Both systems developed by MetaQuotes Software Corp are wildly popular with traders in South Africa. Their web versions work directly in browsers. But which one is best for your trading needs? Here is your ultimate comparison guide.
MT4 and MT5 for Multi-Device Use
Both forex trading terminals have multiple versions. Aside from the web trader, you may install a mobile app or desktop software on any popular OS. Users can easily switch between devices. Now, when professionals are constantly on the move, this opportunity is priceless.
For example, one may open a position from the web-based platform, modify it from a tablet and close via a laptop. This convenience meets the needs of the 21st-century user. For all systems to function smoothly, all you need is stable internet.
MetaTrader 4 has other functions besides forex. You can use it to trade spot metals or CFDs — Contracts for Difference. However, MT4 is often seen as the first system for beginners. As they gain experience and expand portfolios, they transition to the fifth edition.
MetaTrader 4 is less complex than its successor, which makes it rookies’ favourite. It is easy to navigate. There are:
30 indicators and 33 analytical objects;
4 types of market orders;
4 types of pending orders;
2 execution models.
Any software involving financial transactions must be secure. MetaTrader 4 has 128-bit encryption. It protects information shared between the users, the platform and the servers. MT4 from ForexTime also supports higher-level security based on RSA (an algorithm for asymmetric encryption).
One of the strengths of the earlier version is algorithmic trading. Users may integrate forex robots — smart pieces of software that analyse the market or conduct trading for them.
The assistants are known as Expert Advisors (EA). As the MQL4 IDE environment is in-built, you may create your own robots. For beginners, this is challenging. Still, they may enter ‘MetaTrader Market’, the built-in app store, and the free ‘Code Base’ library. These offer various tools for profitable trading like technical indicators, scripts, and EAs.
Without fail, this system is the future of online trading. The industry is gradually shifting towards the fifth edition. It has improved charts, more time frames, exclusive indicators and more order types.
MT5 also features an economic calendar that summarises important events. Its Depth of the Market (DoM) shows Ask and Bid prices for an asset which are the best at the moment (closest to the market). The feature shows a different number of Bids and Asks depending on the broker. Aside from this, the platform has:
44 analytical objects;
all types of orders, including 6 pending.
Differences Between Languages
These online trading platforms are built on MQL4 (MT4) and MQL5 (MT5). The latter is faster as it is position-based. One operation engages one function. MT4 is built on an order-based language. One operation requires several functions. Users of MT5 can create and modify scripts — this is impossible in the earlier version.
What Makes MT5 Superior?
Aside from the default analytical resources like tables, graphs, and indicators, users may create their own technical aids. In comparison with MT4, this is much easier. Traders build their own expert advisors that automatically work based on their strategies. This ensures more precise analysis and forecasting.
MetaTrader 5 supports both hedging and netting, while the predecessor only has the former. Through hedging, users conduct multiple trades in the same or opposite directions, which reduces risk. MT5 allows them to have just one common position per symbol. Other enhanced features include order filling through multiple deals. Partial fills are also allowed.
MT5 is a multi-market platform. It means users may access both centralised markets, such as the stock exchange, or decentralised, such as forex. However, it is mostly focused on CFDs, stocks and futures.
Access to Real Volume Data
Users of MT5 can see more than just tick volume. They have access to real data. In comparison, MT4 only reflects tick volume, while the number of actual contracts and lots is unknown. Tick volume shows how many price changes have occurred within a particular period.
MT4 only allows manual saving of tick history. It means that to record all of your ticks, you would need to keep the platform running 24/7. The chances of identifying the most traded price or cluster in your range are slim to none. Finally, only M1 bars may be used. In MT5, you can download history automatically from the broker.
Accurate data is vital, particularly when users need to backtest their strategies. Today, many traders prefer using special tools like ‘Delta Volume’ or ‘Market Profile’. MT5 allows it. It is more advanced in this regard as well.
MT5 has many extras in its supreme edition. They facilitate different operations and boost accuracy. Here are some of them.
With this tool, users can open and manage their positions with unprecedented accuracy. A new order ladder allows them to place both market and pending orders. The setup is simple, and the risk/reward ratio is defined on the fly.
MT5SE is a peculiar plugin: it allows the user to expand the Mini Terminal at a click. It unfolds into a fully functional control panel. The feature makes opening and managing of orders easier; it also displays essential details concerning your instrument.
The Bottom Line: MT4 vs MT5
MT5 is a more complex and advanced environment for trades. While MT4 is focused on forex, the other version was built around CFDs, stocks, and futures. It has more indicators and analytical objects, time frames, and additional features like DoM and an economic calendar. Still, MT4 is great for beginners and those who trade only currencies because of its simple interface.