Table Of Contents
MT4 vs. MT5: Which MetaTrader Platform is Better
Last Update: 2024-11-16
No matter who your broker is and what trading platforms they use, it is likely that you have heard of MetaTrader and its two flagship trading vehicles, MetaTrader4 (MT4) and MetaTrader5 (MT5).
The MetaTrader platforms are proprietary tools that belong to MetaQuotes Software Corp, one of the leading developers of software applications in the world for brokerages, exchanges and banks. MT4 and MT5 have become staples in the online trading world for their longevity, user friendliness, speed of execution, and advanced tools.
From the outset, it is important for us to say that it is a misnomer to compare MT4 directly against its sister product MT5. This is because while some of their services overlap, they were created for different purposes. Each serves a different market, and their growth and development have been led by trader demands and industry trends in those markets.
So, contrary to widespread belief, MT5 is not a direct upgrade of MT4. The sequential naming may suggest that one product is phasing out another because we have become accustomed to sequential names of products like smartphones being a proxy for a later model improving on an older one. This is not the case with the two MetaTrader platforms.
MT4 is one of the founding platforms on which FOREX traders cut their teeth. This purpose-built FOREX platform still enjoys a position of hard-earned industry pre-eminence. MT5, on the other hand, was created to provide investors with access to other instruments, such as contracts for difference (CFD) in stocks, futures and more.
In this article, we will try to provide a comparison of the two platforms in as far as their features are directly comparable. We will also tell you about the crucial differences between the two platforms and offer guidance on how you can best use them to reach your trading goals. The article will be divided as follows:
- What is the Difference between MT4 and MT5?
- Which Platform is Best for Me?
- What Types of Assets Can I Trade on Each Platform?
- Mobility
- Analytics
- Algorithmic Trading
- Programming Languages
- Frequently Asked Questions
MT4 vs. MT5: What is the difference?
The main difference between the two platforms is that MT4 is a one-instrument platform that has been designed for FOREX traders. For those who know about the history of trading, FOREX trading was originally the realm of industry professionals and financial experts who were trying to use their knowledge to make more money. However, as FOREX trading became more popular and grew into the retail-trader phenomenon it is today, MT5 came onto the scene as a platform designed to offer more diverse tools like access to trade stocks and futures.
So, MT5 is not and never was a direct upgrade on MT4, but merely the result of the market’s need for a more comprehensive platform to cater to the increasing range of trading instruments. Today, while MT4 is a specialist FOREX platform, MT5 caters to FOREX, futures, options, stocks and bonds.
MT5 was launched in 2010, five years after the already-successful MT4 had entrenched itself in the FOREX trading landscape. The sequential resemblance of the platform names made people assume that one was a successor to the other. This was not the case. Yes, they shared near-identical branding and the same overall graphical interface, but this could hardly be avoided as they were part of the same product family.
MT5’s job was to take up parts of the market that MT4 was not built to handle. As FOREX is the largest and most liquid market in the world, with trillions of US Dollars in trades exchanging hands every day, it was best not to meddle with a successful product like MT4. Thus, MT5 was designed to facilitate better access into the centralized exchanges that handle large products like stocks and commodities. Some trading instruments, like stocks and futures, are run by a small number of influential role players, like stock exchanges and dominant commodity trading houses.
FOREX, on the other hand, is a decentralized marketplace with several different players offering distinct and complementary services. These could be commercial banks, sovereign wealth funds, liquidity providers of all descriptions and hedge funds, to name but a few. As such, it can be seen from the design intent behind each platform that they are not as foundationally related as many people believe.
| MT4 | MT5 |
| FOREX only | FOREX, futures, options, stocks and bonds |
| Number of order execution types – 3 | Number of order execution types – 4 |
| Number of pending order types – 4 | Number of pending order types – 6 |
| Technical indicators – 30 | Technical indicators – 38 |
| Timeframes – 9 | Timeframes – 21 |
| Economic calendar – not available | Economic calendar – available |
Is MT4 or MT5 Better for Me?
