MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two of the most widely used forex trading platforms in the world. Both platforms are known for their user-friendly interface, advanced trading tools, and strong analytical capabilities. However, while MT4 and MT5 share many similarities, there are key differences between them that can affect which platform is better suited for your trading needs.

In this article, we will compare MT4 and MT5 in terms of their features, functionality, and suitability for different types of traders.

Overview of MetaTrader 4 (MT4)

MetaTrader 4 (MT4) was launched in 2005 and quickly became the most popular trading platform for forex traders. It is known for its simplicity, reliability, and customisation options, which make it ideal for both beginners and experienced traders.

Key Features of MT4:

• Forex Focused: MT4 is designed primarily for forex trading, though it also supports other instruments like commodities and indices.
• Custom Indicators: Traders can create custom technical indicators and use Expert Advisors (EAs) for automated trading.
• 4 Pending Order Types: MT4 supports four types of pending orders (Buy Limit, Sell Limit, Buy Stop, Sell Stop).
• Simple Interface: The interface is intuitive and easy to navigate, making it perfect for beginners.
• Wide Broker Support: MT4 is supported by a vast number of brokers, making it easy to find a broker offering this platform.

MT4’s lightweight design and wide adoption have made it the go-to platform for most forex traders, offering simplicity without sacrificing the key tools traders need.

Overview of MetaTrader 5 (MT5)

MetaTrader 5 (MT5) was launched in 2010 as the successor to MT4, offering more advanced features and capabilities. While MT5 retains many of the features of MT4, it also includes additional tools and allows traders to access a broader range of asset classes, making it more versatile.

Key Features of MT5:

• Multi-Asset Trading: MT5 supports trading not only in forex but also in stocks, commodities, indices, and futures.
• More Technical Indicators and Timeframes: MT5 offers more built-in technical indicators (38) and timeframes (21), compared to MT4’s 30 indicators and 9 timeframes.
• 6 Pending Order Types: MT5 adds two more pending order types (Buy Stop Limit and Sell Stop Limit) for greater flexibility in order execution.
• Depth of Market (DOM): MT5 provides the Depth of Market feature, which shows the buy and sell orders at various price levels, giving traders better insight into liquidity.
• Economic Calendar: MT5 includes an integrated economic calendar that helps traders stay updated with important market-moving events.

MT5 is a more advanced and comprehensive platform, making it suitable for traders who want to diversify beyond forex and take advantage of additional features and tools.

Key Differences Between MT4 and MT5

Here are the key differences between MT4 and MT5 that you should consider when choosing a platform:

• Asset Classes:
• MT4: Primarily designed for forex trading.
• MT5: Supports multiple asset classes, including forex, stocks, commodities, indices, and futures, making it more versatile for traders who want to trade a wider range of instruments.
• Order Types:
• MT4: Offers 4 types of pending orders (Buy Limit, Sell Limit, Buy Stop, Sell Stop).
• MT5: Offers 6 types of pending orders, adding Buy Stop Limit and Sell Stop Limit to provide more options for traders.
• Technical Indicators:
• MT4: Comes with 30 built-in indicators.
• MT5: Offers 38 built-in indicators, providing more tools for advanced technical analysis.
• Timeframes:
• MT4: Includes 9 different timeframes.
• MT5: Expands this to 21 timeframes, allowing for more detailed chart analysis.
• Depth of Market (DOM):
• MT4: Lacks Depth of Market functionality.
• MT5: Offers DOM, which provides traders with insight into the liquidity of an asset by showing buy and sell orders at different price levels.
• Programming Language:
• MT4: Uses MQL4, which is simpler and primarily focused on forex trading automation.
• MT5: Uses MQL5, which is more advanced and versatile, allowing for more complex trading strategies and broader asset class support.
• Hedging vs. Netting:
• MT4: Supports hedging, allowing traders to hold multiple positions in the same currency pair, both long and short.
• MT5: Allows both hedging and netting, but some brokers may restrict one or the other depending on regulatory requirements.
• Backtesting and Strategy Testing:
• MT4: Backtesting on MT4 is single-threaded, which means it’s slower when testing automated trading strategies.
• MT5: Offers multi-threaded backtesting, allowing for faster and more efficient testing of strategies, particularly when using historical data.

