If you’re involved in forex trading, you probably have at least some familiarity with the Metatrader 4 and 5 platforms. These software solutions rank among the most popular trading platforms for a wide range of traders and advisers, thanks in large part to the value of their trading tools and resources when evaluating positions and taking action.
Although their names might suggest that MT5 is an updated version of this trading platform, the reality is that these two solutions offer different functions and features that serve distinct trading audiences. Choosing whether to use MT4 vs. MT5 can depend on your background and your trading goals, among other factors.
Here’s a look at how these platforms differ, and how to choose the right one for you.
Accommodating Different Types of Traders
The biggest overall difference between MT4 and MT5 is the types of traders they tend to attract. MT4 was designed specifically for forex traders, and its features and functionality reflect this. MT5 has broader applications in contract-for-difference (CFD), stock, and futures trading. As a result, it has a broader range of features that may not be relevant to every trader—but if you trade multiple types of assets, it could provide better value for your trading goals.
Chart Time Frame Offerings
MT4 was built for simplicity. Casual and beginner traders likely don’t need access to complex and granular time frame data, which makes MT4 the easier, simpler option, providing the resources you need and none of the complicated features you don’t.
But some traders—as well as certain types of trades, such as CFDs—benefit greatly from access to these less commonly used time frames. More experienced traders might consider this information crucial to executing well-informed trades. MT4 offers nine different time frames for analysis, while MT5 bumps this number up to 21.
Number of Order Types
MT4 offers four basic order types: buy stop, buy limit, sell stop, and sell limit. MT5 offers these along with two others: a buy stop-limit and sell stop-limit order. This gives traders greater flexibility in how price movement triggers buys and sells. Experienced traders may frequently use this order type, but it’s likely to be utilized less often by beginners and casual traders.
MT4 and MT5 each use their own custom programming language, which provides different trading capabilities and customizations depending on your trading needs. From a trader’s perspective, what’s most important to understand is that the MT4 programming language is simpler in design, but it requires some additional steps on the user side when it comes to developing a trading program.
MT5, by contrast, has a more complex programming language, but it also offers the ability to write or alter scripts. Trades can also be executed with a single function, and the system itself is considered easier to use on the whole than MT4.
As you consider whether MT4 vs. MT5 is a better fit for your needs, pay attention to smaller criteria that may affect your trading experience. For example, both platforms offer hedging in certain trades, but only MT5 offers netting. MT5 also offers slightly more technical indicators than MT4, as well as tools such as an economic calendar to track relevant news from various foreign markets.
MT5 also offers features such as a multi-threaded strategy tester, fund transfers between accounts, and an embedded community chat. These features won’t matter to every trader, but you’ll want to evaluate your own needs to determine if this functionality offers any value.
Ultimately, the choice between MT4 and MT5 is a matter of personal preference. To determine the best solution, look at your own trading habits and preferences and consider which solution offers a better fit for your needs.
Many beginning traders prefer the simplicity and stripped-down features of MT4, while MT5 tends to attract more experienced traders seeking expanded resources and platform versatility.
Keep in mind, too, that you might start out benefiting most from MT4, only to realize later on that you’re ready to switch over to MT5. Wherever you’re at in your trading career, make sure your platform of choice is going to serve your trading goals.
The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.