MT4 vs MT5: Which MetaTrader Version is Better? Comparison

Most traders, if not all, have heard of meta traders irrespective of their trading experience. For starters, MetaTrader is software created and distributed by MetaQuotes Software. Meta Quotes is a reputable company for creating trading software for brokers, exchanges, and banks. For starters, MetaTrader is software created and distributed by MetaQuotes Software.


MetaTrader 4 (MT4) was launched in 2005, while MT5 was developed five years later (2010). Before releasing MT4, MetaQuotes had developed other versions from 2002. 


Essentially, Metatrader software is popular for offering fast execution, a myriad of trading tools. It enables traders to view streaming charts and prices, execute trades, and manage their accounts. Despite numerous updates, MetaTrader 5 has not matched the popularity of MT4, which is currently the most popular trading platform. 


The question is; why is MT4 still more popular than MT5?. More importantly, which platform is better between MT4 and MT5? To answer these questions, it is imperative we explore the features and benefits of using each platform. Contrasting the two will help us make an informed inference.

01


MT4

About Metatrader 4 

Metatrader 4 is a straightforward, functional and straightforward terminal that comes with a user-friendly interface. In fact, it is not overloaded with colossal buttons and information. 

While it was initially designed for trading currencies, you can also trade CFDs on indexes, cryptocurrencies, shares, bonds and commodities. The terminal supports about 30 different languages. In addition, it is a mono-threaded terminal for a 32-bit operating system. However,  you can trade it on 64 bits systems, albeit with compatibility issues. What’s more, it comes with a tester that allows backtesting using historical data. 

But here is the best part. The platform is highly secure. Specifically, it is protected using 128-bit encryption based on an algorithm that uses a digital signature. To give you a clear picture, if a trojan horse attacks your computer, the terminal will be protected from hacking. As if that is not enough, the terminal is free for use. 

MetaTrader 4 (MT4) Brokers in South Africa

XTB

Trading paltforms: MT4 and xStation

Regulation: FSCA, CySEC, FCA, ASIC

Spreads: as low as 0,5 pips

Min. deposit: 1$

Exness

Trading platforms: MT4 and MT5

Regulation: FSCA, IFSC, FCA, CySEC

Spreads: as low as 0,3 pips

Min. deposit: 15 ZAR/1$

XM.com

Trading platforms: MT4 and MT5

Regulation: IFSC, FCA, CySEC, ASIC

Spreads: as low as 1,0 pip

Min. deposit: 70 ZAR/5$

Risk warning: Remember that forex and CFDs are leveraged products and their trading can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

02


MT5

About Metatrader 5

MT5 comes with bells and whistles aimed at enhancing the reading experience of investors. The initial idea of developing Metatrader 5 was to replace Metatrader 4, as it happened with previous versions. However, despite the massive upgrade and updates, the modified version was not very successful. For this reason, Metaquote decided to stick to both versions. In fact, MetaQuotes even mooted stopping giving MT4 licensing and providing support altogether.


Benefits of Using MT5

What are the benefits of using MetaTrader 5?

Depth of the market (dom)

One of the rarely employed handy tools in MT5 is the depth of the market. DOM shows the nearest sellers and buyers orders. In other words, It also shows the volume of traders at a specified price.

Order Accounting system

MT5 comes with a netting feature. This means that it combines numerous order positions for one asset into one order. Netting brings massive convenience because you do not have to track many transactions.

Tester

Although tester is available in MT4, it is much expanded in MT5. In fact, the testing results are much more accurate thanks to the addition of forward testing. But here is the best part, testing that took 20 minutes in MT4 takes about 5 minutes for the same parameters.

Technical analysis

The MT5 comes with more inbuilt indicators to enhance technical analysis.  It also comes with more pending orders types, namely, buy stop limit and sell stop limit.

