Difference Between Metatrader 4 and 5 (MT4 VS MT5)

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Which version of MetaTrader is better? The MetaTrader software has two versions, MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Many traders are dealing with which one to choose. Most traders think MetaTrader 5 is a better option as it is newer. But is it true? To find the answer and realize which is the suitable choice for you, follow us in this blog post. Here we’ll discuss all the differences between Metatrader 4 and 5. But before that, let’s see what is a Metatrader. 

What is MetaTrader?

MetaTrader is a popular platform for Forex traders that can trade a wide range of assets and acts as a gateway between you and the trading markets. MetaTrader is a feature-rich platform that allows traders to perform various trading activities, including charting and technical analysis, monitoring markets, and automating trades. 

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An Overview of Metatrader 4

MetaTrader 4 is an online trading platform that Forex traders mostly use. Traders can also trade commodities and indices via CFDs. Using MetaTrader 4, traders can view currency prices in real-time and perform technical or fundamental analysis. They can also open orders or apply the necessary settings using this version of MetaTrader and trading experts. It is also possible to customize charts, orders, and other items through MetaTrader 4 according to the trading strategies that a person intends. 

Advantages of MetaTrader 4

Some key benefits of MetaTrader 4 are:

• Ease of use  
• Availability in most brokers
• High popularity 

Disadvantages of MetaTrader 4

Here are the disadvantages of Metatrader 4:

• Lack of flexibility compared to other platforms 
• Lack of immediate response. It will not immediately react to this change.
• Not every operating system can run the MetaTrader 4 platform. 

An Overview of Metatrader 5

MetaTrader 5 is a Forex trading platform that allows you to make transactions. This version of MetaTrader has 5 advanced tools for price analysis, algorithmic trading, etc. MetaTrader version 5 was launched in 2010 and has received much attention due to its charts, exclusive indicators, and extensive ability to trade more than 500 markets. 

Advantages of MetaTrader 5 

Some advantages of MetaTrader 5 are:

• Support for more than 68 trading market analysis tools
• Superiority in the code optimization process compared to MetaTrader 4
• Providing conditions for creating a multi-currency strategy tester
• Support for more than 38 market analysis indicators
• The market depth in MT5 provides information about the nearest bids from buyers and sellers.
• Better software saves time, as there is no need to keep track of many transactions.
• More timeframes
• The increased number of fundamental indicators.

Disadvantages of MetaTrader 5

• Unsuitable for beginners due to advanced tools. 
• Incompatibility with older versions means that programs created for MT4 will not work on MT5. 
• Features that may not be useful for all traders.

Key differences between MetaTrader 4 and 5

Before we explain the difference between Metatrader 4 and 5, let’s showcase their key differences in the following table to have an idea of which one to choose:

Now, let’s take a more detailed look at the differences between MetaTrader 4 and 5:

1- Mobile trading functionality

Both platforms have mobile versions that are compatible with Android and iOS devices. However, the MT5 mobile app has more advanced features than the MT4 mobile app, including a new chat feature that allows people to communicate with other traders directly through the platform.

2- Customization options

Both the MT4 and MT5 platforms offer customization options that allow traders to personalize the platform according to their preferences. However, MT5 has more extensive customization capabilities, including the ability to add custom indicators, chart formats, and custom timeframes. MT5 also has a new feature that allows traders to create and save their trading algorithms.

3- Security

One of the important factors we should compare is security. Security is essential on any trading platform. Both MT4 and MT5 have strong security features to protect traders’ accounts and information. Also, both of them use 128-bit SSL encryption to ensure that all communications between the platform and the server are secure.

MT5 also has an additional security feature called two-factor authentication, which provides an extra layer of protection by requiring traders to enter a unique code sent to their mobile device before logging into their account.

4- Community and Support

Both platforms have a large user community, and there are many online forums and resources available to help traders learn and improve their trading skills. MT5 has a more active community and a wider range of support resources, including tutorials, webinars, and a dedicated section on the MetaQuotes website for MQL programming.

5- Cost

Both MT4 and MT5 are available to traders for free, with no monthly subscription or usage fees. However, brokers may charge a fee to use the platform or provide it to their clients for free as part of their trading services. As a result, the cost of using both platforms will depend on the broker you choose.

6- Trading Experience

Algorithmic trading is used by both trading platforms. A lot of traders use algorithmic trading to automate the trading process. Despite having algorithmic trading, the two platforms' implementations differ slightly. They both execute orders in different manners. Both include immediate, market, and on-demand execution. Exchange execution is another feature of MT5. Both consist of buy/sell limit orders as well as buy/sell stop orders. Moreover, buy/sell stop orders are included in MT5.

Data Analysis

Both MT4 and MT5 platforms have ways to generate custom analysis. MT5 has more timeframes, built-in technical indicators, and more graphical elements. There are also indicators available in MT5 that MT4 lacks such as Fibonacci and Elliott tools. Both platforms can alert and notify financial news.

MT5 also has a built-in economic calendar which improves the performance of global financial news on the MT5 platform. One of the main advantages of the MT5 system is the built-in features, allowing users to seek advice from other traders. There is also a built-in E-Mail system in both MT4 and MT5 that traders can use to contact their broker.

