Skip to content
Unlock the Secrets of Making Money with Bitcoin in 2024!
Subscribe And Get A Free Bitcoin Trading E-Book
- Home
- /
- Guides
- /
- Intermediate
- /
- MetaTrader 4 vs. 5:...
MetaTrader 4 vs. 5: Which Should You Choose?
Swen Keller
In the crypto world Swen has consistently found success through his effective communication skills and the unique ability to navigate the details.
Although it all comes down to your personal preferences and what you or your company needs, MetaTrader 5 clearly outperforms Metatrader 4. Metatrader 5 has more features and offers better and additional services than Metatrader 4 such as support for trading stock CFDs. Nonetheless, the two trading platforms have perks as well as drawbacks that we will discuss to help you choose the best option for you.
What is MetaTrader 4 or MT4?
Developed in 2005 by Metaquotes Software Corp, MT4 entered the global financial markets as a sophisticated online trading platform, popularized by its extensive features like user-friendly interface and customizability, attracting novice and experienced traders alike. Traders can execute trades, perform technical analysis, use custom indicators, and implement trading strategies using Expert advisors (EA).
What is MetaTrader 5 or MT5?
Metatrader 5 is the new and improved version of Metatrader 4, offering a broader range of features and services. For instance, in addition to Forex trading and CFDs, it supports commodities, cryptocurrency, options, stock trading, and other non-Forex CFDs. On top of that, trading strategies (for automated trading) and custom indicators (for technical analysis) designed using MT 5’s programming language (MQL5) are more advanced, yielding better results.
Table of Contents
Add a header to begin generating the table of contents
MT4 Vs MT5 - Differences Between Metatrader 4 & 5?
MetaTrader 5 (MT5) is the updated version of MetaTrader 4 (MT4), so in terms of functionality and features, it outperforms MT4 by a great degree. For instance, MT5 has more timeframes, supports a diverse set of assets, has more flexible technical indicators, and a wider variety of order types. However, it’s still not as widely supported by brokers as much as MT4 is, which makes it difficult to work with.
The differences between MT4 and MT5 are:
Programming language (MQL4 vs MQL5)
Both platforms offer custom programming languages, each with its own pros and cons. MT4 uses MQL4, a scripting language that allows you to create technical indicators and expert advisors. MT5 uses MQL5, which is more advanced. On top of achieving what MQL4 can, it has more capabilities like multithreaded strategy tester and object-oriented programming.
MQL5 also has a higher execution speed and greater efficacy when compared to MQL4. However, MQL4 is considered to be much easier to use than MQL5. Moreover, since it has been in use for a longer duration of time, it has more resources available, is widely adopted, and is supported in nearly all trading platforms.
Supported Asset Classes
MT4 mainly supports Forex pairs, indices and a smaller range of commodities and cryptocurrencies for trading. It was created primarily to handle Forex trading but has grown to support other forms of trading, like Forex CFDs (Contract For Difference) and a limited number of stocks and commodities. MT5, on the other hand, offers a more diverse set of financial markets, like trading additional CFDs (including non-Forex CFDs), options, stocks, and more. This makes MT5 better suited if you want to expand your horizon beyond Forex trading.
Hedging & Netting
Hedging is a risk management strategy that traders use as a safeguard against sudden price movements that can result in losing money rapidly. In MT4, you can simultaneously hold both buy and sell positions for the same asset. However, this can get complicated as both buy and sell positions are independent of each other. Because you have both a “buy” and a “sell” position open at the same price, it becomes challenging to accurately track your profit and loss.
MT5 offers a simpler solution called Netting. Netting allows all your positions to be accumulated in one place and calculates your overall profit/loss, giving you a straightforward answer. Traders prefer this mode because it gives them a clear direction of what to do next.
TimeFrames
The time span of a price chart displaying data about an asset or currency. Timeframes provide traders with historical information about a financial asset. These can be short timeframes of 1-minute- or 5-minute, mainly used for day trading or scalping. Traders use longer timeframes of 1 day or 1 month for long-term predictions and trends in the asset.
