MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are popular trading platforms developed by MetaQuotes Software Corp. Both platforms are widely used by retail traders and offer a range of features for trading in various financial markets. Let’s compare MT4 and MT5, and discuss their pros and cons.
- Market Availability:
- MT4: This platform has been around for a long time and has a large user base. It primarily focuses on Forex trading but also supports trading in other markets like commodities and indices.
- MT5: It is the successor to MT4 and provides access to a broader range of markets, including stocks, futures, and options, in addition to Forex. MT5 is designed to be a multi-asset platform.
- Order Execution Types:
- MT4: It offers four types of order execution: Market Execution, Instant Execution, Request Execution, and Exchange Execution. However, it does not support netting (hedging) positions by default.
- MT5: This platform supports six types of order execution, including two new ones: Market Execution, Instant Execution, Request Execution, Exchange Execution, Market Depth, and Netting. Netting allows hedging positions on the same instrument.
- Programming Languages:
- MT4: It uses MQL4 (MetaQuotes Language 4) for coding indicators and Expert Advisors (EAs). MQL4 is a widely adopted programming language and has a vast online community.
- MT5: It uses MQL5 (MetaQuotes Language 5), which is an enhanced version of MQL4. MQL5 offers more advanced features and capabilities, making it more suitable for complex trading strategies.
- Backtesting and Optimization:
- MT4: It has a built-in strategy tester that allows traders to backtest and optimize their trading strategies using historical data. However, the testing and optimization process is limited to a single-threaded mode, which can be slower.
- MT5: This platform improves on MT4’s strategy tester by introducing a multi-threaded mode, which significantly speeds up the backtesting and optimization process. It also provides more testing options and advanced debugging tools.
- Additional Features:
- MT4: It offers a wide range of technical analysis tools, customizable charts, and a user-friendly interface. However, it lacks some advanced features such as a built-in economic calendar and a depth of market (DOM) display.
- MT5: This platform includes all the features of MT4 and introduces additional functionalities like an economic calendar, a built-in market depth tool, and more charting options. It also supports more types of pending orders.
- MT4: It is supported by a vast majority of brokers, and many traders have built their libraries of custom indicators and EAs specifically for MT4.
- MT5: Although its popularity is increasing, MT5 is not as widely supported as MT4. Some brokers offer both platforms, while others may only support one of them.
In summary, MT4 is a well-established platform with a large user base and a focus on Forex trading. On the other hand, MT5 is a more advanced and versatile platform that supports a broader range of markets and introduces new features. The choice between the two depends on your trading preferences, the markets you trade, and the compatibility with your broker and existing trading tools.