MetaTrader 4 vs. MetaTrader 5: A Comprehensive Comparison
Introduction
Having the right trading platform is crucial for success. MetaTrader, developed by MetaQuotes Software, is a leading choice among traders worldwide. As the industry evolved, two major versions emerged: MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Both platforms offer powerful tools and features, but they have distinct differences that can significantly impact a trader’s experience and strategy. In this in-depth blog post, we will compare MT4 and MT5, highlighting their key differences, features, and provide insights from a trader’s perspective to help you decide which trading platform suits you best.
What is the Difference Between MT4 and MT5 Metatrader?
MetaTrader 4 (MT4):
MetaTrader 4, released in 2005, quickly became one of the most popular trading platforms in the retail forex market. It is renowned for its user-friendly interface, extensive charting tools, and customizability. MT4 is widely embraced by forex traders for its stability and straightforward approach to trading. Here are the key features of MT4:
User Interface (UI):
- MT4 has a simple and intuitive interface, making it easy for beginners to navigate and execute trades efficiently.
- The platform offers a wide range of pre-installed technical indicators and charting tools, enabling traders to perform detailed analysis.
Order Execution Types:
- MT4 supports four types of order execution: Market Execution, Instant Execution, Request Execution, and Exchange Execution.
- Traders can easily execute market orders and pending orders, giving them greater control over their trades.
Programming Language:
- MT4 uses MQL4 (MetaQuotes Language 4) for programming custom indicators, scripts, and Expert Advisors (EAs).
- MQL4 is relatively easier to learn compared to MQL5, which appeals to traders with coding experience and those starting to explore algorithmic trading.
Compatibility:
- MT4 is compatible with Windows, macOS, and Linux operating systems.
- Additionally, traders can access MT4 through the MetaTrader 4 WebTrader, enabling them to trade from any web browser without installing the software.
MetaTrader 5 (MT5):
MetaTrader 5, introduced in 2010, is the successor to MT4, designed to enhance the trading experience and cater to a broader range of financial instruments. MT5 retains the user-friendly features of MT4 while introducing new tools and expanded functionalities. Here are the key features of MT5:
User Interface (UI):
- MT5 features an updated and more modern interface compared to MT4.
- The platform allows traders to open multiple windows within a single terminal, facilitating analysis of multiple assets simultaneously.
Order Execution Types:
- MT5 retains the four order execution types of MT4 but introduces two additional order types: Fill or Kill (FOK) and Immediate or Cancel (IOC).
- These additional order types offer more flexibility in trade execution.
Programming Language:
- MT5 uses MQL5 (MetaQuotes Language 5), which is a more advanced programming language compared to MQL4.
- MQL5 supports object-oriented programming, making it more suitable for complex trading strategies and advanced EAs.
Compatibility:
- MT5 is also compatible with Windows, macOS, and Linux operating systems.
- Similar to MT4, traders can access MT5 through the MetaTrader 5 WebTrader for web-based trading.
Comparing Key Features
1. Asset Diversity
One of the primary differences between MT4 and MT5 is the range of financial instruments available for trading. MT4 mainly focuses on forex trading and offers a limited selection of CFDs (Contracts for Difference) on commodities and indices. In contrast, MT5 expands its asset diversity, allowing traders to access a broader range of markets, including stocks, commodities, indices, cryptocurrencies, and futures contracts.
For traders who wish to diversify their portfolios and explore different markets, MT5 provides a more comprehensive solution.
2. Timeframes and Charting Tools
Both MT4 and MT5 offer a wide array of timeframes for chart analysis, ranging from one minute to monthly. However, MT5 introduces more timeframes, including 2, 3, 6, and 12-hour timeframes, which may be advantageous for traders seeking alternative perspectives on price movements.
Additionally, MT5 provides 21-time frames for charts, while MT4 offers only 9. This expanded charting functionality allows traders to conduct more in-depth technical analysis and develop well-informed trading strategies.
3. Depth of Market (DOM) Feature
MT5 incorporates a Depth of Market (DOM) feature, also known as Level 2 Market Depth. This feature displays real-time bid and ask prices, showing the liquidity available at different price levels. DOM is especially valuable for traders employing scalping strategies or those who require a deeper understanding of market dynamics.
In contrast, MT4 lacks the DOM feature, which may limit the visibility of market liquidity for some traders.
4. Hedging and Netting
MT5 offers both hedging and netting systems for trade position management. Hedging allows traders to open multiple positions in the same instrument, both long and short, which is useful for risk management and strategies that involve multiple positions.
On the other hand, MT4 uses the netting system, where each asset can have only one open position at a time. While this may be sufficient for certain trading styles, it restricts the flexibility for more complex trading strategies.
5. Economic Calendar
MT5 comes with an integrated Economic Calendar, providing traders with real-time updates on economic events, news releases, and other significant market-moving announcements. This feature enables traders to stay informed about critical events that can impact their positions.
While MT4 lacks the built-in Economic Calendar, traders can access external calendars through the platform or other sources.
A Trader's Perspective
To gain a better understanding of how traders perceive MT4 and MT5, let’s explore the opinions of traders who have used both platforms:
Advantages of MT4:
- User-Friendly Interface: Many traders appreciate the simplicity and ease of use of MT4, particularly for beginners.
- Extensive Community and Resources: MT4’s popularity has led to a vast community of traders and developers, resulting in a rich ecosystem of indicators, EAs, and scripts available for download or purchase.
- Compatibility with Older Systems: Some traders prefer MT4 because it runs efficiently on older computer systems and requires lower hardware resources.
Advantages of MT5:
- Advanced Features: Traders who require sophisticated trading tools and advanced technical analysis capabilities often prefer MT5 due to its expanded range of features.
- Asset Diversity: MT5’s wider range of tradable instruments appeals to traders looking to diversify their portfolios and explore different markets.
- Powerful Programming Language: Experienced traders and developers favor MT5’s MQL5 for its advanced capabilities in creating complex EAs and custom indicators.
- Economic Calendar: The built-in Economic Calendar in MT5 is valued by traders who prioritize staying informed about economic events.
Which Trading Platform Is Better for You?
The choice between MT4 and MT5 ultimately depends on your individual trading preferences, strategies, and goals. Here are some factors to consider when making your decision:
Choose MT4 if:
- You are new to trading and prefer a simple and user-friendly interface.
- You primarily trade forex and do not require a wide range of asset classes.
- You prefer a larger community of traders and readily available resources like indicators and EAs.
- You do not need advanced programming capabilities for developing custom trading tools.
Choose MT5 if:
- You seek access to a diverse range of markets, including stocks, commodities, and cryptocurrencies.
- You need advanced charting tools, additional timeframes, and a Depth of Market feature for comprehensive technical analysis.
- You have experience in coding and want to create complex EAs or custom indicators with MQL5.
- You value staying informed about significant economic events through the built-in Economic Calendar.
Conclusion
In conclusion, both MetaTrader 4 and MetaTrader 5 are powerful trading platforms with their unique strengths. Traders should carefully consider their trading style, asset preferences, and technical requirements before deciding which platform best aligns with their needs. Both platforms offer demo accounts, allowing traders to test their features before making a final choice.
Remember, the key to successful trading lies in continuous learning, adapting to market conditions, and developing a solid trading strategy that suits your individual goals.