Are you a trader trying to choose your trading platform wisely and learn how to start forex trading? Selecting the best platform is essential to your success in the world of online trading. The two most common choices are MetaTrader 4 (MT4) and MetaTrader 5 (MT5), each of which has a unique set of features and benefits. We’ve put together this complete guide to assist you in choosing the best option for your trading needs, and we’ll give you a thorough comparison of mt4 vs. mt5 so you can choose wisely and get started on your forex trading journey. Let’s get started.
What is MT4 and MT5?
Let’s quickly define MT4 and MT5 before getting into the comparison:
MT4 (MetaTrader 4):
For many years, MT4 has been the standard in the trading world. It is well known for its intuitive user interface, a vast collection of technical indicators, and adaptable trading strategies.
MT5 (MetaTrader 5):
The successor to MT4, MT5, includes a number of improvements, including more technical indicators, more timeframes, and support for trading different asset classes, such as equities and commodities.
Now Let’s explore the key differences between MT4 and MT5.
What Types of Assets Do You Want to Trade?
When selecting a trading platform, the range of assets available for trading is a critical consideration. Both MT4 vs. MT5 offer a wide array of options, including:
Forex Pairs: Both platforms support major, minor, and exotic currency pairs. But The features and functionality of MT4 were created with forex traders in mind. For this reason, traders that are primarily focused on the forex market use MT4 as their preferred software platform.
Stocks: MT5 expands its offerings to include stock trading, providing access to a broader range of markets.
Commodities: Both platforms enable trading in commodities like gold, oil, and more.
Cryptocurrencies: If you’re interested in cryptocurrencies, both MT4 and MT5 have you covered.
Depending on your trading preferences, you may favor one platform over the other. MT5’s inclusion of stock trading is a significant advantage for those looking to diversify their portfolio.
Do You Want Access to the FIX API?
For advanced traders and algorithmic trading enthusiasts, access to the FIX API can be a game-changer. FIX (Financial Information Exchange) API allows for direct communication with liquidity providers and enhances execution speed. You must utilize the MT4 trading platform if you want to use the FIX API. Through MT5, FIX API integration is not accessible.
Chart Time Frame Offerings
Analyzing price charts is a fundamental aspect of trading. Both MT4 and MT5 provide a range of chart time frames, but there are differences worth noting:
- MT4 Offers time frames from one minute to one month.
- MT5 Enhances chart analysis with additional time frames, including two minutes and 12 hours.
The availability of more granular time frames on MT5 can be advantageous for traders who require precise timing in their strategies.
Number of Order Types
Efficient order execution is essential for traders. Both platforms support standard order types like market orders, limit orders, and stop orders. However, MT5 goes the extra mile by offering additional order types, such as:
Buy Stop Limit: This order combines the features of a stop order and a limit order, allowing you to set specific entry and exit points.
Sell Stop Limit: Similar to the Buy Stop Limit, but for short positions.
These additional order types can provide more flexibility in your trading strategies, making MT5 the preferred choice for traders who require advanced order options.
Both MT4 and MT5 support automated trading through expert advisors (EAs). However, there’s a difference in the programming languages used:
MT4: Uses MQL4, which has been the go-to language for years, with a wealth of available resources and community support. On MT4, however, there is a stronger presumption that traders will be looking for a platform that can be easily installed and launched, and that requires a few steps to set up functionality or establish a trading program.
MT5: Utilizes MQL5, a more advanced and versatile language that offers improved execution speed and access to a broader set of functions. it also gives users the option to create or edit scripts.
If you’re an experienced coder or plan to hire a developer, MT5’s MQL5 language provides a more powerful platform for creating custom EAs and indicators.
Advantages of MT4
- MT4’s intuitive interface is perfect for beginners.
- It offers a wide range of technical indicators.
- You can create custom indicators and trading scripts.
Disadvantages of MT4
- MT4 has fewer timeframes for analysis.
- It doesn’t support stock trading.
- Market depth information is not as comprehensive.
Advantages of MT5
- MT5 provides additional timeframes for precise analysis.
- It allows trading in various asset classes.
- MT5 features an integrated economic calendar.
Disadvantages of MT5
- The additional features can be overwhelming for beginners.
- Some brokers may have limited MT5 support.
- Transitioning from MT4 to MT5 may require adjustments.
MT4 vs. MT5: Which Trading Platform Should You Choose?
We analyze all the factors of MT4 and MT5 but the choice between both of them essentially comes down to your trading goals and style. Forex traders frequently use MT4 because of its ease. In contrast, MT5 has a wider selection of assets and sophisticated features, making it appropriate for complex strategies and diversified portfolios. Before choosing, take into account your preferences and demands.