MT4 vs MT5: Which is better for your trading strategy?
MetaQuotes, the original developer, created both MetaTrader 4 (MT4) and MetaTrader 5 (MT5). MT5 has been actively promoted as a replacement for MT4. However, despite these efforts, the popularity of MT4 remains significantly popular and continues to be in demand from both brokers and clients. MT5 was created in 2010, while MT4 has been around for almost 20 years, having been developed in 2005.
While MT5 differs from MT4, the differences are not substantial. The basic concepts are the same; both platforms allow users to execute trades in the market and provide tools for visualizing price action and trading activities.
What are the main differences between MT4 and MT5?
There isn't a single dominant difference between MT4 and MT5. MT5 was developed later and offers more features compared to MT4; however, MT4 remains relevant and popular.
Most literature states that the biggest difference is that MT5 is designed to operate with a wider range of assets beyond just Forex. It is better suited for various asset classes and offers more indicators, additional timeframes and a more advanced programming language. MT5 also incorporates features such as an economic calendar and market depth to observe real-time order volumes. Furthermore, MT5 boasts greater efficiency and speed, making it an expanded version of MT4.
MetaTrader 4 vs. MetaTrader 5: Key differences
The key differences between MetaTrader 4 (MT4) and MetaTrader 5 (MT5) include:
Order Types
- MT4 supports four types of pending orders: buy stop, buy limit, sell stop, and sell limit.
- MT5 offers six types of pending orders, including the four from MT4 as well as buy stop limit and sell stop limit.
Technical Indicators
- MT4 provides 30 built-in technical indicators.
- MT5 offers 38 built-in technical indicators.
Timeframes
- MT4 provides nine timeframes for charting.
- MT5 includes 21 timeframes.
Market depth
- MT5 features a built-in market depth (Depth of Market) tool, which displays liquidity available at different price levels.
Trading instruments
- MT4 is primarily designed for Forex trading.
- MT5 supports a wider range of financial instruments, including stocks, futures and options.
Economic calendar
- MT5 includes an integrated economic calendar for better fundamental analysis, which MT4 lacks.
Programming language
- MT4 uses MQL4 for developing custom indicators and automated trading strategies.
- MT5 uses MQL5, which has more advanced features and supports object-oriented programming.
Hedging and netting
- MT4 allows hedging.
- MT5 supports both hedging and netting, simplifying account management.
Efficiency and speed
- MT4 has limited efficiency compared to MT5, which is also faster.
Graphical objects
- MT4 includes 31 graphical objects.
- MT5 offers 44 graphical objects.
Is MT5 better than MT4?
MT5 is faster (though the difference may not always be noticeable), has more features and is more up-to-date. MT5 is designed to be faster than MT4, given that it is newer and has more applications. However, that doesn't necessarily mean it is "better." If the majority of traders believed that MT5 was significantly superior, MT4 would likely no longer exist and brokers wouldn't offer it. Yet, years later, many traders still choose MT4 over MT5.
For many users, several of the extra features that MT5 offers are not ones they utilize. Therefore, for those users, both platforms may seem equivalent. Due to the apprehension of encountering something new in MT5, they opt to continue using the familiar MT4.
Ultimately, the question for a trader should be, "What is better for me?" rather than "Which is better overall?" Even if MT5 is faster and offers more tools, some may prefer MT4 simply because they are accustomed to it, because the tools they use are sufficient, or for other reasons.
MT4 or MT5: Which one is better for beginners?
Commentators suggest that it is better to start with MT4 rather than MT5, but this isn’t necessarily the case. While MT5 is often criticized for being more complex, the differences in interface and instruments are not so significant that beginners must start with MT4.
MT5 incorporates tools, especially for advanced users, but it does not remove the basic tools that can be useful for beginners. Therefore, there isn't a clear advantage of one over the other for beginners. While some assert that MT4 is much simpler, the reality is that both platforms are beginner-friendly. The best approach for a beginner is to download both and decide which is better for them. They might start with MT4 and prefer it, or the opposite could happen.
A beginner interested in trading futures and other assets will have more options using MT5 than MT4. However, it’s a common misconception that MT4 only includes Forex; the available assets depend more on the broker than on the version of MetaTrader. It is true that many brokers promote the use of MT5 and offer more assets with it than with MT4.