MT4 offers timeframes ranging from 1-minute to 1-month, in a total of nine time frames: 1-minute, 5-minute, 15-minute, 30-minute, 1-hour, 4-hour, 1-day, and 1-month. MT5 expands on this with a total of 21 timeframes, providing a more detailed view of the price movements.
Technical Indicators
Indicators help visualize market trends using algorithmic trading. Meaning, that it uses mathematical calculations to predict whether the market will fall or rise and help traders make decisions objectively. MT4 is loaded with highly accurate indicators such as Moving Average Convergence/Divergence (MACD), Relative Strength Index (RSI), and Average True Range (ATR).
The technical indicators in MT5 were built on top of those in MT4. While comparing MT4 vs MT5, MT4’s indicators are more rigid, not allowing for much customization. MT5 on the other hand, gives users more granularity in price analysis, allowing them to create their indicators from any source, with visual representation in whatever form the users understand best (unlike MT4, which only allows you to perceive data in the form of charts).
Economic Calendar
An economic calendar is a handy tool that keeps traders updated on upcoming events or major changes (like economic policies). It helps traders prepare for the future to prevent potential losses and customize their approach to leverage the market in their favor.
MT4 does not have a built-in Economic calendar, while MT5 does. So, if you plan on using MT4, an easy solution is to use a third-party economic calendar, which is widely available on the internet and free to use. Examples include FXStreet and Daily FX.
Depth of Market (DOM)
A widely used tool in the financial markets, it displays the real-time order book of an asset and provides a detailed view of its supply and demand, as well as liquidity. Although it can get complicated, every trader must know how to read and comprehend a DOM table to make sound and lucrative decisions and use safeguarding tools like stop-loss orders and take-profit orders. DOM is very popular amongst traders who are looking for short-term benefits like scalping.
MT4 does not offer Depth of Market, while MT5 does. This makes certain trading strategies less compatible with MT4. Regardless, most traders use MT4 in conjunction with external market tools to enhance their trading experience and mitigate this disadvantage.
Strategy Tester
Strategy testers are tools most popular amongst novice traders, as it helps them make better judgment and understand how the market works. It allows users to backtest their customized trading robots (Expert Advisors) in a simulation to see if they are working as expected.
Both MT4 and MT5 offer strategy testers, however, there are some key differences.
MT4’s Strategy Tester supports a single currency only, while MT5’s Strategy Tester allows you to test it on multiple currency pairs.
MT4’s strategy tester offers limited timeframes, while MT5 offers an expanded timeframe.
MT4 does not support multithreaded strategy tester, while MT5 does. (This feature is used to speed up complex algorithms using multiple CPUs)
Once implemented, there is limited scope of optimization in MT4. In contrast, MT5 lets users finetune and make their robots more precise.
MT5 bots can use custom data sources to make decisions, while MT4 bots can only use the parent database.
Number of Order Types
Order types are instructions that traders can use when purchasing or selling assets. They act as a sort of safety net against market price fluctuations. There are various types of orders, each with its own distinct advantage.
MT4 accommodates Market Orders and Pending Orders (which include Buy limit, Buy stop, Sell limit, and sell stop), Stop Loss Orders, and Take Profit Orders, for a total of 4.
Aside from the ones MT4 offers, MT5 adds 2 more order types to its list: Buy stop limit and Sell stop limit.
Please keep in mind that, of all the order types, traders should be familiar with at least Take Profit and Stop Loss, as they provide the most protection against losing a significant portion of your investment. Learn more about them here.
Position Management Tools
When you open positions in financial markets, you aim to maximize your investment and profit from it. Trading platforms provide users with a variety of tools that they can use to profit from their investments.
Both MT4 and MT5 offer these tools to mitigate the risks involved in trading, but MT5’s tools are slightly more advanced.
Time and Sales
Time and Sales is a feature that shows detailed data on the trades going on in a market. It is an excellent way of perceiving market sentiment, which makes it a commendable feature for short-term gains. MT4 does not have a built-in time and sales feature, but MT5 does.
