Forex Trading Tools

MT5 vs MT4 – Key Differences Between MetaTrader Platform Types

Mt4 Jpg

MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two of the most popular online trading platforms used by retail forex traders and brokers worldwide. Developed by MetaQuotes Software, MT4 was released in 2005 and quickly became the industry standard. MT5 emerged in 2010 as the next-generation platform, boasting additional features and capabilities.

For experienced MT4 users considering an upgrade to MT5, understanding the key differences between the two platforms is essential. This comprehensive guide examines the core features, tools, pros and cons of MT4 vs MT5 to help you determine the best choice for your needs.

Introduction

The MetaTrader platform revolutionized retail forex trading by providing traders with an intuitive, feature-rich interface for analyzing financial markets and managing trades. Over 15 years since the initial launch of MT4, both platforms continue leading the industry.

MT5 was designed to eventually supersede MT4 with expanded functionality, including support for additional assets classes beyond just forex. However, MT4 remains widely used, especially among more experienced traders hesitant to switch platforms.

Below we dive into the key similarities and differences between MT4 and MT5 across critical factors like technology, tools, supported markets, automation, and more. Understanding the capabilities of each platform empowers you to choose your ideal trading solution.

Technical Features and Capabilities

Under the hood, MT5 represents a major overhaul to the underlying technology of MetaTrader. Let’s look at some of the core technical capabilities of each platform:

Programming Languages

  • MT4: MQL4 programming language
  • MT5: MQL5 programming language which includes object-oriented programming (OOP)

The change to MQL5 and OOP allows for more advanced custom indicators and Expert Advisors on MT5.

Market Execution

  • MT4: Uses outdated instant execution model
  • MT5: Implements modern market execution with price requotes if price changes

Market execution provides accurate pricing and depth of market information. This results in reduced re-quotes and slippage on MT5 compared to MT4.

Pending Orders

  • MT4: 6 pending order types
  • MT5: 9 pending order types

Additional order types like Buy Stop Limit and Sell Stop Limit allow advanced order management.

Maximum Trade Volume

  • MT4: Trade volumes limited to 100 lots per trade
  • MT5: Increased max volume of up to 1,000 lots per trade

The increased volume allows large, high-volume trades on MT5.

Tick History

  • MT4: Saves only 1-minute tick intervals in history center
  • MT5: Saves full tick-by-tick history for precise backtesting

Complete tick data improves backtesting accuracy on MT5.

Timeframes

  • MT4: Supports 9 different timeframes (M1, M5, M15, M30, H1, H4, D1, W1, MN1)
  • MT5:Adds over 20 flexible timeframes including minutes, hours, days, weeks, months

Expanded time flexibility suits various trading strategies.

Testing Environments

  • MT4: Strategy Tester for backtesting
  • MT5: Strategy Tester plus MQL5 Cloud Network for advanced backtesting

MT5’s cloud-based strategy testing platform runs distributed computing for complex backtests.

Customization

  • MT4: Limited customizability of interface colors and charting
  • MT5: Increased customization options and built-in chart templates

MT5 allows deeper UI customization and chart templates to save layouts.

Tools and Analysis Features

In addition to under-the-hood technical improvements, MT5 also expanded the feature set available to traders. Let’s compare the key analysis tools and functionality of MT4 vs MT5:

Charting

  • MT4: Basic charting capabilities and few indicators
  • MT5: Advanced charts with more analytics plus integrated Trading Central technical analysis

Trading Central integration and 100+ indicators give MT5 a charting advantage.

Market Depth Information

  • MT4: No market depth data available
  • MT5: Level II pricing shows market depth for exchange-traded assets

This provides insights into liquidity and potential support/resistance.

Built-in Technical Studies

  • MT4: 30+ technical indicators and analytical tools
  • MT5: 44 technical indicators plus an additional 64 analytical objects
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Expanded technical toolbox on MT5 for deeper market analysis.

Time and Sales (Tape)

  • MT4: None
  • MT5: Time & Sales (tape) shows real-time tick data

Helpful for gauging market sentiment and activity.