Which Platform Should You Choose?

The choice between MT4 and MT5 depends on your trading style, the markets you want to trade, and your technical requirements.

Choose MT4 if:

• You are focused primarily on forex trading.
• You prefer a simpler interface and fewer features.
• You want access to a platform that is supported by almost every broker.
• You rely on custom indicators and Expert Advisors (EAs) designed for MT4.

Choose MT5 if:

• You want to trade a wider range of asset classes, including stocks, indices, and futures.
• You need access to more advanced tools, such as the Depth of Market (DOM) and an integrated economic calendar.
• You require more timeframes, technical indicators, and pending order types for greater trading flexibility.
• You want to perform faster, multi-threaded backtesting for your automated strategies.

Practical and Actionable Advice

Here are some tips for deciding between MT4 and MT5:

• Test Both Platforms: Most brokers offer both MT4 and MT5 demo accounts. Use these demo accounts to get a feel for each platform and determine which one suits your trading style.
• Consider Your Asset Class: If you plan to trade only forex, MT4 might be sufficient. However, if you want to diversify into other markets like stocks or commodities, MT5 will be the better choice.
• Check Broker Compatibility: Not all brokers support both platforms. Make sure your preferred broker offers the platform you want to use.
• Look at Your Strategy Needs: If you use automated trading or need advanced charting and analysis tools, MT5 offers more options. For simpler, manual forex trading, MT4 remains a solid choice.

For more guidance on choosing the right trading platform and strategies tailored to your trading needs, consider enrolling in one of our Trading Courses at Traders MBA. These courses provide in-depth insights into using MT4 and MT5 effectively for different trading styles.

Frequently Asked Questions

Is MT5 better than MT4?
MT5 offers more advanced features than MT4, such as multi-asset trading, more timeframes, and Depth of Market. However, for traders focused solely on forex, MT4 may still be the preferred option due to its simplicity and widespread broker support.

Can I use MT4 and MT5 at the same time?
Yes, many traders use both platforms simultaneously if their broker supports both. This allows them to take advantage of MT4’s simplicity for forex while using MT5’s advanced features for other asset classes.

Are Expert Advisors (EAs) compatible with both MT4 and MT5?
No, Expert Advisors (EAs) developed for MT4 using MQL4 are not compatible with MT5, which uses MQL5. If you switch platforms, you may need to adjust or redevelop your EAs.

Do brokers charge different fees for MT4 and MT5?
Generally, brokers do not charge different fees based on the platform you use. However, the fees and spreads depend on the broker’s account types rather than the platform itself.

Is MT5 more difficult to learn than MT4?
MT5 offers more features, which can make it more complex for beginners. However, both platforms are user-friendly, and with practice, traders can navigate MT5 effectively.

Can I switch from MT4 to MT5 later?
Yes, you can switch from MT4 to MT5 if your broker offers both platforms. However, keep in mind that any custom indicators or EAs you developed for MT4 will need to be modified to work on MT5.

Which platform is better for backtesting strategies?
MT5 is better for backtesting because it allows multi-threaded backtesting, making the process faster and more efficient than the single-threaded backtesting offered by MT4.

Where can I learn more about using MT4 or MT5 effectively?
To learn more about using MT4 or MT5 and improving your trading strategies, our Trading Courses at Traders MBA are an excellent resource for mastering these platforms.

Conclusion

MT4 and MT5 are both powerful platforms, but they serve slightly different purposes. MT4 is perfect for forex traders who want a simple, reliable platform, while MT5 offers more advanced tools and supports multi-asset trading. The choice between the two depends on your trading needs and the markets you plan to trade.

If you’re ready to take your trading to the

next level and master either platform, our Trading Courses at Traders MBA can help you make the most of MT4 and MT5, ensuring you have the knowledge and skills to trade effectively.