MT4 (MetaTrader 4) and MT5 (MetaTrader 5) are popular trading platforms widely used by retail traders and brokers for online trading in various financial markets, including forex, stocks, commodities, and indices. Here’s a brief overview of MT4 and MT5:
MT4 (MetaTrader 4) Platform
MT4 is a trading platform developed by MetaQuotes Software and released in 2005. It quickly became one of the most widely used trading platforms in the world. MT4 offers a user-friendly interface with intuitive navigation and customizable charting tools. MT4 trading platform provides a range of technical analysis tools, indicators, and charting capabilities to help traders analyze market trends and make informed trading decisions. The automated trading features allows traders to develop and implement automated trading strategies using its proprietary programming language, MQL4. Traders can create custom indicators, scripts, and Expert Advisors (EAs) to automate their trading. It is available on mobile applications for iOS and Android devices, allowing traders to access their accounts, monitor markets, and execute trades on the go.
MT5 (MetaTrader 5) Platform
MT5 is the successor to MT4, released in 2010. While it retains many features of MT4, MT5 offers additional capabilities and improved performance. MT5 trading platform also provides access to a broader range of financial instruments, including forex, stocks, commodities, indices, and cryptocurrencies. This makes MT5 suitable for multi-asset trading. MT5 introduced the option for both hedging and netting modes. Hedging allows traders to open multiple positions in the same instrument, both long and short, simultaneously. Netting mode consolidates positions in the same instrument into a single position. MT5 offers additional order types, including stop limit orders, market depth (Level 2) functionality, and the ability to place buy stop limit and sell stop limit orders.
Both MT4 and MT5 platforms have their strengths and are widely used by traders and brokers globally. The choice between the two depends on individual preferences, trading strategies, and the specific features and asset classes required for trading.
MT4 vs MT5: Key Differences
While they share similarities, there are key differences between the two:
Market Availability
MT4 has been available since 2005 and has a larger user base and market presence compared to MT5, which was released in 2010. As a result, MT4 has a broader range of compatible indicators, expert advisors (EAs), and trading tools developed by the trading community.
Asset Classes
MT4 primarily focuses on foreign exchange trading and offers access to various currency pairs. In contrast, MT5 platform provides access to a wider range of financial instruments, including stocks, commodities, indices, and cryptocurrencies, making it a more versatile platform for multi-asset trading.
Hedging Capability
MT5 introduced the option for “hedging” positions, allowing traders to hold multiple positions in the same instrument, both long and short, simultaneously. MT4, on the other hand, only supports “netting” mode, where positions in the same instrument are consolidated into a single position.
Order Types
MT5 offers additional order types compared to MT4. In addition to market and pending orders, MT5 supports “Stop Limit” orders, “Market Depth” (Level 2) functionality, and the ability to place “Buy Stop Limit” and “Sell Stop Limit” orders.
Timeframes
MT5 introduces more timeframes than MT4, providing more flexibility for traders to analyze price movements. MT4 offers 9 timeframes, while MT5 offers 21 timeframes, including more precise intervals like 2 minutes, 8 hours, and 12 hours.
Strategy Testing
MT5 features a more advanced strategy testing environment. It allows for multi-threaded optimization, enabling faster and more efficient back testing of trading strategies. MT5 also supports more sophisticated testing parameters, including genetic algorithms.
Platform Architecture
MT5 has a more modern and updated architecture compared to MT4. It is designed to handle larger volumes of trading operations, supports more advanced charting capabilities, and provides enhanced execution speed.
Conclusion
When choosing between MT4 and MT5, consider your trading preferences, asset class preferences, and the availability of specific features and tools that are important to you. It’s worth noting that while MT5 offers more advanced features and broader asset class coverage, MT4 still remains popular among traders due to its large user base, extensive community support, and compatibility with a wide range of trading resources.
