MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two well-known trading platforms used by traders in the financial markets. Both platforms come with an array of features that includes advanced charting capabilities, a wide range of technical indicators, and the ability to automate trading strategies with help of expert advisors. However, there are some key differences between the two MetaTrader versions. In this article, we will understand the difference between them and also understand why MT5 is better than MT4.
What is MT4 and MT5?
Released in 2005, MT4 is the most widely used trading platform in the world and a more preferred choice of new traders. Some of the things that make MT4 an excellent trading platform are its user-friendly interface, extensive community support, and a wide range of supported third-party indicators and expert advisors. On the other hand, MT5, which was first released in 2010, is the latest version of the MetaTrader platform. It offers a number of enhancements over MT4. This includes an increased number of timeframes, more advanced charting capabilities, and the ability to trade multiple financial instruments, including stocks, commodities, cryptocurrencies, bonds, and options.
Features: MT5 vs MT4
MT5 has better features than MT4 in several ways, mostly due to its wider range of instrument support, advanced charting capabilities and execution options. Here’s how both the platforms differ from each other.
Range of instruments: The latest MetaTrader version supports a wider range of financial instruments than MT4, allowing for a more diverse trading experience. Additionally, it comes with more advanced charting capabilities and additional time frames & built-in indicators, which provides traders with a better comprehensive analysis of market trends.
Faster backtesting: The built-in strategy tester on MT5 is multi-threaded. This allows for faster backtesting of expert advisors (EAs) than MT4’s single-threaded strategy tester. Moreover, MT5’s hedging mode allows you to open long and short positions simultaneously, making it a more versatile tool for managing risk.
Social trading features: MT5 also has built-in social trading features such as copy trading and signals, which can be useful for less experienced traders or those who do not have time to watch the market 24*7.
Charting and Technical Analysis: MT5 comes with more advanced charting capabilities than MT4 – including more timeframes & built-in indicators. Additionally, it also allows 21 timeframes, while MT4 allows only 9 timeframes.
Execution and Order Types: MT5 offers more advanced execution and order types than MT4. This includes a hedging mode that allows for the simultaneous use of both long and short positions,as mentioned above. However, MT4 does not have such features.
Limitations of MT5
Despite the benefits, the MT5 platform has some limitations. One limitation of MT5 is that its community support is not as extensive as that of MT4. Since it is a relatively new platform, there are lesser third-party indicators and EAs available as compared to MT4.
Both platforms have been widely adopted by traders and brokers around the world and are commonly used by retail & professional traders. Now, the obvious question is : which one to use? This depends on the specific features and requirements that are important to the trader. The level of trading experienced matters in this case too since traders that wish to trade multiple markets would pick MT5 for trading.