MetaTrader 4 vs MetaTrader 5: A Comprehensive Comparison

This article aims to provide an in-depth analysis of MetaTrader 4 vs 5, breaking down their features and differences.

In recent years, the world of trading has experienced an unprecedented rise in popularity. With the advent of technology and easy access to financial markets, individuals from all backgrounds are now able to participate in trading activities. From traditional contracts for difference (CFDs) to newer forms of trading, such as cryptocurrencies, there is no shortage of options for traders looking to make a profit.

One aspect that has significantly contributed to this increase in popularity is the availability of advanced and reliable trading platforms. Selecting the right software can significantly influence a trader’s success. Among the myriad options available, MetaTrader 4 and MetaTrader 5 stand out as two of the most widely used trading platforms today.

MetaTrader 4: The Tried-and-True Veteran

What is MT4? MetaTrader 4, released in 2005 by MetaQuotes Software Corp, quickly established itself as the gold standard for Forex trading. Its intuitive user interface, combined with a wealth of robust features, has made it a favourite among both novice and experienced traders, as well as Forex brokers around the globe. 

Key Features

• Best Platform for Forex Trading: MT4 is tailored specifically for currency trading, providing the resources Forex traders need to succeed.
• Simple, Intuitive Interface: The platform is designed for ease of use, allowing traders to navigate effortlessly through various functions, making it ideal for those just starting.
• MQL4 Programming Language: This powerful scripting language allows users to create custom indicators and expert advisors, enhancing their trading strategies and automating trading processes.
• Real-Time Quotes in Market Watch Window: Traders can monitor live market data, helping them stay informed about price movements and make timely decisions.
• Support for Hedging Strategies: MT4 accommodates hedging techniques, allowing traders to manage risk effectively and protect their investments.

MetaTrader 5: The New-Age Powerhouse

What is MT5? Developed in 2010, MetaTrader 5 was designed to be the more advanced successor to MT4, offering a broader range of instruments and enhanced features to meet the evolving needs of modern traders in different markets.

Key Features

• Multi-Asset Trading: Unlike the previous iteration, MT5 supports multi-asset trading, allowing users to trade not only Forex but also stocks, futures, and options, making it a one-stop shop for various trading needs.
• Better Market Depth: This gives traders a deeper insight into market dynamics and liquidity, helping them make more informed trading decisions.
• Economic Calendar Integration: MT5 includes an integrated economic calendar, allowing traders to keep track of important economic events that could impact the markets.
• MQL5 Programming Language: This new programming language introduces object-oriented programming, enabling developers to create more complex and efficient trading algorithms and tools.
• Enhanced Back-Testing and Strategy Testing Tools: MT5 offers advanced features for back-testing trading strategies, allowing traders to evaluate the performance of their approaches using historical data.
• Support for Exchange Trading: MT5 opens the door to exchange trading, broadening the opportunities available to traders.

MT4 vs MT5: What Are the Differences?

Each platform offers a unique array of features, benefits, and a loyal user base. In this analysis, we will conduct a thorough head-to-head comparison of MetaTrader 4 vs MetaTrader 5.

Trading Instruments

MT4: This platform caters predominantly to Forex traders, providing essential tools and resources for analysing currency pair fluctuations. It has been the go-to choice for many traders because of its straightforward interface and robust performance in these markets. 

MT5: In contrast, MT5 supports a much wider range of asset classes, not limited to just Forex and CFDs. It includes stocks, futures, and options, giving traders more options if they’re interested in diversifying their portfolios beyond currency trading. The capability to engage in various financial markets from a single platform can be a game-changer for those looking to get the most out of their trading.

Order Types

MT4: Offers a solid set of order types, including Market, Pending, and Stop orders. These are sufficient for many traders who need straightforward order execution. 

MT5: Takes it a step further by providing all the order types available in MT4, plus additional ones. These include Fill or Kill and Return orders, which allow for greater flexibility and precision in executing trades. This expanded functionality can benefit traders who manage complex strategies or high-frequency trading.

Charting Tools

MT4: Provides 31 charting tools, which include basic elements like lines, channels, Gann tools, Fibonacci retracement, and various shapes and arrows. These tools are sufficient for traders focusing on technical analysis and straightforward trading strategies.

MT5: Takes charting to the next level with 44 charting tools. In addition to Gann and Fibonacci tools, traders can utilise geometric shapes and channels to create intricate trading strategies. The added functionality allows for greater flexibility in analysis and the ability to conduct thorough market evaluations.

Timeframes

MT4: Provides traders with 9 different timeframes, ranging from M1 (1 minute) to MN (monthly), covering most strategies’ fundamental needs. 

MT5: Elevates this by offering 21 timeframes, including additional options like M2, M3, M4, M6, and so on. The increased variety allows traders to conduct more granular analysis and better capture market movements, catering to both short-term scalpers and long-term investors.

Technical Indicators

MT4: Comes equipped with 30 built-in MT4 technical indicators that help traders analyse price movements and trends. These tools are essential for developing and refining trading strategies. 

MT5: Expands this offering to 38 built-in technical indicators, plus a more user-friendly approach to integrating custom indicators. Traders can personalise their analysis tools and tailor them to their specific trading styles.

