CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider.

You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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We’re excited to share that we’re gearing up for an update to our Client Portal, aimed at improving your experience with us. Client Portal will be unavailable to you from market close on Friday 16th February, 2024, and should be back up and running before markets open on Sunday 18th February, 2024.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider.

You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Exploring the Differences Between MetaTrader 4 and MetaTrader 5: A Comprehensive Comparison

In this article, we will look at the differences between two trading platforms: MetaTrader 4 (MT4) and MetaTrader 5 (MT5).
logos of mt4 vs mt5

Updated April 2024 by Aaron Akwu.

MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two of the most popular trading platforms in the world, each offering unique features and capabilities. In this article, we’ll look into the key differences between MT4 and MT5, covering various aspects such as pricing, educational resources, third-party integrations, security features, compatibility, and switching between the two platforms.

Table of Contents:

 

What is MetaTrader 4?

metatrader4-logo

MT4 was released in 2005 and immediately became an extremely popular trading platform. It is versatile and can be accessed from various devices, including your phone, laptop, and tablet. MT4 has a specific focus on forex trading, but you can also trade commodities and index instruments using a CFD (Contract for Difference).

 

What is MetaTrader 5?

metatrader5-logo

MT5 was released in 2010 and has slowly increased in popularity, with many traders citing improved functionality and increased adaptability. MT5 has similar levels of mobility to MT4 and can be accessed from most devices. It can be used to trade forex, stocks, and futures.

 

What are the Differences between MT4 and MT5?

 

Pricing and Costs

 

Brokers typically offer MetaTrader 4 (MT4) and MetaTrader 5 (MT5) for free. However, traders should know the other costs of using these platforms, such as spreads, commissions, and overnight financing fees. While the platforms are free, traders may incur expenses based on their trading activity and the broker’s fee structure. Some brokers may offer tighter spreads or lower commissions for trading on one platform than the other. Hence, traders need to compare costs when selecting a broker and platform.

 

Educational Resources and User Support

 

  • MT4, the older and more established platform, boasts a wealth of educational resources, tutorials, and user support forums available online. These resources cover various topics, including platform navigation, chart analysis, technical indicators, and expert adviser (EA) development. Additionally, many brokers provide comprehensive training materials and customer support services tailored to MT4 users.
  • On the other hand, while MT5 also offers educational resources and user support, the availability and depth of materials may not be as extensive as those for MT4. However, as MT5 gains traction in the market, more educational resources and user support options are becoming available.

 

Third-party Add-ons and Integrations

 

  • MT4 has a thriving ecosystem of third-party add-ons, plugins, and integrations developed by independent providers. These tools extend the platform’s functionality and cater to various trading styles and strategies. For example, traders can find custom indicators, automated trading systems, trade copiers, and risk management tools designed to enhance their trading experience on MT4.
  • MT5 also supports third-party add-ons and integrations, so the selection may be more limited than that of MT4. However, MT5 offers built-in features previously only available through third-party plugins on MT4, such as additional timeframes, an economic calendar, and more advanced charting tools.

 

Security Features

 

Both MT4 and MT5 prioritise the security of traders’ accounts and data. These platforms employ industry-standard security measures, including encryption protocols, secure login procedures, and protection against unauthorised access. MT5, being the newer platform, may offer more advanced security features than MT4. For example, MT5 includes two-factor authentication, which provides an extra layer of protection by requiring users to verify their identity using a second factor, such as a code sent to their mobile device. Additionally, MT5’s modern architecture may offer better protection against cyber threats like malware and hacking.

 

Compatibility

 

Both MT4 and MT5 are designed to be compatible with most internet browsers, including Google Chrome, Mozilla Firefox, and Microsoft Edge. Additionally, they are available as desktop applications for Windows and macOS, allowing traders to access their accounts and trade from their computers. Furthermore, both platforms offer mobile apps for iOS and Android devices, enabling traders to monitor the markets and execute trades. This compatibility ensures traders can access their accounts and trading tools seamlessly across multiple devices and platforms.