The short answer is that if you are strictly a FOREX trader, then MT4 can serve your needs perfectly. However, if you are trading a more diversified basket, then MT5 comes into the picture. The idea that MT4 is for novice traders and MT5 is for advanced traders still exists, but it is mistaken. The bottom line is in what the two platforms specialize. To determine which platform is best for you, consider which solution offers a better fit for your needs.
In less-informed circles, there is an idea that MT4 is an old system on its way out. This is not the case as it remains a well-trusted platform in the industry for good reason. Today, MT4 is used by more traders around the world than those who use MT5. As the more established system, MT4 is less prone to performance issues, as these bugs have been fixed over its many iterations.
It may be slightly unpopular for comparison Websites to say, but as a novice FOREX trader, you will hardly notice the difference between the two platforms if you use them solely to trade FOREX. After all, is there a telling difference between the 30 indicators offered by MT4 and 38 indicators offered by MT5? However, in time, as your experience improves, you will come to appreciate that each platform more than covers its bases. It just comes down to what you want to trade.
There is one pertinent question to be answered on this matter though. What if you intend to start by trading FOREX only, but you plan to expand your basket? In this case, it would be appropriate to begin with MT5, as it will support your growing needs and you will not have to master two platforms by starting with MT4 and transitioning to MT5. However, if you avowedly plan to concentrate on FOREX trading, then MT4 can handle all your needs from the outset.
What Types of Assets Can I Trade on Each Platform?
As we have said, what you plan to trade will have a major bearing on the platform you choose. MT4 speaks for itself and will not need an introduction to FOREX traders. MT5 has more applications in terms of CFDs, stocks and futures trading. Naturally, a cursory glance at the MT5 user interface will reveal that it has more features than MT4, but this is simply because it caters to a greater number of distinct markets.
A side-by-side comparison of the two platforms is almost a moot exercise as each platform has sufficiently differing design intent and features that it would be akin to comparing the feature list of a sedan vehicle to a four-wheel-drive car. The better direct comparison for MT4 would be to compare the category equivalent offered by a trading platform rival like TigerTrade or thinkorswim. The same goes for MT5.
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MT4 vs. MT5 Featured Highlights
However, for what it is worth, we will list the headline features of each platform to give you a sense of how much more comprehensive MT5 needs to be to cover its markets, as opposed to MT4, which is more specialized.
MT4 Top Features
- Number of order execution types – 3
- Number of pending order types – 4
- Technical indicators – 30
- Timeframes – 9
- Economic calendar – not available
- Reporting – tables only
MT5 Top Features
- Number of order execution types –4
- Number of pending order types – 6
- Technical indicators – 38
- Timeframes – 21
- Economic calendar – available
- Reporting – tables and charts, exportable to Excel
Mobility of MT4 vs. MT5
Most modern traders need to trade on the go. Which of the two platforms supports trading better? There is not much to choose between the two platforms in this sense as each platform has grown and developed in step with the ever-changing needs of the modern trader. Neither can be faulted for its mobile capability.
Both platforms are fully mobile and can be accessed from the Google Play Store or the Apple App Store. You can also normally find the app download buttons on your chosen broker’s Website. Login is simple and can be done via a conventional password or using a biometric option such as a fingerprint.
It is only natural that the mobile versions of each platform come in a more feature-light form than the desktop versions. However, MetaQuotes is constantly improving both platforms to take them as close to full functionality as is possible and necessary. Some of the most important mobile features supported are:
- Technical analysis tools.
- Real-time pricing.
- Trading insight from charts.
- Trading directly from charts.
- Access to a full range of technical indicators.
- Multiple asset classes can be traded.
- All trading order types supported.
Market commentary and analysis tools.
