MetaTrader 4 and MetaTrader 5 are both popular forex trading platforms; however, if you are confused about which is better, MT4 or MT5, this article is for you.
Well, if you are thinking that MT5 is just a modified version of MT4, you are getting it wrong. Both of these platforms offer different functionalities and features for trading purposes. The use of these platforms depends on your trading goals and other factors.
These platforms offer various tools for trading currencies and other financial instruments. This article will compare the functionalities and features of MT4 and MT5. Read until the end to choose the right platform for successful trading.
What is MetaTrader 4?
MetaTrader 4, or MT4, is one of the popular forex trading platforms which professional and beginner traders leverage. Moreover, the platform was developed and released in 2005 by MetaQuotes Software.
The platform offers excellent trading opportunities to all traders, such as advanced technical analysis, Expert advisors, flexible trading systems, and mobile applications. MT4 has quite a friendly user interface, which is customizable by traders. It comes with all the required tools and features which a trader needs for their trading strategies.
You can also trade a variety of other markets except Forex, such as indices, commodities, stocks, and metals.
What is MetaTrader 5?
MetaTrader 5 was also developed by MetaQuotes Software and released in 2010 with more advanced trading features than MetaTrader 4. It is available for Windows, Linux, and Mac and also offers mobile applications for its traders. An individual can open two trades simultaneously, allowing traders to trade multiple assets at once.
Furthermore, the platform is much faster and more flexible than MT4. However, MT5 is much less popular than MT4 because of its user-friendly interface and easy-to-use features.
Although, if you are experienced enough with charting tools and others, MT5 is the right choice for you. MT5 comes with advanced trading and technical analysis tools for professional traders.
Differences of MT4 vs MT5
In this section, we will highlight the main difference between these platforms. Let’s check it out!
Technical Indicators
Technical indicators are vital tools used by traders in forex trading. It helps them identify price movements and make profitable decisions. As for MetaTrader 4, it comes with 30 technical indicators for its traders. In contrast, MetaTrader 5 has 38 technical indicators, beating MT4 in this.
DeMakers, Stochastic Oscillator, and Ichimoku Kinko Hyo are popular MetaTrader 5 indicators used by traders. Bollinger Bands, Moving Average, and Relative Strength Index are also various famous technical indicators on both platforms, which traders leverage. Traders can choose from a wide variety of indicators based on their trading strategies and preferences.
Timeframes
Timeframes are specific duration or time intervals in Forex, which traders analyze and use. There are long, short, and medium time frames in MT4 and MT5. MT4 can only display nine timeframes M5 (5 minutes), M15 (15 minutes), M30 (30 minutes), H1 (1 hour), H4 (4 hours), D1 (Daily), W1 (Weekly), and MN (Monthly).
In contrast, MT5 has 21 times frames for its traders for different minutes and hours. For minutes time frames, it has M1, M2, M3, M4, M5, M6, M10, M12, M15, M20, and M30. And for hours time frames, it has H1, H2, H3, H4, and H6, daily, weekly, and monthly.
Pending Orders
In Forex, the term pending orders refers to the order placed by the trader whether to buy or sell a currency pair in the future. In MetaTrader 4, four types of pending orders are available for the traders: Buy Limit, Sell Limit, Buy Stop, and Sell Stop. While MetaTrader 5 comes with two extra pending orders, such as Buy Stop Limit and Sell Stop Limit.
It is important for traders to carefully monitor the market vitality before placing pending orders on any currency pair. It is not always guaranteed that the price will move up or down.
Economic Calendar
An economic calendar is a vital tool traders use to monitor upcoming economic events. It helps them in making informed trading decisions. The MetaTrader 4 does not come up with an economic calendar, which is a lack part. But, you can use another alternative for getting info about macroeconomic and financial events.
In contrast, MetaTrader 5 comes with an integrated economic calendar for its traders. This tool helps the trader to stay informed about economic indicators, central bank announcements, and important economic news. It is a must-have tool for all types of traders on Forex or any other financial market.
Depth of Market
The depth of the market is another crucial tool that forex traders leverage for successful trading. The DOM helps traders to understand if the market is liquid or not. It displays the current buy and sell orders and volume for a given currency pair or asset. It also shows the number of market, limit, and stop loss orders.
Unfortunately, MetaTrader 4 does not have this feature for its traders. Nevertheless, some brokers might provide their own versions of the DOM or other tools that can display comparable market-depth data on the MT4 platform. In comparison to Metatrader 5, it gives access to Depth of Market for the traders.
Hedging
It is called hedging when a trader opens a buy and sell order or has multiple positions in the same currency pair. And netting is the opposite of hedging. MetaTrader 4 and MetaTrader 5 both come with hedging features for their traders.
On MT4, you can enable hedging and simultaneously open multiple positions in the same currency pair. Also, the profits and losses from each open position are calculated separately. There are two accounting modes on Metatrader 5, netting mode and hedging for trading. The hedging system is the same on MT5, just like MT4. However, if the netting system is enabled, traders can open only one position (long or short). It means opening a new position in the same currency will close the current position.
Programming Language
MT4 and MT5 utilize their own custom programming language. MetaTrader 4 is based on MQL 4 as its programming language. It is a high-level C-type language used to develop different indicators within the MT4. Moreover, it does not have that much complexity as compared to the MT5 programming language. That is why most of the traders on MT4 are beginners or amateurs.
MT5, by contrast, utilizes MQL 5 as its programming language. This programming language offers more advanced functionalities and capabilities, which include multi-trading, network communication, EAs, and creating scripts for strategic trading within the MT5 platform.
Demo Trading
MetaTrader 4 and MetaTrader 5 both have demo trading available. It helps traders get familiar with the platform, functionalities, and technical indicators. You can trade on any currency pair and apply different trading strategies without having a risk of losing capital. Furthermore, demo trading is essential for kind of traders.
It works like a real account, where traders can evaluate the platform and understand the market conditions. Charts, technical indicators, order types, and other trading tools are all available for traders to study and practice with the demo account on these platforms. In addition, you can gain experience in trading and the platform.
Graphical Objects
MT4 and MT5 both have graphic objects for their traders to enhance their trading strategy, improve technical analysis, and present visual elements on the chart. It also helps traders to analyze the patterns and annotate the charts.
MetaTrader 4 has 31 graphical objects, such as Fibonacci tools, shapes, arrows, and more, to identify the price movements of any asset. MetaTrader 5, in contrast, has 44 graphical objects for the traders. There are Gann, Fibonacci, geometry shapes, and Elliott tools available. These tools are for pro and experienced traders who are working on this platform.
Pros and Cons of MetaTrader 4 and MetaTrader 5
Pros of MT4:
- User-friendly and intuitive interface for beginner and amateur traders.
- Easy to use platform for every type of trader.
- Stable and easily accessible platform.
Cons of MT4:
- No DOM (Depth of Market) is available.
- Limited timeframes for the traders.
- No built-in economic calendar for the traders.
Pros of MT5:
- This platform is faster than MT4.
- Advance technical indicators for its traders.
- More graphical objects and economic calendar integration.
Cons of MT5:
- A complex platform for beginner traders.
- Not as popular as MT4.
Conclusion
Ultimately, it depends on the user’s expertise and level of which platform to use. MetaTrader 4 and MetaTrader 5 are both excellent trading platforms. Although, if you are a beginner and amateur trader, we recommend you go with MT4. In contrast, as a skillful trader, you should go with MT5 as it is a platform with advanced trading tools, timeframes, and indicators and implement different strategies.