MQL Community
MT4 has played an important role in forex trading and garnered much support from the MQL4 community. This is evidenced by the vast number of custom indicators traders share on the platform. On the other hand, while the MT5 community is growing, it is still nowhere near that of MT4. However, it is expected to take over due to its increasing adoption and flexibility.
Cons of MT4
In comparing MT4 vs MT5, while there is no doubt that in terms of functionality, MT5 is better than MT4, it still has some setbacks that can limit the trading experience of investors.
Difficult to Navigate: Less User-friendly Interface
While great for experienced traders, novice traders can find themselves overwhelmed by the complexity of the features of MT5. In fact, if used incorrectly, novice investors can lose money. Therefore, unless you understand the market well, it is not advisable to use MT5. On the other hand, beginner traders can start trading on MT4 without much difficulty.
Incompatible with MT4
Since there is a huge library for technical indicators in MT4, traders would like to import these over the MT5 platform to optimize them and increase their efficacy. However, this is not how it works. To make these robots compatible with MT5, you will need to design and modify them, and the work can be as extensive as building one from scratch.
Not Supported By All Brokers
Perhaps this is the most significant setback of using MT5. Most Forex brokers and CFD providers still only use MT4 rather than MT5. Partly because they’ve already invested so much resources in them, and partly because it is simpler to use.
Resource Intensive
To run the features of MT5’s extensive programming language, you’ll need a computer with good computing power. Traders operating on older, outdated systems face performance issues when using MT5, limiting their activity on the platform.
Final Verdict: What Should You Choose?
There is no doubt that when it comes to execution and operations, MT5 reigns supreme over MT4:
MT5 offers more features than MT4.
MT5 is more advanced than MT4.
MT5 allows users to conduct a more thorough and comprehensive fundamental analysis of the market.
MT4 mainly centers around the Forex market, while MT5 covers many more financial instruments giving it greater trading capabilities.
Therefore, if you want to trade outside the forex market, your best bet is MT5.
But, if your main goal is to trade forex, then you should go with MT4, as:
It has more brokers and trading opportunities,
The majority of Forex traders operate on MT4,
Countless pre-designed robots for automated trading,
Countless pre-designed charting tools for market analysis.
FAQ
Most frequent questions and answers
In the debate of MT4 vs MT5, people prefer MT4 because it is easier to use, has a larger community base, and is compatible with existing custom indicators and expert advisors (EAs).
No. While MT5 did come as an advanced version of MT4 to replace it, there were not enough driving factors for traders to switch platforms. To this day, MT4 is listed at the top of most popular trading platforms, and it doesn’t look like it’ll be going away anytime soon.
No. MT4 and MT5 are different trading platforms, and accounts can not be linked. You’ll need to set up different accounts if you’d like to use them both. Data/investment can not be exported between MT4 and MT5 directly. For any fund transfer, you’ll need to search for a broker who supports both MT4 and MT5.
Metatrader 5, or MT5, is a free-to-use, multi-asset trading platform that can be downloaded to your computer or phone. While free of cost, you’ll still have to pay fees to the broker for any trade you make.
Yes. You can make accounts on both MT4 and MT5. However, these accounts are entirely independent of each other and do not work in conjunction.
No. You must open a live account with a broker who supports Metatrader 4. Metatrader is a trading software that connects to your brokerage’s servers, allowing you to access and trade various financial instruments, such as forex, stocks, commodities, and more.
Skrumble.com provides all its content for informational purposes only, and this should not be taken as financial advice to buy, trade, or sell any investment instruments or products, including but not limited to cryptocurrencies, or use any specific exchange. Please do not use this website as investment advice, financial advice, or legal advice, and each individual’s needs may vary from that of the author. Investing in financial instruments, including cryptocurrencies, carries a high risk and is not suitable for all investors. It is possible to lose the entire initial investment, so do not invest what you cannot afford to lose. We strongly advise conducting your own research before making any investment decisions. This post includes affiliate links with our partners who may compensate us.
To view our privacy policy read here.