MT5 vs. MT4 Comparison

 

Today, forex trading is a form of investment and an alternative to traditional employment ever since its widespread popularity. The forex market is a big market with over $3.9 trillion trades taking place each day. If you traded forex ten years ago, you will observe that it isn’t the same as what we have today. Forex involves the buying and selling of currencies under a predetermined price and time.

Previously, it wasn’t possible for individuals to trade forex; however, the narratives have changed. Today, we have numerous trading platforms that have given traders – both the big and small boys the opportunity to trade. Trading platforms became popular in the late 1990s. During those periods, special software was used for trading. These trading platforms are also known as trading terminals, which paved way for the popularity of the forex trading thereby offering numerous people the access to trade in forex and CFD (Contracts for Difference) trading.

Today, the number of trading platforms is constantly increasing with each having their unique features. However, our focus today is to unveil two unique platforms from MetaQuotes Software Corp, which most professional traders rely on when trading. These platforms are the MetaTrader 4 (MT4) and MetaTrader 5 (MT5).

Comparison of MT4 and MT5

 

The best way to appreciate the uniqueness of these different platforms is to look at their features and benefits individually. We don’t have to dive into the history of these platforms, rather let us look at the key features. However, it is important to note that MetaQuotes Software Corp is the developers of these two platforms.

Metatrader 4

 

• Multi-functionality - Different functions have been implemented in these platforms for trading CFD instruments and forex. MT4 provides diverse trading and analytic technologies. Nevertheless, it comes with additional services for the professional traders, who have perfected their trading skills. A key strength of this platform is its algorithmic trading. It is a unique feature that enables traders to take advantage of the automated trading system.
• Mobility – MT4 comes in three different formats, which are the mobile, desktop, and browser. MT4 is a mobile platform; the Metatrader Webtrader and mobile (Android, iOS) platforms are both compatible with the desktop platform. What this means is that if you open a trade on your mobile device, you can manage it easily on your computer. All the data displayed on the mobile version is correctly displayed on your computer. Interestingly, this means you can access your trade anywhere even if your device isn’t close to you.
• Security – The interchange of information between the platform servers, terminal, and the trader is encrypted using 128-bit keys. It also supports an enhanced security system, which is based on an asymmetric encryption algorithm.

Metatrader 5

 

If you have observed, the forex industry is gradually shifting towards the MetaTrader 5 platform. Unarguably MT5 is the future of retail trading because of the unique features it has to overhaul trading experience. Some of the features include:

• Commerce integration
• No FIFO (First In First Out)
• Hedging allowed
• MT5 Supreme Edition plugin integration
• Improved time and charting frames
• Multiple market order
• Fundamental calendar integrated

Benefits of MT5

 

MT5 gives traders unrestricted access to inbuilt analytical resources such as graphs, indicators, and tables. Owning to MQL5, which is an object-oriented programming language gives traders the opportunity to create their own technical indicators. Unlike the MQ5 platform, MT4 has a simpler coding whereby traders can create their own Expert Advisors (EA) or trading robots. EA allows traders to spontaneously implement various trading strategies (tactics) depending on a number of diverse inputs. Through this, traders can have the capability to access precise projections and market analysis.

Another important benefit of the MT5 platform is the opportunity to access real volume-traded data. MT4 lack this benefit because you can’t know what the real volume (lots, or contracts) of trades completed. Furthermore, MT5 is a multimarket platform. This means you can trade in both centralized and non-centralized markets.

Comparison between MT4 and MT5

 

As already stated, these two platforms are unique; however, considering the improvements on MT5, it is faster when compared to MT4. MT5 is a fully-fledged 64-bit and multi-threaded platform unlike the MT4, which is mono-threaded platform and a 32-bit operating system. MT5 runs excellently on 64-bits operating systems while MT4 is perfectly suited for 32-bit operating systems.

Another important difference is that MT4 cannot run fast on 64-bit operating systems whereas MT5 can run on 32-bit operating systems. Furthermore, these two platforms don’t have the same server build-ups. The former has one dedicated server, which is limited in its interaction with other servers. However, MT5 deploys jobs to a different server and provide interaction to deliver improved results. This further leads to resource optimization. MT5 uses four servers – the backup server, history server, trade server, and access service. In contrast to MT4, you could see why many prefer using MT4.

 

Additionally, MT4 is simple and straightforward. It has 33 analytical objects and 30 in-built indicators. It offers traders two different execution modes, four pending order types, two market order types, a trailing stop function, and two stop orders. Most traders still use it because of the simplicity and ease of navigating through the platform. However, MT5 has six types of pending orders, Depth of Market access, and 38 inbuilt indicators. Additionally, the improvement  comes with a separate economic calendar tab with unique features such as impact, schedule, news event, etc.

Conclusion

Different brokers offer forex trading on different platforms but among these platforms include the MT4 and MT5 platforms. These two are the leading trading platforms in the forex market with both pioneering an automated trading system. Nevertheless, they serve different functions with unique features. Divergent to widespread belief, it is important to note that MT5 is not an improvement to the MT4 because of its different features and functionalities from MT4.

When it comes to choosing between MT4 and MT5, it is purely based on personal choice. However, for beginners or those who are primarily trading forex, MT4 may be more suitable because it is simple to understand. Notwithstanding, if you want a more resourceful platform with additional benefits and features, then you have the advantage of using MT5.