Differences Between MetaTrader 4 and MetaTrader 5: Which One is Better?

FXZone

MetaTrader is a popular trading platform among forex and CFD traders worldwide. MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two versions that are often compared because of their superior features. Although at a glance these two platforms appear similar, there are significant differences to consider before choosing one. In this article, we will discuss the differences between MT4 and MT5 and help you determine which one is better for your trading needs.

1. Development Purpose

MT4 was released in 2005 and primarily designed for forex trading. The platform became very popular due to its ease of use and adequate features for forex traders.

MT5, released in 2010, has a broader scope. Besides forex, MT5 supports trading in stocks, commodities, and futures markets. This platform is aimed at traders who want to diversify their portfolios.

2. Features and Analytical Tools

MetaTrader 4:

Technical Indicators: MT4 has 30 built-in indicators and allows the addition of custom indicators.
Timeframes: MT4 offers 9 different timeframes.
Charts: The platform supports up to 4 charts that can be opened simultaneously.
Expert Advisors (EA): MT4 supports the use of EAs for automated trading.

MetaTrader 5:

Technical Indicators: MT5 offers 38 built-in indicators and the ability to add custom indicators.
Timeframes: MT5 provides 21 different timeframes.
Charts: MT5 allows up to 100 charts to be opened simultaneously.
Expert Advisors (EA): Like MT4, MT5 also supports EAs with more advanced features.

3. Pending Orders

MetaTrader 4:

MT4 supports 4 types of pending orders:

Buy Limit
Buy Stop
Sell Limit
Sell Stop

MetaTrader 5:

MT5 supports 6 types of pending orders:

Buy Limit
Buy Stop
Sell Limit
Sell Stop
Buy Stop Limit
Sell Stop Limit

4. Accounting System

MetaTrader 4:

MT4 uses a netting position accounting system, meaning all positions in one instrument are combined into one.

MetaTrader 5:

MT5 offers two accounting systems:

Netting: Similar to MT4, used for stock and futures markets.
Hedging: Allows traders to open multiple positions in one instrument, either in the same or opposite direction. This is very useful for hedging strategies.

5. Economic Calendar

MT5 has a built-in economic calendar that provides information on important economic events, which is not available in MT4. This feature helps traders make trading decisions based on fundamental data.

6. Performance and Speed

MT5 is designed with more modern technology, offering better execution speed compared to MT4. This can be an important factor for traders who need fast execution, such as scalpers.

Which One is Better?

The choice between MT4 and MT5 depends on your trading needs:

MetaTrader 4: Ideal for forex traders who want a stable and proven platform. Suitable for traders focusing on forex trading without needing additional features.
MetaTrader 5: More suitable for traders who want to diversify their trading into various instruments such as stocks, commodities, and futures. Also suitable for traders who need more timeframes, pending orders, and more advanced analytical features.

Conclusion

Both platforms have their own advantages. MT4 remains a favorite for many forex traders due to its simplicity and proven reliability. On the other hand, MT5 offers more features and flexibility for traders who want more than just forex trading. Before choosing, consider your trading needs and strategy to determine which platform suits you best.