MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are popular trading platforms developed by MetaQuotes Software, widely used in the financial trading industry for forex, stocks, commodities, and other financial instruments. Although both platforms share some similarities, they cater to different needs and preferences of traders. Here, we explore the key differences between MT4 and MT5 to help you choose the right platform for your trading style and goals.
1. Market Coverage
MT4: Primarily designed for forex trading, MT4 has been the go-to platform for retail forex traders since its launch in 2005. It supports trading in various forex pairs and offers a robust set of tools for technical analysis and automated trading. The platform’s focus on forex markets makes it an ideal choice for traders who primarily deal with currency pairs.
MT5: Launched in 2010, MT5 is a more versatile platform that supports a broader range of financial instruments, including forex, stocks, commodities, indices, and futures. This makes MT5 a preferred choice for traders looking to diversify their trading portfolios across different asset classes. The ability to trade a wide range of instruments from a single platform offers significant convenience and flexibility, particularly for those engaged in multi-asset trading strategies.
2. Technical and Fundamental Analysis
MT4: MT4 offers 30 built-in technical indicators, 9 timeframes, and 31 graphical objects for conducting technical analysis. The platform’s MQL4 programming language allows traders to create custom indicators and automated trading strategies (Expert Advisors). MT4’s tools are sufficient for most technical analysis needs, providing traders with essential functionalities to make informed trading decisions.
MT5: MT5 enhances the analytical capabilities by offering 38 technical indicators, 21 timeframes, and 44 graphical objects. Additionally, MT5 includes an economic calendar and more advanced analytical tools, making it suitable for both technical and fundamental analysis. The platform’s comprehensive analysis tools enable traders to perform in-depth market analysis, which is crucial for making well-informed trading decisions. The integration of economic news directly within the platform allows traders to stay updated on market-moving events and adjust their strategies accordingly.
3. Order Types and Execution
MT4: MT4 supports four types of pending orders: Buy Limit, Sell Limit, Buy Stop, and Sell Stop. It also offers three order execution modes: Instant Execution, Market Execution, and Request Execution. These features provide traders with essential tools to manage their trades effectively. The simplicity of MT4’s order types and execution modes makes it user-friendly for both novice and experienced traders.
MT5: MT5 expands the order types to six, adding Buy Stop Limit and Sell Stop Limit to the existing four. It also offers four order execution modes: Instant Execution, Request Execution, Market Execution, and Exchange Execution, providing more flexibility in order management. The additional order types and execution modes in MT5 offer traders enhanced precision and control over their trading strategies, enabling more sophisticated order management techniques.
4. Hedging and Netting
MT4: MT4 supports hedging, allowing traders to open multiple positions in the same financial instrument, including positions in opposite directions. This is particularly useful for forex traders who use hedging strategies to manage risk. Hedging capabilities are crucial for traders who aim to minimize potential losses by holding offsetting positions.
MT5: MT5 offers both hedging and netting options. The netting system is typically used in stock and futures trading, where all positions in the same instrument are consolidated into one. The flexibility to choose between hedging and netting makes MT5 suitable for a wider range of trading strategies. Traders can select the method that best aligns with their trading goals and risk management practices.
5. Programming Languages
MT4: MT4 uses the MQL4 programming language, which is tailored for developing custom trading tools and automated trading systems. MQL4 is simpler and more suited for beginners in algorithmic trading. The straightforward nature of MQL4 makes it accessible for traders who are new to programming but wish to develop their own trading tools.
MT5: MT5 uses MQL5, a more advanced and flexible programming language than MQL4. MQL5 supports object-oriented programming and offers a broader range of functions and libraries, making it more powerful for developing complex trading algorithms and custom indicators. The enhanced capabilities of MQL5 are ideal for traders with advanced programming skills looking to create sophisticated trading systems.
6. Backtesting and Optimization
MT4: MT4’s strategy tester allows single-threaded backtesting of trading strategies. While effective, it can be time-consuming, especially for complex strategies. Single-threaded backtesting limits the speed and efficiency of strategy testing, potentially delaying the development and optimization of trading systems.