 

Switching Between MT4 and MT5

 

Transitioning from MT4 to MT5 or vice versa typically involves installing the desired platform and transferring trading account data. While the process is relatively straightforward, traders may encounter interface, features, and functionality differences between the platforms. For example, MT5 offers additional timeframes, economic calendar integration, and more advanced charting tools than MT4. Therefore, traders may need to adjust their trading strategies and familiarise themselves with the new platform’s capabilities. Some brokers offer tools or assistance to facilitate the transition for their clients, such as platform tutorials, webinars, and personalised support from customer service representatives. Additionally, traders should consider any potential impacts on their existing trading strategies, expert advisors, and custom indicators when switching platforms.

 

Trading Community and Marketplaces

 

  • MT4 has a well-established community of traders, developers, and brokers that offer various custom indicators, expert advisers, and trading strategies. Traders can access the MetaTrader Market to purchase or download free indicators and EAs developed by third-party vendors.
  • MT5 also has a growing community and marketplace. Still, it may not be as extensive as MT4’s due to its relatively shorter time in the market. However, as MT5 gains popularity, more developers are creating custom tools and offering them on the MetaTrader market for traders to use.

 

Back-testing and Optimisation

 

  • MT4’s strategy tester allows traders to back-test and optimise their trading strategies using historical data. While MT4’s back-testing capabilities are sufficient for most traders, it may need some of the advanced features available in MT5.
  • MT5 offers a more advanced strategy tester with additional features like multi-threaded optimisation and genetic algorithms. This allows for faster and more accurate back-testing of trading strategies and more efficient parameter optimising.

 

Charting Tools and Timeframes

 

  • MT4 provides various charting tools and timeframes for technical analysis, including chart types (line, bar, and candlestick charts) and multiple timeframes (M1, M5, H1, and D1).
  • MT5 builds upon MT4’s charting capabilities by offering additional chart types, such as Renko and Range bars, as well as more timeframes, including tick charts and 21 different timeframes for custom analysis.

 

Platform Customisation

 

  • MT4 allows traders to customise their trading environment by creating personalised templates, setting up custom indicators and scripts, and arranging chart windows and toolbars according to their preferences.
  • MT5 offers even more customisation options. Using MQL5, traders can create custom indicators and scripts and customise the platform’s appearance and layout to suit their trading style.

 

Market Depth and Depth of Market

 

  • MT4 does not offer built-in market depth or depth of market features, which provide insights into a particular instrument’s supply and demand dynamics.
  • MT5 includes a market depth feature, also known as depth of market (DOM), which displays the current bid and ask prices and the volume available at each price level. This information can help traders make more informed decisions, especially in fast-moving markets.

 

Multi-Currency Strategy Testing

 

  • MT4’s strategy tester allows traders to test their trading strategies on multiple currency pairs simultaneously, but each test must be conducted separately.
  • MT5’s strategy tester offers multi-currency testing. It allows traders to test their strategies across multiple currency pairs simultaneously, saving time and resources when optimising trading algorithms.

 

Trading

 

  • MT4 primarily focuses on forex trading and offers a single hedge and netting account system. It supports market orders, pending orders, stop orders and customisable trading strategies using expert advisers (EAs).
  • MT5 expands on MT4’s capabilities by offering multi-asset trading, including forex, stocks, futures, and cryptocurrencies. It features a more flexible hedging system that allows traders to open multiple positions in the same instrument and an improved order execution system with additional order types, such as market depth and partial fills.

 

Analytics

 

  • MT4 provides basic technical analysis tools, including various built-in indicators, charting options, and drawing tools. However, its analytics capabilities could be improved compared to MT5.
  • MT5 offers enhanced analytics tools, including more built-in technical indicators, graphical objects, and analytical objects. Additionally, MT5 provides access to an economic calendar, news feed, and market depth feature, allowing for more in-depth analysis of market trends and conditions.

 

Risk Strategy

 

  • MT4 allows traders to implement risk management strategies through customisable stop-loss and take-profit orders, trailing stops, and pending orders. However, risk management options may be limited compared to MT5.
  • MT5 offers advanced risk management features, such as setting stop-loss and take-profit levels directly from the order execution window and the option to hedge positions within the same instrument. Additionally, MT5 includes a built-in economic calendar and news feed, which can help traders make more informed decisions and manage risk effectively.

 

Usage

 

  • MT4 has a more user-friendly interface and is easier to navigate for traders who are new to the platform. Retail traders widely use it, and it is well-known for its simplicity and reliability.
  • MT5 has a more advanced interface with additional features and functionalities, which may require a learning curve for traders transitioning from MT4. While MT5 offers more flexibility and versatility, some traders may find it more complex than MT4.

