Retail forex trading is done through online platforms. These platforms vary widely as different brokers provide customized and varied trading platforms to their clients. In spite of this variety, there still exist some platforms that are universally accepted and are offered by most brokers to their clients. Two universally accepted platforms – MT4 and MT5 stand out in the midst of forex trading platforms. In this post titled MT4 vs MT5, I will be comparing the two platforms.
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Table of Contents
Origins and Relationship
These two platforms were created by the MetaQuotes Software Corp. Both trading platforms are loaded with awesome features that give the trader flexibility combined with functionality. Thus delivering the trader full all-round trading platforms.
MetaTrader 4 was launched in 2005, after 20 months of development. It started to gain popularity among traders because it supported the running of trading robots and automation of different processed through the use of third-party scripts. This is as a result of its language mql4 with which programmers could add several other functions to the platform. Consequential to its popularity among traders, forex brokers started to offer the platform as an alternative to their different proprietary platforms.
In 2010, five years after the release of MetaTrader 4, the company released MetaTrader 5. MT5 was a more powerful platform which took three years to develop, as opposed to the 20 months MT4 took. This new platform came with a whole lot of new features, with MetaQuotes Software expecting that it would be received with open arms. This did not happen, brokers had just switched to MT4 and it was still very much relevant, therefore, they did not see the need to switch to MT5.
Today, 10 years later, although MT5 has more functionality than MT4, it still falls behind it in popularity.
Similarities (MT4 vs MT5)
Being developed by the same company, there are sure some similarities between the two platforms. The similarities are enough to make you at first glance know that the two platforms are related in some way. However, they are also few enough for them to pass as two different programs rather than MT5 being just an update to MT4.
The user interface for both platforms are quite similar in arrangement. From the top of the platform, both platforms contain a menu bar, toolbars, market watch, navigation, and chart windows. They also contain a terminal/toolbox in which open positions among a host of other things can be accessed.
Opening a trade
To open a trade on both platforms, the commands are fairly the same. The simplest way is to double click the currency pair in the market watch, and an order window, where trade parameters can be set will be opened.
Learn more about how to open a trade in MT4 or how to open a trade in MT5.
Closing a trade
Just like opening a trade, you can close a trade by double-clicking the order ticket in both platforms. Doing this will open a window where the trade can be closed.
Learn about the different ways to close trades in MT4 or MT5.
Modifying a Trade
Trades can modify trades by clicking on the stop loss/ take profit sections of the order ticket in both MT4 and MT5.
Learn more about the different ways to modify trades in MT4 or MT5.
Indicators are very useful tools in technical analysis, making them essential for forex trading platforms. Both trading platforms contain the same out of the box indicators for use by traders.
The chart window in both platforms are very similar. In both platforms, there exist three chart types – bar, candlestick, and line charts. Charts can also be modified to preference in both platforms.
Both trading platforms come equipped with a strategy tester. Although the strategy tester in MT5 comes with way more functionality which will be further discussed below, they are essentially for the same purpose which is backtesting and optimizing trading strategies/ robots.
Although, the terminal window also differs in both trading platforms to a certain extent, as will be discussed below, both are similar. Both “terminal” windows contain different tabs which show open positions, exposure, account history, etc.
Preferences and Options
Chart preferences and overall platform options in both platforms can be modified to the liking of the trader. These are available through left clicking the chart and selecting options from the tools menu respectively.
Templates and Profiles
Different preferences can be saved as templates or profiles in both trading platforms. This saves the trader the hassle of having to set their preferred options every time they need them.
Differences (MT4 vs MT5)
The MT4 and MT5 platforms contain a considerable number of differences. These will be discussed in a moment.
Although both trading platform have similar interfaces, they contain noticeable differences.
- The icon design for the items on the toolbars are different. MT5 has a bit more color to its icons than MT4.
- The market watch in MT5 has dots (green/gray) which show if quotes are coming in or not in the market watch while MT4 lacks this option.
- The market watch in MT5 has three tabs while that in MT4 has two.
- The navigator window in MT5 has more options than that in MT4.
Analysis Tools and Objects
There are slightly more analysis tools and objects in MT5 than in MT4.
There are 9 timeframes total in MT4 while MT5 has 20 different chart timeframes.
The script/ language of MT4 is the mql4 while that of MT5 is mql5. There exist several differences between these languages with mql5 bearing a close resemblance to C++. Mql5 is more flexible and capable of more functionality than mql4, which cannot perform complex functions as much.
Terminal vs Toolbox
The area where orders are displayed alongside many other tabs in MT4 is named ‘terminal’ while it is named ‘toolbox’ in MT5. The toolbox in MT5 has more tabs than the terminal in MT4. Another major difference is that the strategy tester can be accessed from the toolbox in MT5 through a link in the bottom right corner, while this is not possible in MT4.
The strategy tester in MT5 is far more advanced and is capable of displaying more data in the form of charts and graphs than that of MT4. This can be considered as a result of MT5 being built for trading more assets like futures and stocks in addition to forex. MT4 was built for just forex trading. Also, five years is a lot of time when it comes to advances in technology in recent times.
The history center present and accessible through the tools menu in MT4 is absent in MT5.
There are other features that are present in MT5 and are not available in MT4 which are not covered in this article.
In conclusion, the MT5 platform was built to surpass the MT4 platform. Although in functionality, this goal has been achieved, it is not quite the same story when it comes to worldwide usage. This is because the MT4 platform is by no means an underdog when it comes to functionality and flexibility.
Finally, both platforms are great, and to choose between them, it really boils down to what is been offered by different brokers or your preference. Brokers sometimes offer different instruments and perks based on the platform chosen.
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