MT5: MT5 offers a multi-threaded strategy tester, enabling faster and more efficient backtesting and optimization of trading strategies. This feature is particularly beneficial for traders who rely on automated systems and need to test their strategies extensively. The multi-threaded capability significantly reduces the time required for backtesting, allowing for more thorough and frequent optimization.
7. Interface and Usability
MT4: The MT4 interface is user-friendly and intuitive, making it accessible to both beginner and experienced traders. Its simplicity and ease of use have contributed to its long-standing popularity. The straightforward design of MT4 ensures that traders can quickly navigate the platform and execute trades without confusion.
MT5: While MT5 offers a more sophisticated and feature-rich interface, it can be slightly more complex for new users. However, for experienced traders, the additional tools and functionalities provide a significant advantage. The enhanced interface of MT5 supports a more comprehensive trading experience, offering advanced features that cater to the needs of professional traders.
8. Community and Support
MT4: MT4 has a large, active user base and a wealth of online resources, including forums, tutorials, and custom indicators shared by the community. This extensive support network can be invaluable for new traders. The established community provides a rich source of knowledge and assistance, facilitating a smoother learning curve for MT4 users.
MT5: Although MT5’s user base is growing, it is not as large as MT4’s. However, the platform is gaining traction, and the availability of online resources and community support is steadily increasing. As MT5 continues to evolve, the growing community offers more resources and collaborative opportunities for traders.
Additional Features
Economic Calendar: One of the standout features of MT5 is the built-in economic calendar, which provides traders with real-time updates on important economic events and indicators. This feature allows traders to stay informed about market-moving news and make timely trading decisions based on economic data.
Depth of Market (DOM): MT5 includes the Depth of Market (DOM) feature, which provides insight into the supply and demand levels of financial instruments. This tool is particularly useful for traders who engage in order flow trading and need to understand the market liquidity and order book dynamics.
Partial Order Filling Policies: MT5 offers partial order filling policies, allowing traders to specify how their orders should be executed if only part of the order can be filled at the desired price. This feature enhances order management flexibility and can be critical in fast-moving markets.
MetaTrader 4 (MT4) vs MetaTrader 5 (MT5) Comparison
| Feature | MT4 | MT5 |
|---|---|---|
| Market Coverage | Primarily forex | Forex, stocks, commodities, indices, futures |
| Technical Indicators | 30 | 38 |
| Timeframes | 9 | 21 |
| Graphical Objects | 31 | 44 |
| Economic Calendar | No | Yes |
| Pending Order Types | 4 (Buy Limit, Sell Limit, Buy Stop, Sell Stop) | 6 (Buy Limit, Sell Limit, Buy Stop, Sell Stop, Buy Stop Limit, Sell Stop Limit) |
| Order Execution Modes | 3 (Instant, Market, Request) | 4 (Instant, Market, Request, Exchange) |
| Hedging | Yes | Yes |
| Netting | No | Yes |
| Programming Language | MQL4 | MQL5 |
| Backtesting | Single-threaded | Multi-threaded |
| Interface | User-friendly, intuitive | Feature-rich, slightly complex |
| Community and Support | Large, active, extensive resources | Growing, increasing resources |
| Depth of Market (DOM) | No | Yes |
| Partial Order Filling | No | Yes |
| Automated Trading | Yes (Expert Advisors) | Yes (Expert Advisors) |
| Custom Indicators | Yes | Yes |
| Strategy Tester | Single-threaded | Multi-threaded, advanced |
| Mobile/Tablet Compatibility | Yes | Yes |
| Demo Account | Yes | Yes |
| Multi-asset Trading | No | Yes |
| Economic News Integration | No | Yes |
Conclusion
Choosing between MT4 and MT5 ultimately depends on your trading preferences and requirements. If you primarily trade forex and prefer a simpler, more user-friendly platform, MT4 might be the right choice. On the other hand, if you seek a more versatile platform with advanced analytical tools, a wider range of order types, and the ability to trade multiple asset classes, MT5 is worth considering. Both platforms offer robust features and capabilities, ensuring that you can find the one that best suits your trading style and goals.
