly customizable, allowing you to set it up to suit your trading needs.
The MT5 platform is an advanced version of the MT4 platform, meaning to contain improved features and new additions. It is a preferred alternative to the MT4 platform and most ideal for experienced forex traders as it may seem a little complex for beginners.
The MT4 platform comes with up to 30 inbuilt trading indicators, an additional 2000 free custom indicators and 700 premium indicators. The MT5 is a slight upgrade with 38 inbuilt indicators and the same number of premium and free indicators as the MT4.
MT4 gives users access to up to 9 different timeframes, from as short as a minute to as long as a month. On the other hand, the MT5 comes with more timeframes, offering at least 21 of them ranging from 1 minute to a year, with the option of accessing a wider market analysis.
One of the differences you will quickly note when comparing the MT4 and MT5 is the types of pending orders available on the two platforms.
The types of pending orders available on the MT5 platform are some of its best features. They include the buy limit, sell limit, buy stop, sell stop, buy stop limit and sell stop limit, two more than what is offered on the amt4 platform. These pending orders are ideal for traders who cannot sit and observe chart movements at all times. The pending orders can be set up to execute trades on behalf of the trader at the desired position while minimizing the number of trades you miss while away.
The MT4 comes with only 4 types of pending orders, the buy limit, sell limit, stop and sell stop. While these are ideal for new traders, they can be limiting for experienced traders looking for more trading options.
Internal funds transfer and accounts
The MT5 platform comes with a feature that allows internal funds transfer. With this feature, traders can transfer funds between different trading accounts on the MetaTrader platform without exiting their trade. This welcome feature is not available on the MT4 platform.
When it comes to the types of accounts, the MT4 and MT5 platforms use the hedging system while the MT5 platform supports the netting system too. On the MT4 platform, you can only trade in the forex market, while the MT5 platform allows you to take part in forex, stock, and CFDs, among other financial instruments.
The programming language, marketing depth and speed
The MT4 is programmed using MLQ4, commonly used for developing online trading platforms using the order system. On the other hand, the MT5 is programmed using MLQ5 that used a positioning system. In comparison, the MLQ4 is simpler and better than MLQ5, even though the latter allows traders to write and alter scripts, making it more efficient than MLQ4.
Regarding speed, the MT4 is slower than the MT5, which is expected since the MT5 is an improved version of the MT4. MT4 is built with a 32-bit mono threaded platform, while MT5 comes with a 64-bit mono threaded platform.
MT4 does not come with a market depth support function, while MT5 comes with an inbuilt function. This makes it possible for MT5 to place bids and offers for different financial securities at different prices. This feature in MT5 also displays current open and sell orders for different securities at different prices.
Which one should I pick?
When it comes to forex trading platforms, the best one for you depends on your individual needs. However, for beginner trading, starting with the MT5 platform might be overwhelming because of the complexities of the platform. MT5 is ideal for advanced traders who need to master more tools than what is available on the MT4.