Comparing MT4 vs MT5: Which Platform is Right for You?

MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two of the most popular trading platforms in the world, developed by MetaQuotes Software. While both platforms offer powerful trading capabilities, they have distinct differences that make each suitable for different types of traders. Understanding these differences will help you choose the platform that best fits your trading style and needs.

Overview of MT4 and MT5

MetaTrader 4 (MT4)

Released in 2005, MT4 quickly became the gold standard for forex trading platforms. It's known for its simplicity, reliability, and extensive community support. MT4 was primarily designed for forex trading and has remained largely unchanged since its release, which speaks to its solid foundation.

MetaTrader 5 (MT5)

Launched in 2010, MT5 was designed as the successor to MT4, offering enhanced features and capabilities. It supports multiple asset classes beyond forex, including stocks, commodities, and futures. MT5 represents MetaQuotes' vision for the future of trading platforms.

Key Differences Between MT4 and MT5

Asset Classes and Markets

MT4: Primarily designed for forex and CFD trading. While some brokers offer additional instruments, the platform is optimized for currency pairs.

MT5: Supports multiple asset classes including forex, stocks, commodities, futures, options, and bonds. It's designed as a multi-asset platform from the ground up.

Order Types

MT4: Offers 4 order types:

• Market orders (Buy/Sell)
• Pending orders (Buy Limit, Sell Limit, Buy Stop, Sell Stop)

MT5: Provides 6 order types:

• All MT4 order types
• Buy Stop Limit
• Sell Stop Limit

Hedging vs. Netting

MT4: Uses a hedging system, allowing you to hold multiple positions in the same instrument, including opposite positions (long and short simultaneously).

MT5: Uses a netting system by default, where positions in the same instrument are automatically netted. However, some brokers offer hedging accounts on MT5.

Timeframes

MT4: Offers 9 timeframes:

• M1, M5, M15, M30, H1, H4, D1, W1, MN1

MT5: Provides 21 timeframes:

• All MT4 timeframes plus M2, M3, M4, M6, M10, M12, M20, H2, H3, H6, H8, H12

Technical Analysis Capabilities

Built-in Indicators

MT4: Comes with 30 built-in technical indicators and 24 analytical objects for charting.

MT5: Features 38 built-in indicators and 44 analytical objects, providing more comprehensive analysis tools.

Custom Indicators and Expert Advisors

MT4: Uses MQL4 programming language. Has a vast library of custom indicators and EAs developed over many years. The MQL4 community is extensive and well-established.

MT5: Uses MQL5 programming language, which is more advanced and object-oriented. While the library is growing, it's not as extensive as MT4's. MQL5 offers better performance and more sophisticated programming capabilities.

Market Depth and Execution

Market Depth (Level II)

MT4: Does not provide market depth information.

MT5: Offers market depth (DOM - Depth of Market), showing bid and ask prices beyond the best available prices.

Execution Types

MT4: Supports market execution and instant execution.

MT5: Supports market execution, instant execution, exchange execution, and request execution.

Economic Calendar and News

MT4: Basic news feed functionality.

MT5: Integrated economic calendar with detailed event information, historical data, and impact analysis.

Performance and Speed

System Requirements

MT4: Lighter on system resources, runs well on older computers and slower internet connections.

MT5: Requires more system resources but offers better performance for complex operations and multiple asset trading.

Backtesting

MT4: Single-threaded backtesting, which can be slow for complex strategies.

MT5: Multi-threaded backtesting with cloud network support, significantly faster for strategy testing.

Mobile Trading

Both platforms offer mobile apps for iOS and Android with similar functionality. However, MT5 mobile apps tend to have more features and better performance due to the platform's more modern architecture.

Broker Support and Availability

MT4 Availability

MT4 is widely supported by forex brokers worldwide. Almost every forex broker offers MT4, making it easy to find a broker that suits your needs.

MT5 Availability

While MT5 adoption is growing, not all brokers offer it. However, most major brokers now provide MT5 alongside MT4, especially those offering multi-asset trading.

Which Platform Should You Choose?

Choose MT4 If:

• You primarily trade forex and CFDs
• You prefer the hedging system for position management
• You rely heavily on custom indicators and EAs from the MT4 community
• You want maximum broker choice and availability
• You're comfortable with the platform and don't need advanced features
• You have limited system resources

Choose MT5 If:

• You trade multiple asset classes (stocks, commodities, futures)
• You want access to more timeframes and advanced order types
• You need market depth information for your trading strategy
• You prefer the integrated economic calendar and news features
• You want faster backtesting and more advanced programming capabilities
• You're looking for a more modern, future-proof platform

Migration Considerations

Moving from MT4 to MT5

If you're considering migrating from MT4 to MT5, keep in mind:

• MQL4 EAs and indicators won't work on MT5 without conversion
• The netting system may require adjustments to your trading strategy
• You'll need to learn new features and interface elements
• Not all brokers offer the same conditions on both platforms

Future Outlook

While MetaQuotes has stopped developing new features for MT4, they continue to provide security updates and bug fixes. The company's focus is clearly on MT5 as the platform of the future. However, MT4's popularity means it will likely remain available for many years to come.

Conclusion

Both MT4 and MT5 are excellent trading platforms, each with its own strengths. MT4 remains the preferred choice for forex traders who value simplicity, reliability, and extensive community support. MT5 is better suited for traders who need multi-asset capabilities, advanced features, and modern technology.

The choice between MT4 and MT5 ultimately depends on your trading style, the assets you trade, and the features you value most. Many traders actually use both platforms for different purposes, taking advantage of each platform's unique strengths.

Before making a decision, consider testing both platforms with demo accounts to see which one feels more comfortable and meets your specific trading needs. Remember that you can always switch platforms later if your trading requirements change.