Understanding the Differences between MT4 and MT5 Trading Platforms

MetaQuotes Software Corp. developed both MetaTrader 4 (MT4) and MetaTrader 5 (MT5), two of the most commonly utilized trading platforms in the forex market today. While they share their creator, significant differences distinguish the two, implementing varied features and catering to distinct trading styles. This article explores the key differences between the MT4 and MT5 trading platforms, making it easier for both newbie and veteran traders to choose the platform best suited to their needs.

Forex Market Access

The big difference lies in the markets they’re designed to target. MT4 was specifically tailored for forex trading, providing users with access to a comprehensive range of currency pairs. In contrast, MT5 is a multi-asset trading platform, providing users with access to not only forex markets but also other financial markets, such as stocks, futures, and commodities.

Analytical Tools

Another key distinction between MT4 and MT5 is their analytical capabilities. MT4 provides nine timeframes and 30 built-in indicators, enabling traders to analyze the forex market comprehensively. MT5, on the other hand, offers 21 timeframes and 38 built-in indicators. This wider array of tools helps traders conduct significantly more in-depth market analysis across multiple financial markets.

Trading Operations

The two platforms also vary in terms of trading operations. With MT4, traders can manage four types of order execution: instant, request, market, and exchange. Conversely, MT5 comes equipped with two additional types of order execution: stop and limit, allowing for a more rigorous risk management strategy.

Graphical Objects

MT4 offers 31 graphical objects, which include lines, channels, Gann, and Fibonacci tools that are essential for chart and technical analysis. Meanwhile, MT5 extends this feature set with 44 graphical objects, expanding the technical analysis opportunities.

Depth of Market

Another unique feature of the MT5 platform is the ‘Depth of Market’ feature. This provides traders with insight into the market situation and an overview of the orders of other market participants, helping them to make more informed strategies. This feature is absent in MT4, which limits the information available to the trader.

Economic Calendar

MT5 also delivers an integrated economic calendar, displaying economic events, news announcements, and other important indicators directly on the platform. This feature, not available on MT4, allows traders to follow updates in real time and adjust their strategies accordingly.

Programming Language

Finally, the platforms use different programming languages. MT4 uses MetaQuotes Language 4 (MQL4) for scripting custom indicators, EA’s (expert advisors), and automated strategies. However, MT5 uses MQL5, which provides enhanced features, allowing for more advanced strategies and a wider scope of functions for developers.

In Summary

While both MT4 and MT5 are robust, powerful trading platforms equipped with a wide range of features catered towards forex traders, they are equipped to serve different functions. MT4 provides a straightforward, user-friendly platform with sufficient analytical tools for most forex traders and brokers. MT5, with its advanced features, such as additional order types, economic calendar, and a larger number of tools, is ideal for those seeking to explore different markets and adopt an in-depth analysis strategy. When choosing between MT4 and MT5, traders should consider their individual trading requirements and strategies.