Hotkeys

  • MT4: Limited hotkeys for basic trade management
  • MT5: Advanced customizable keyboard hotkeys

Hotkeys improve order execution speed.

Trade Terminal

  • MT4: Basic terminal with tabbed interface
  • MT5: Advanced customizable multi-window terminal

Enhanced terminal offers one-click trading and drag-and-drop management.

Strategy Testing

  • MT4: Basic strategy backtesting only
  • MT5: Advanced backtesting, optimization, model quality reports

MT5 testing tools enable more robust EA development and analysis.

Algorithmic Trading

  • MT4: Requires programming knowledge to code EAs (Expert Advisors)
  • MT5: Visual Strategy Builder for drag-and-drop algorithm creation

Open algorithmic trading to non-programmers.

Supported Markets and Asset Classes

A major advantage of MT5 over MT4 is expanded support beyond just forex to include additional asset classes:

Forex Currency Pairs

  • MT4: Major, minor and exotic FX pairs
  • MT5: Same major, minor and exotic pairs as MT4

Both platforms support all tradable forex currency pairs.

Cryptocurrencies

  • MT4: No crypto trading available
  • MT5: 50+ cryptocurrency CFDs

Access to hot crypto markets like Bitcoin, Ethereum and Litecoin.

Stocks/ETFs

  • MT4: No stock or ETF trading
  • MT5: 1000+ global stocks and ETFs as CFDs

Trade stocks and ETFs alongside currencies and indices.

Commodities

  • MT4: Gold and silver only
  • MT5: Wider range including oil, gas, metals, softs

Expanded commodities trading opportunities.

Bonds

  • MT4: No bonds
  • MT5: Global government bonds, treasury bonds, corporate bonds

Add fixed income products to your portfolio.

Equity Indices

  • MT4: Around 15 major global indices
  • MT5: Wider range of global, sector and smart beta indices

Access more global markets through indices.

Exchange-Traded Funds (ETFs)

  • MT4: None
  • MT5: Hundreds of ETFs covering sectors, regions, strategies

Trade sector-specific or market-cap ETFs.

The broader universe of tradable instruments gives MT5 a major advantage in diversification and asset selection.

Automated Trading Capabilities

Automation through MQL programming or EAs (Expert Advisors) is popular on both platforms. But MT5 provides advanced automated trading options:

MQL Language

  • MT4: MQL4 based on C language
  • MT5: Object-oriented MQL5 based on C++

Object-oriented MQL5 allows for more sophisticated programmatic trading.

Virtual Hosting

  • MT4: No virtual hosting
  • MT5: Cloud-based virtual hosting to run EAs 24/7

Always-on EAs through cloud hosting, even when platform is closed.

Strategy Testing

  • MT4: Backtesting only
  • MT5: Expanded strategy testing and optimization

MT5 testing tools help build more reliable automated strategies.

Partial Order Close By

  • MT4: None
  • MT5: Close partial position by volume, profit, symbol change

Advanced partial closing options for EAs.

Pending Order Modification

  • MT4: Can only edit stop loss and take profit
  • MT5: All pending order parameters can be edited

More flexibility to adjust automated pending orders.

OCO (One Cancels Other) Orders

  • MT4: Not available
  • MT5: OCO linking option

Automate advanced OCO order behavior.

Social and Copy Trading

MT5 incorporates social and copy trading tools to benefit from shared wisdom:

Social Network

Connect with other traders within the platform.

Copy Trading

  • MT4: Requires 3rd party tools
  • MT5: Integrated copy trading to mirror strategies

Follow successful strategies with the click of a button.

Trading Signals

  • MT4: Limited signals through 3rd parties
  • MT5: Marketplace of published trading signals

Subscribe to signals from top traders globally.

PAMM Accounts

  • MT4: Managed accounts through 3rd parties
  • MT5: Integrated Percent Allocation Management Module (PAMM)

Have your account professionally managed.

MT5 amalgamates trading wisdom through social integration and copy/signal trading.

