The Metatrader 4 trading platform is very well known and can definitely be said to set the industry standard. I have never seen a Forex broker that does not either offer trading directly through the platform or through an in-house bridge to the platform, although this can be at the cost of a slightly higher spreads and/or commissions.The Metatrader 5 trading platform is somewhat less commonly offered, although it is produced by the same company (the Cyprus-based MetaQuotes Software Corporation).
To understand why this is the case, we need to take a closer look at the platform.
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MT4 or MT5 Which Trading Platform is Better for You?
The answer to this question should seem pretty clear by now after reading the below MT4 and MT5 comparison. If you have to comply with U.S. regulations for whatever reason, want to do a great deal of back testing using the platform offline or want access to stock and commodities exchanges that are hard to reach through Metatrader 4, then Metatrader 5 is your obvious choice.
It has to be said that otherwise, there is no reason not to use Metatrader 4, which remains a tried and tested gold standard platform of the industry. It is far more popular than Metatrader 5, and for good reason: it is easy to use and manage and has generally less glitches than its browser-based competitor platforms.
What is MT4?
MT4 is the leading algorithmic Forex trading platform. It also has an embedded copy trading service. MT4 stood the test of time, as it presents the most versatile trading infrastructure, upgradable via 25,000+ custom indicators, templates, and EAs. It also supports traditional account management via MAM/PAMM accounts and forms the cornerstone of thousands of financial firms with trillions in monthly trading volumes.
What is MT5?
MetaTrader 5 (MT5), released in 2010, is often mistakenly considered an upgrade to MetaTrader 4 (MT4), but it was designed for different purposes. MT5 allows trading in markets beyond Forex, like stocks and commodities, by integrating with centralized exchanges. It also complies with the U.S. "no hedging" rule, requiring first-in, first-out (FIFO) execution. MT4, by contrast, supports hedging, which is preferred by traders outside the U.S. For U.S. traders, MT5 is compliant with regulations, but the lack of hedging features frustrates many global traders.
What is the Difference Between MT4 and MT5?
The two major differences have already been covered, but there are a number of others worth mentioning within any MT4 and MT5 comparison.
Programming Language
MT4 uses MQL4, while MT5 uses MQL5, which allows "black box" programming and is generally easier to use for developing trading robots and expert advisors.
Back Testing Speed
MT5 offers faster execution of back testing for trading strategies compared to MT4, saving time for users who run multiple tests.
Multi-Currency Back Testing
MT5 supports simultaneous back testing on multiple currency pairs, which MT4 does not offer.
Backward Compatibility
MT4 programs (written in MQL4) cannot run on MT5, meaning there's no backward compatibility.
Potential for Future Upgrades
While MQL4 was expanded in 2014 to include some features of MQL5, future upgrades are more likely to focus on MQL5, with MQL4 potentially not receiving updates.
There are some additional minor differences between the two trading platforms that it is worth being aware of:
MT4 | MT5 | |
|---|---|---|
Markets | Forex, CFDs | Forex, Futures, Stocks, Bonds, Options |
Technical Indictors | Fewer | More |
Graphical Objects | Fewer | More |
Pending Order Types | Fewer | More |
Order Fill Policy | Fill or Reject | Fill or Reject, Immediate or Cancel, Return |
Partial Order Fill Policy | No | Yes |
Email System | No Attachments | Allows Attachments |
Fund Transfer Between Accounts | No | Yes |
Netting | No | Yes |
Exchange Trading | No | Yes |
MetaTrader 4 Pros & Cons
Below are the pros and cons of the MT4 trading platform, which traders should consider before making an MT4 vs. MT5 decision.
MT4 pros
- Algorithmic trading
- API trading
- 24/7 market access via VPS hosting
- Most versatile trading platform
- Copy trading
- Mobile trading
- MAM/PAMM accounts
- Widespread availability
MT4 cons
- Outdated user-interface
- MetaQuotes stopped MT4 support.
MetaTrader 5 Pros & Cons
There are many MT4 vs. MT5 similarities, and below are the MT5 advantages and disadvantages over MT4.
MT5 pros
- More timeframes
- More technical indicators
- More graphical objects
- Improved back-testing capabilities.
- Integrated economic calendar
- More order types
- Partial order fill policy
- E-mails with attachments
MT5 cons
- Fewer upgrades
- Limited availability
Can You Use Both MT4 & MT5?
Before making an MT4 vs. MT5 decision, traders should know they can use both trading platforms from the same device. Many well-established Forex brokers offer MT4 and MT5, while newer entrants into the competitive brokerage scene rely solely on MT5. It is an excellent combination for traders using multiple accounts with different strategies, as they can have both trading platforms open. Traders cannot open more than one MT4 or MT5 platform from the same broker on the same device.
Forex brokers offering MT4 and MT5 allow frictionless account management via their back office, including intra-account transfers between MT4, MT5, and all sub-accounts.
Will MetaTrader 4 be Phased Out?
MetaQuotes Software has tried to phase out MT4 since launching MT5 in 2009, but MT4 remains widely supported by brokers, traders, and developers. Although official support for MT4 has ended, it may take over a decade to fully phase it out.
For MT5 to become the sole platform, MetaQuotes would need to shut down MT4 servers and licenses, which could drastically impact business. Brokers may still find ways to keep MT4 running. Despite MT5's 15-year presence, MT4 remains more popular, partly due to the backward incompatibility of custom indicators and EAs between MQL4 and MQL5.
Which is a Better Platform for Beginners?
With backward comparability essentially an option, beginners should consider MT5 unless they want to use some of the 25,000+ MT4 custom indicators, templates, and EAs MT4 unavailable on MT5. Both trading platforms ensure traders have the necessary tools.
A Trader's Perspective
Most seasoned traders will tell you that all they want from a trading platform is something that is reliable easy to use, intuitive, and doesn’t crash. They will also tell you that although Metatrader 4 might have a few annoying features, it works well enough, and allows them to stay on top of their trades and charts at the same time. As the choice of broker is really more important than the choice of platform, all the platform-centered advertising and Metatrader reviews are mostly just gimmicks that are best overlooked since practically every broker offers access to Metatrader 4.
