MetaTrader is a well-known chart analysis and forex trading platform founded by MetaQuotes in 2000. The company has released five versions of the software, but now only uses the MT4 and MT5 platforms. In 2022, more than 20 years later, these platforms are still the most popular and are being updated all the time. The company plans to release updates to these products in the future because of user interest. But the debate over the merits of MetaTrader 4 vs MetaTrader 5 has not stopped. Here’s a look at how these platforms differ and how to choose the right one for you.
In 2005, MetaQuotes first released MetaTrader 4 (MT4), a platform dedicated to forex trading. The interface is designed to make trading easier, but also provides a variety of tools for professional traders: flexible orders, various chart and time frame Settings, analytical tools and dynamic tracking news, position management, development of automated trading systems, and many other important options to make trading fx easier.
MetaTrader 5 looks almost identical to MT4, has very similar features and is not as easy to use, but it is designed for stock market trading and has some advanced options. Metatrader5 (MT5) was first released in 2010. In addition to currencies, the new platform allows users to trade any other asset: stocks, bonds, oil, gold, etc. MetaTrader 5 supports CFDS, futures and options.
Both MetaTrader 4 and MetaTrader 5 offer flexible setup and high order processing speed. MetaTrader uses its own high-performance servers, so orders can be executed well with minimal delays and delays.
Basic built-in features provide traders with everything they need to trade on an exchange. Both products have tools to test trading systems created by traders or downloaded from the MQL5 community site, using historical data and without capital risk. This is an undeniable advantage, especially for beginners, who may lose their investments without any trading experience.
Although their names might suggest that MT5 is just an updated version of MT4, the reality is that these two solutions offer different functions and features that serve distinct trading audiences. Choosing whether to use MT4 versus MT5 can depend on your background and your trading goals, among other factors.
The biggest overall difference between MT4 and MT5 is the type of traders the platform attracts. MT4 is designed specifically for currency traders and its features and functionality reflect this. For this reason, MT4 is the software platform of choice for forex-focused traders.
MT5 is more widely used in contracts for Difference (CFD), equities and futures trading. As a result, it has a wider range of features and may not be suitable for every trader, but if you trade multiple types of assets, it can provide better value for your trading objectives. Keep in mind that while you can still trade fx using MT5, the capabilities and tools for analyzing FX charts are not as powerful, so performance may be sacrificed when you use MT5 for this type of trading.
The Financial Information Exchange (FIX) API is an important tool for traders to obtain real-time information related to financial securities. Both market regulators and traders use the FIX API to share important information before and after trades, as well as information about confirming new orders and executing trades.
The FIX API integration provides many benefits to traders. Most importantly, when traders trade on platforms that provide integration with the FIX API, they have better access to financial information, and the format of this information has been standardized to simplify communication across any language barriers. The FIX API also makes it easy to build black box strategies or private algorithms to assist forex trade analysis.
If you want to use the FIX API, you need to use the MT4 trading platform. MT5 does not provide FIX API integration.
MT4 is built for simplicity. Amateur and novice traders may not need to access complex granular timeframe data, which makes MT4 an easier choice, providing the resources you need without the complex features you don’t need.
With MT4, traders can choose from nine different time frames for chart analysis. By contrast, MT5 offers 21 different time frames, representing a huge expansion of the MT4 product. For many traders, these customizable options are unnecessary. But some traders, and certain types of trading, such as CFDS, can benefit greatly from these less commonly used time frames. A more experienced or diversified trader might see this information as crucial to executing well-informed trades.
MT4 provides four basic order types: buy stop, buy limit, sell stop and sell limit. For most traders, these order types are sufficient to execute your trading strategy while minimizing your exposure and increasing control over how you enter and exit your positions.
MT5 provides these and two others: buy stop loss orders and sell stop loss orders. This gives traders more flexibility in how price changes trigger buying and selling. These order types may be frequently used by experienced traders, but they may be rarely used by beginners and casual traders.
MT4 and MT5 each use their own custom programming languages to provide different trading functions and customizations based on your trading needs. However, on the MT4 platform, the bigger assumption is that traders will seek a platform that can be quickly installed and started, requiring a minimum of steps to set up features or develop a trading program.
This makes MT4 ideal for novice or amateur traders, or those who are not interested in creating their own scripts or algorithms to support their own trading strategies. MT5, by contrast, has a more complex programming language, but it also provides the ability to write or modify scripts.
On MT5, transactions can also be performed through a single function, which is different from the user experience provided by MT4.
As you consider the merits of MT4 versus MT5, be aware of the small criteria that may affect your trading experience. Both platforms offer hedges on certain trades, for example, but only MT5 offers net, and some traders rely heavily on it to control their relative exposure.
MT5 also offers slightly more technical indicators than MT4, as well as tools like an economic calendar to help you keep track of relevant news from different foreign markets. However, these extended offerings also lead to more complex platforms and a larger learning curve.
MT5 also offers multithreaded policy testers, inter-account fund transfers and embedded community chat features that MT4 does not offer. These features are not important to every trader, but you need to evaluate your needs to determine if they have any value.
Ultimately, when it comes to MT4 and MT5, the choice is a matter of personal preference. To determine the best solution, look at your trading habits and preferences and consider which solution is best for your needs.
Many novice traders prefer the simple and streamlined nature of MT4, while MT5 tends to appeal to more experienced traders who are looking for expanded resources and platform diversity.
Also keep in mind that you may benefit most from MT4 initially, only to realize later that you are ready to switch to MT5. No matter where you are in your trading career, make sure the platform you choose serves your trading objectives.
No matter which one you choose, remember to prepare an MT4 or MT5 VPS so that your trading can run uninterruptedly.