Security

As trading platforms that provide access to funds and personal data, security is crucial. Let’s compare the safety infrastructure:

Encryption

  • MT4: Weak RSA encryption
  • MT5: RSA-4096 bit and AES-256 bit encryption

Advanced encryption protects accounts and data transmission.

Data Storage

  • MT4: Unsecure local storage
  • MT5: Cloud-based encrypted storage

No more loss of data if your computer crashes.

Login Protection

  • MT4: Standard account/password
  • MT5: Password, SMS code or market watch required

Fortified defences reduce unauthorized logins.

Personal Data Privacy

  • MT4: Limited protections
  • MT5: Complies with GDPR for EU citizens

Safeguards personal and financial information.

MT5 utilizes modern security best practices to protect accounts and information.

Pros and Cons of MetaTrader 4 (MT4)

Pros

  • Trusted platform with long track record
  • Simpler interface appeals to beginners
  • Lightweight system resource requirements
  • Widespread use creates vibrant community

Cons

  • Outdated technology and security
  • Limited instruments and asset classes
  • Weaker analysis tools
  • Less customization options
  • No copy trading or social features

Pros and Cons of MetaTrader 5 (MT5)

Pros

  • Cutting-edge and robust trading infrastructure
  • Expanded markets across asset classes
  • Advanced analysis and order tools
  • Increased customization
  • Social trading and copy trading capabilities

Cons

  • Clunkier interface with steeper learning curve
  • Heavier system resource demands
  • Fragmented user base across both platforms
  • Potential fees for advanced tools
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FAQs About MetaTrader 4 vs MetaTrader 5

Is MT5 better than MT4?

MT5 is generally considered an upgrade over MT4. The newer platform provides better technology, broader markets, more advanced analysis tools, increased automation, and security improvements. However, MT4 remains popular for its simplicity and large user base.

Can I run MT4 and MT5 at the same time?

Yes, MT4 and MT5 can both be installed and operated on the same computer simultaneously. They are completely separate platforms. This allows traders to maintain accounts or automated trading on MT4 while exploring MT5.

Is MT5 safe?

MT5 implements robust modern security protocols including RSA-4096 and AES-256 encryption, two-factor authentication options, and GDPR compliance for private data, making it very safe to use. It is vastly more secure than the dated MT4 platform.

Can I convert my MT4 account to MT5?

Some brokers allow direct conversion between account types, while others require you to close MT4 positions and withdraw funds before depositing to a new MT5 account. Check broker policies before attempting to convert accounts.

Does MT5 have more indicators than MT4?

Yes, significantly more. MT5 comes equipped with 108 total indicators compared to 30+ on MT4. The increased technical toolbox provides more analytical power.

Can I use my MT4 custom indicators on MT5?

No, custom indicators and EAs coded for MT4 using MQL4 cannot directly transfer to MT5 due to the change to MQL5 language. They must be re-coded in MQL5 to work on the new platform.

Which is better for beginners?

MT4 tends to be better for beginners, as the legacy platform has a larger community of new traders and simpler interface. MT5 has a steeper learning curve but provides more opportunity to scale into advanced trading techniques.

Conclusion

MT5provides a clear technological upgrade over the venerable but dated MT4 platform. For sophisticated traders seeking expanded instrument selection, customizable workspaces, advanced analysis, algorithmic trading, and robust security, MT5 is the superior choice.

However, MT4 retains a loyal user base due to its simplicity, smaller resource demands, and massive community. It remains an ideal starting point for newer traders diving into retail forex markets.

In summary, while MT5 is the more modern and capable platform, experienced MT4 traders who already have refined workflows may not gain enough marginal benefit from switching platforms to justify abandoning MT4 entirely. Many traders operate accounts on both platforms simultaneously.

Carefully weigh the key differences highlighted in this guide when deciding between MetaTrader platforms. Selecting the right solution comes down to your experience level, trading style, technical requirements, and asset class preferences. Both MetaTrader 4 and 5 provide proven performance for online traders.

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