 

Programming Language

 

  • MT4 uses MQL4 (MetaQuotes Language 4) for programming custom indicators, scripts, and expert advisers. MQL4 is a simpler and more widely adopted programming language, making it easier for traders to find and use pre-built tools and resources.
  • MT5 introduced MQL5 (MetaQuotes Language 5), a more robust and versatile programming language than MQL4. MQL5 offers additional features, such as support for object-oriented programming and access to more built-in functions and libraries, allowing for more complex and sophisticated trading strategies and tools.

 

Performance

 

  • MT4 is known for its stability and fast execution speed, making it suitable for high-frequency trading and scalping strategies. However, its performance may be limited when handling large volumes of data or running multiple automated trading systems simultaneously.
  • MT5 offers improved performance compared to MT4, thanks to its multi-threaded strategy tester and optimised code execution. It can handle larger volumes of data and support more sophisticated trading algorithms, making it suitable for advanced traders and institutional investors. Additionally, MT5’s architecture allows for faster back-testing and optimisation of trading strategies.
Feature MT4 MT5
Markets Forex Forex, stocks, futures, bonds, options
Executions Execution on request, execution by market, instant execution Execution on request, execution by market, instant execution, exchange execution
Orders Buy/sell stop orders, buy/sell limit orders Buy/sell stop orders, buy/sell limit orders, buy/sell stop limit orders
Timeframes 9 21
Graphical Objects 31 44
Technical Indicators 30 38
Economic Calendar No No
Community Chat No Yes
Risk Management Hedging Hedging and Netting
Strategy Tester Single-thread strategy tester Multi-thread strategy tester
Programming Language MQL4 MQL5

 

Tabular Comparison of MetaTrader 4 (MT4) and MetaTrader 5 (MT5)

 

MT4 and MT5 Pros

 

Aspect MT4 Pros MT5 Pros
Release Date Established platform with a long history and large community. Modern and faster platform with more advanced features.
User Interface Familiar and easy-to-use interface for most traders. Enhanced interface and customization capabilities.
Order Types Standard order types available. Advanced order types (e.g., trailing stop, depth of market).
Timeframes Nine timeframes. 21 timeframes, offering more flexibility for different strategies.
Technical Analysis Extensive library of indicators and tools. Expanded library of indicators and tools.
Programming Language MQL4 (less complex and widely known). MQL5 (more powerful and versatile).
Back-testing Basic backt-esting capabilities. Improved back-testing with more precise simulations.
Market Access Primarily forex and CFDs. Limited to the asset classes supported by the broker.
Community & Support Large and active community with many resources. May receive less support as the focus shifts to MT5. Smaller community compared to MT4.
Multi-Currency Testing Not available. Allows testing on multiple currencies simultaneously.
Strategy Testing Can test one asset at a time. Can test multiple assets simultaneously.

MT4 and MT5 Cons

Aspect MT4 Cons MT5 Cons
Release Date Legacy platform with older technology and less frequent updates. Smaller user base compared to MT4.
User Interface Limited advanced customization options. It may take time for MT4 users to adapt to MT5.
Order Types Limited order types and risk management tools. Some traders may find it complex.
Timeframes Limited selection of timeframes. Too many timeframes may be overwhelming for some users.
Technical Analysis Fewer indicators than MT5. There may be too many options for some traders.
Programming Language Limited features compared to MQL5. Newer language may be less familiar for some traders.
Back-testing Slower and less accurate backtesting. Requires more resources and may be more complex.
Market Access Supports a wider range of assets (e.g., stocks, futures). Not all brokers offer the same range of assets on MT5.
Community & Support A growing community with active support and resources.
Multi-Currency Testing N/A Requires more computational resources.
Strategy Testing N/A More complex setup for some traders.

 

Conclusion: Differences Between MetaTrader 4 and MetaTrader 5

 

In conclusion, MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are powerful trading platforms with strengths and weaknesses. Traders should carefully consider their trading goals, preferences, and requirements when choosing between the platforms. While MT4 may be more suitable for beginner traders and those focused primarily on forex trading, MT5 offers additional features and functionalities that cater to more advanced traders and investors seeking a broader range of assets and trading opportunities. Ultimately, the choice between MT4 and MT5 depends on individual preferences, trading strategies, and the specific requirements of each trader.

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