MT4 vs. MT5 Analytics
Is one platform better than the other around analytics? Today’s trader can hardly advance in their career without the benefit of advanced analytics to help them make better decisions and be a more consistent and rational investor. Does either platform lag in this area?
Neither of these tools can be criticized as each continues to be developed to remain in touch with the market and to retain its lead. Each platform is equally comfortable at allowing users to customize the interface to suit trading needs while providing powerful and meaningful analysis via an array of indicators and tools.
MT4 has a narrower focus, but still packs a punch with timeframes, multiple chart types, and strong technical indicators. MT5 naturally carries more features and analytics options. For example, MT5 offers an important market depth feature that allows traders to see the bidding levels in markets in which they are interested.
In keeping with the broader focus on MT5, this platform does outdo MT4 in terms of drawing tools, with several Fibonacci studies and Elliot wave drawing tools’ waves. However, it is important to note that as advanced as these features are, they are financial-instrument specific, and may not be of any use to a FOREX trader. Both platforms give traders access to financial news, although only MT5 has an economic calendar.
Algorithmic Trading: MetaTrader 5 vs. MetaTrader 4
With algorithmic trading growing in popularity, which platform provides the better automated trading system? Using increasingly common “trading robots,” algorithmic or automated, trading has become a must-have feature for many traders.
Both MT4 and MT5 are written in a programming language that allows traders to implement the strategy of their choosing using an Expert Advisor (EA). These programming languages also allow traders to deploy copy trades and social trading.
Algorithmic trading is one of the best features in both platforms. There is not much to choose between them. Traders can develop and test EAs and technical indicators. Using a handy development environment, traders can use a tool called MetaEditor to design and pilot trading strategies. In the marketing speak of the MetaTrader product pages, “Your indicator analyzes the markets, while an Expert Advisor trades in them.”
Programming Languages of MT4 vs. MT5
MT4 and MT5 each use their own programming language. These give you different trading capabilities depending on what you are seeking. Initially, MT4 was thought to be best for beginner traders. These types of traders typically were not interested in formulating their own scripts or algorithms as part of a trading strategy. Therefore, MT4’s programming language was not as speedily developed in its early days.
MT5 was launched with a more intricate programming language, known as MQL5, which gave users the ability to write scripts. MQL5 is known to have a much better logical format for stakeholders like developers and traders to work with. Seeing the positive user response to MQL5, MetaQuotes has since developed MT4’s programming language MQL4, which has also since gained a reputation for being highly logical and user-friendly.
That said, the two platforms and their respective languages are not as compatible as you might think, even though they come from the same stable. As such, MT4 programs cannot run on MT5. The downside is that traders who wish to transition to MT5 from MT4 must become accustomed to a whole new setup.
Many users agree that MT5 has an edge over MT4 in terms of programming usability:
- MT5 backtesting is much slicker and faster than that of MT4. With MT5, you can test your strategies in record time, getting you back into the markets sooner as you try to find the best iteration of the strategy that will work for you.
- MT5 also permits multi-thread and multi-currency back tests, while MT4 is only designed for single-thread testing. In a fast-moving marketplace like FOREX, these are crucial advantages.
Conclusion
Ultimately, choosing between MT4 and MT5 is not the binary choice many traders have been led to believe. MT4 is a powerful and market-leading FOREX platform with dependable and recognizable software. MT5 is more advanced, but has been built to serve more markets, and this has inevitably led it to become more feature-rich.
Some online brokers who primarily concentrate on FOREX will only offer MT4, making the choice for you. However, many more brokers offer you the choice between the two platforms. The decision about which platform to choose with comes down to a range of factors:
- Do you intend to concentrate on FOREX only?
- Do you intend to enter more markets?
- To which platform is your online broker more aligned? Some brokers commission bespoke versions of MT4 or MT5 with plugins designed to give them an edge against rivals.
- How important is technological advancement to you? This may push you toward MT5 for the comfort of knowing you have the newest platform.