Economic Calendar

MT4: This platform’s limitation is its lack of an integrated economic calendar. Traders must rely on external sources to keep track of economic events and news that could impact their trading decisions.

MT5: Comes equipped with a fully integrated economic calendar. This feature allows traders to monitor economic events directly within the platform, making it easier to stay informed about potential market-moving news and adjust their strategies accordingly.

Fund Transfers Between Accounts

MT4: One drawback of this platform is that it does not support the transfer of funds between accounts. This can be inconvenient for traders who manage multiple accounts and need to move funds seamlessly.

MT5: Addresses this issue by allowing users to transfer funds between accounts, providing greater flexibility and convenience for those who operate multiple trading accounts.

Embedded MQL5 Community Chat

MT4: Another limitation of MT4 is the absence of the embedded MQL5 community chat feature. Traders cannot easily connect with others or access community support within the platform.

MT5: Includes an embedded MQL5.community chat, enabling traders to engage with other users, share experiences, and seek advice.

Symbols

MT4: Allows users to trade a maximum of 1,024 symbols. While this is adequate for many traders, it may not be sufficient for those looking to explore a broader range of assets.

MT5: Traders can access an unlimited number of symbols. This expansive capability opens the door to trading diverse financial instruments, catering to traders who want to broaden their investment horizons.

Netting

MT4: Does not support netting, which means that traders must close out positions individually, a process that can be tedious and less efficient.

MT5: Introduces the netting option, allowing traders to aggregate multiple positions into a single net position. This feature simplifies the trading process and is especially beneficial for those who engage in high-frequency trading.

Programming Languages

MT4: Uses MQL4, which supports the development of custom indicators and automated trading strategies but is relatively simpler and less flexible. 

MT5: Upgrades this to MQL5, which is more advanced and object-oriented. The new language allows for the creation of more sophisticated trading algorithms and tools, giving developers and traders more power to customise their trading experience.

Back-testing

MT4: Features single-threaded back-testing, which means it can only test one currency pair at a time. This limitation can slow down the strategy development process for traders focusing on multiple pairs. 

MT5: Offers multi-threaded back-testing across multiple currency pairs and timeframes, significantly speeding up the back-testing process and optimising their strategies efficiently. MetaTrader 4 vs 5 backtesting is particularly beneficial for those who want to rigorously test their algorithms under various market conditions.

Market Depth

MT4: Provides basic Level II pricing, which gives traders a glimpse of the bid and ask prices but lacks detail on market liquidity. 

MT5: Introduces advanced Market Depth with DOM (Depth of Market) functionality, allowing traders to see the full range of orders at different price levels. This feature provides a deeper insight into market liquidity, enabling more strategic decision-making.

Execution Models

MT4: Offers two execution models: Dealing Desk and No Dealing Desk. While this provides some options, it lacks the complexity found in MT5.

MT5: Enhances trading options by adding an Exchange execution model.

Similarities Between MT4 and MT5

While the two platforms serve different purposes and come with unique features, they share a number of similarities.

Demo Trading

Both MT4 and MT5 support demo trading. This feature allows traders to practise their strategies and familiarise themselves with the platform without risking real money. Users can access a virtual trading environment that mirrors real market conditions, enabling them to test their skills and strategies. 

Both platforms provide demo accounts with varying amounts of virtual currency, giving traders flexibility in their practice sessions.

Hedging Capabilities

Hedging allows traders to protect their investments by opening opposite positions in the market. MT4, as well as MT5 trading platform, provide the flexibility to hedge trades, offering traders a means to mitigate potential losses during volatile market conditions.

UX/UI

MT4 and MT5 are similar in terms of design and UI. While the main menu differs slightly between the two, the core functionalities that traders rely on remain consistent, including access to charts, technical indicators, and trading tools that are essential for market analysis. 

Additionally, both platforms allow for extensive customisation of the user interface. Traders can tailor the layout and appearance to better meet their individual trading needs, ensuring a more personalised experience.

Support for Multiple Platforms

MT4 and MT5 are designed to be versatile and accessible, supporting a variety of devices. Both platforms are available in three formats: desktop, mobile, and browser-based applications. The cross-platform availability ensures that traders can log in and execute transactions on the move or from home.

Which Platform is Right for You?

Deciding on the right platform is a personal decision that depends on one’s personal preferences and goals. Both MT4 and MT5 offer robust features and capabilities that can cater to different trading styles, strategies, and goals.

• If you are a Forex trader looking for a tried-and-proven platform with a simple interface and an extensive library of technical indicators, MT4 software may be the better option for you. 
• If you are interested in diversifying your portfolio with a wider range of assets or if you have more advanced programming skills and want to create complex trading algorithms, MT5 may be the ideal choice.

Closing Thoughts

Ultimately, the MetaTrader debate isn’t about declaring a definitive winner; rather, it’s about selecting the right tool tailored to your specific requirements and those of your clients. 

Whether you prefer the reliable MT4 or the feature-rich MT5, your success lies in how effectively you utilise the platform to deliver value to your clients and optimise your operations as a crypto or Forex broker or in how adeptly you navigate the financial trading markets as a trader.