MetaTrader 4 vs. 5: Key Differences and Why They Matter

If you’re into Forex or CFDs, you’ll have heard of MetaTrader, a trading platform popular with brokers and traders alike. It comes in two flavours: MetaTrader 4 and MetaTrader 5 We’ll explore the key differences between both platforms, and touch on the strengths and weaknesses of MT5 in relation to its predecessor, MT4.

Similarities

Both platforms look and feel the same. They share a rich user interface, allow you trade from the charts and support complex order types. They’ll appeal to both beginners and more experienced traders who look for fine-grained control over their trading platform. Importantly, both platforms support trading bots, known as Expert Advisors.

Operating systems

Both platforms can be installed on a mobile device (iPhones and Androids) and desktop computers (Windows PC, Linux and Mac). But MT5 is much faster than MT4, because it has a 64-bit multithreaded implementation, whereas MT4 is single-threaded for 32-bit processors. MT4 can run on a 64-bit system too, but will always be slower than MT5. If speed is important to you, you’ll probably want to use MetaTrader 5.

MetaTrader brokers

An increasing number of brokers support both platforms, but MetaTrader 4 still has a clear edge over its successor. In fact, you’ll find over 1,000 brokers with MT4 implementations. Whilst they share some characteristics, you’ll be wrong to assume that even the best MT4 brokers are the same. Some brokers go the extra mile, by supporting all trading styles and overloading their platform with free plugins and customisations.

Charting tools

Charting is one of the strengths of the MetaTrader platform, and MT5 builds on that by incorporating more technical indicators and tradable time frames. These technical indicators include support and resistance levels, trendlines and Fibonacci levels.

While MT5 boasts 38 core technical indicators, it’s worth noting that, in addition to its 30 standard indicators, the MT4 community has developed thousands of indicators (both free and paid) available for download from the MetaTrader marketplace.

Range of markets

Unlike MT4, MT5 is designed to handle a wider range of exchange-based financial markets in addition to Forex. These include futures, options, stocks, bonds and even crypto. This means that traders are finally able to asset all markets through a single platform.

Furthermore, MT5 can incorporate an unlimited number of instruments within its platform, whereas MT4 is limited to 1,024. This makes MT4 unsuitable for the large numbers of instruments available in the equity and derivative markets, and explains why MT4 has its roots in Forex.

Because it offers direct on-exchange trading, MT5 makes it possible to see market depth and ‘time and sales’ data from an exchange. This provides unique insights into the balance between supply and demand at the exchange-level.

Technology

The MetaTrader platform also comes with its own object-oriented programming language, called MetaQuotes Language (MQL). Traders can use MQL to create custom indicators and Expert Advisors, instead of using the platform’s built-in indicators or purchasing one from the MetaTrader marketplace.

Expert Advisors, abbreviated as EAs, are computer programmes that can continuously scan the markets for trading opportunities, and execute trades on your behalf when certain conditions are met. Importantly, these trading bots follow rules that are defined upfront within the computer programme, which means you have a certain element of control over trading decisions.

MetaTrader 5 has improved the MetaQuotes Language to fully support the platform’s features. In particular, MT5 has significantly improved the platform’s Strategy Tester, a module which allows you to backtest and optimise Expert Advisors against historical trading data. This makes it easier and faster to see how a trading robot could perform in a live trading environment.

However, it’s important to note that MT4 Expert Advisors aren’t compatible with MT5. Unfortunately, you’ll need to either re-programme your EAs from the ground-up, or source new ones from the MetaTrader marketplace.

Educational resources and community

Community is where MT4 really shines. It is one of the world’s most widely supported trading platforms, and this means that the range of educational resources available is extensive. MT4 has become the de facto standard for Forex trading over the years and supports an extensive user base of traders and EA developers. The MT4 marketplace currently hosts 1,700 EAs and 2,100 technical indicators.

As one might expect, MT5 has a smaller community that consists of over 2,000 Expert Advisors and indicators. But it’s reasonable to expect that, in time, MT5 will become more widely adopted and its community will grow further. MT5 also has useful features such as the ability to chat to other traders in the MT5 community directly via the platform, as well as the ability to add attachments through its internal messaging system.

Conclusion

If you’re new to MetaTrader, we suggest choosing MetaTrader 5, as this platform is faster than, and superior to MetaTrader 4. However, if you’re already familiar with MetaTrader 4, your choice of platform is an open question for you to decide. MetaTrader 5 has clear advantages over its predecessor, but you will need to make time to learn MT5’s new features and reprogramme your Expert Advisors.

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