7- Risk Management Strategy

Both MT4 and MT5 allow you to hedge and protect your trades for better risk management. However, MT5 adds another function that allows you to clear your trades, which allows you to settle trades more efficiently.

8- Ease of Use

Since MT4 is an earlier platform and less specialized than MT5, it is much easier to use it. This is especially true for those who only trade Forex. Of course, MetaQuotes has improved the user interface of MT5. But still, MT4 is easier to use because of the smaller number of charts, timeframes, and assets that can be traded.

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9- Programming Language

The last thing to consider when looking at the differences between MetaTrader 4 and 5 is the programming language. Both MT4 and MT5 are built on a custom programming language called MQL. The programming language for MetaTrader 4 is called MQL 4, and the programming language for MetaTrader 5 is called MQ5.

Learning how to use these programming languages ​​will make you a better trader because it will allow you to unlock the full potential of these platforms. MQL4 and MQL5 are very similar programs, and the 2014 update to MQL4 means that both languages ​​are well-compatible. Of course, MetaTrader 5 is relatively faster.

10- Programming and Optimization Infrastructure

The main difference between the two versions of MetaTrader lies in their programming and optimization infrastructure. MetaTrader 4 and MetaTrader 5 have very different programming structures. MetaTrader 5 is more efficient for those who use Expert Advisors and Forex robots. However, people who trade manually in the financial markets may not notice much difference between the two versions. 

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11- Algorithmic Trading

Another difference between MetaTrader 4 and MetaTrader 5 lies in algorithmic trading. This means that the accuracy of the information in these two versions differs when performing backtests and forward tests. A backtest in MetaTrader refers to evaluating the performance of a trading strategy, helping traders understand how their strategy performed in the past market. The backtest results provide traders with insights into profitable trades, losing trades, the percentage of profitable trades to losing trades, the amount of profit and loss in each position, the maximum account drawdown during the test period, and more.

Strategy Tester

If traders want to determine whether their trading strategy is profitable, they must first examine the strategy’s performance in past market conditions. Manually analyzing the outcome of a strategy can be time-consuming, which is why MetaTrader offers a tool called the Strategy Tester. This tool displays the overall performance of a strategy over a specific period.

If you're wondering which version of MetaTrader is better for backtesting, statistics show that MetaTrader 5 offers higher accuracy and faster backtesting. Additionally, MetaTrader 5 supports forward testing, whereas MetaTrader 4 lacks this capability.

12- Differences in indicators

Some products and indicators are designed exclusively for MetaTrader 4 and do not exist in MetaTrader 5. Conversely, some indicators and products are written only for MetaTrader 5. 

keep in mind that in MetaTrader 4 you can see 9 timeframes and in MetaTrader 5 you can see 21 timeframes. Similarly, in MetaTrader 4, there are 30 technical indicators, while in MetaTrader 5 there are 35 indicators for technical analysis. Some of the best Forex brokers also offer their products and services to users only on one of the two versions of MetaTrader.

13- Difference in speed

The MetaTrader 5 trading platform is a multi-threaded, 64-bit system, while MetaTrader 4 is a single-threaded, 32-bit system. For this reason, MetaTrader 5 is faster.

14- Third-Party Plugins and Integrations

Both platforms support third-party plugins that can extend their functionality. MetaTrader 4 has a rich ecosystem of third-party tools, including plugins, custom indicators, and automated trading systems (EAs). Whether you need a trade copier or a risk management tool, MT4 offers a wide range of options from independent developers.

While MetaTrader 5 also supports third-party plugins, it has fewer available options compared to MT4. However, many features that previously required plugins in MT4, such as additional timeframes and an economic calendar, are now built directly into MT5. As a result, external plugins are often unnecessary.

Which one to choose, Metatrader 4 or 5?

Both of these systems make technical analysis and the use of unique trading approaches easy. In addition, a wide range of applications (both for computers and mobile phones) is available. Numerous trading robots can make the work of traders easier. 

Choose MT4 if:

• You are a Forex trader.
• You prefer a simple trading platform. 
• You need more third-party plugins, custom indicators, and automated trading systems (EAs). 
• You don't need advanced features like additional timeframes, economic calendars, or forward testing.

If you need more than one Metatrader 4, you can learn how to set up multiple MT4 accounts on VPS.

Choose MT5 if:

• You need advanced features like a built-in economic calendar, more timeframes (21 vs. 9), and more technical indicators (35 vs. 30). 
• You need better performance and speed is important to your trading strategy.
• You need better backtesting accuracy and forward testing to refine your strategies with greater precision.
• You need more extensive customization options like custom timeframes and trading algorithms.
• Security is important to you.
• You want to trade a wider variety of instruments as MT5 supports not only Forex but also stocks, commodities, and futures.

Conclusion

Both MT4 and MT5 are built with different goals in mind, and these goals make MetaTrader 4 and 5 different in many ways. They are both suitable for different traders. If you are a beginner trader who wants to explore the Forex market, MT4 is a good choice for you. However, if you are an experienced trader who wants to trade in other markets and diversify your portfolio, MT5 seems to be a better choice. Remember, just because MetaTrader 5 has more features doesn’t mean that it is better than MetaTrader 4. Before choosing any type of MetaTrader, you should research the broker you want to trade with and then compare the differences between MetaTrader 4 and 5.