MetaTrader 5 (MT5) Brokers in South Africa

AvaTrade

Trading platforms: MT5 and MT4

Regulation: FSCA, ASIC

Spreads: as low as 0,9 pips

Min. deposit: 100$


Exness

Trading platforms: MT5 and MT4

Regulation: FSCA, IFSC, FCA, CySEC

Spreads: as low as 0,3 pips

Min. deposit: 15 ZAR/1$

XM.com

Trading platforms: MT5 and MT4

Regulation: IFSC, FCA, CySEC, ASIC

Spreads: as low as 0,6 pips

Min. deposit: 70 ZAR/5$

Risk warning: Remember that forex and CFDs are leveraged products and their trading can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

Comparison between MT4 and MT5 

Similarities

  • Both platforms offer mobile versions via android and IOS smart devices, which allow traders to palace orders from any corner of the world. In addition, the mobile versions allow traders to open and close trades, access analytics tools, interactive charts, and account monitoring. 
  • MT4 and MT5 allow traders to customize their interface to match their trading strategies.
  • Both platforms offer alerts with audio functionality. 
  • They come with inbuilt programming languages. For example, MT4 is designed with MTaQuoates Language 4 (MQL4) while MT5 is designed with MQL5. The programming allows traders to develop custom e EA and indicators.
  • Also, both MT4 and MT5 are available on mobile and desktop devices.


Key Differences Between The Two Platforms

  • MT4 is designed specifically for retail forex traders. On the other hand, MT5 is a state of the art one size fits all platform for multi-instrument trading, including stocks and cryptocurrencies. 
  • The MT5 platform is enhanced, making it more functional, faster and flexible. In other words, a typical process that would take several minutes now happens in fractions of a minute. In addition, it has added several order execution types and several pending orders. All the advancement features are tailored to make the whole process seamless.  
  • While MT4 offers nineteen timeframes, MT5 is designed with a whopping 21 timeframes. 
  • Technical indicators are the single most important tools for technical analysis. MT4 comes with 30 in-built technical indicators. On the other hand, MT5 offers 38 in-built indicators. The best part is that MT5 features additional Fibonacci waves and drawing tools for Elliot waves. In general, while MT4 has 31 graphical tools, MT5 is endowed with 44 objects. 
  • MT5 is designed with an economic calendar. Additionally, a time function is attached to alert traders of incoming high impact economic news. 
  • The trading systems in MT4 and MT5 differ significantly. While MT4 implements the order system, MT5 utilizes the positional system. 
  • Both systems come with internal mailing systems. However, the MT5 mailing system supports attachments. 
  • MT5 comes with a chat function and allows the transferring of funds between accounts.
  • MT5 is multithreaded 64 bit while MT4 is a mono thread 32-bit platform. Since most devices use a 64-bit operating system, MT5 is more efficient than MT4.
  • Both platforms offer instant execution, execution by market and execution on request. While MT4 has three trade execution modes, MT5 offers one more additional execution mode known as exchange execution. 
  • Additionally, while MT4 has four pending order types, MT5 has six. In MT4, the traders have access to sell stop, buy stop, buy limit and sell limit. Besides these four order types, MT5 offers two additional orders: buy stop limit and sell stop limit. 

Other types of order execution include

  • Fix and kill – The fix and kill policy means the order is only executed in full at the specified price. For instance, if the traders want to buy one lot but only 0.8 lots are available at the specified price, the order is not executed. 
  • Immediate or cancel – In this case, the transaction is executed only for the available volume. For instance, if the trader wants to buy one lot of GBP/USD but only 0.8 lots are available, the 0.8 lot order is filled, and the 0.2 lots are cancelled. 
  • Return– In this type of order, when the partial order is executed, the remaining order is not cancelled. Instead, it remains in the market.

Hedging and Netting

While MT4 only supports hedging, MT5 offers both hedging and netting. Netting involves merging open position for one asset. For instance, if you have a running one lot on GBP/USD and then add another lot for the same asset, the two are merged into one position rather than running as two positions.

Netting makes locking quite impossible in MT5. The platform sums together all the traders in one asset. This is one of the biggest downsides of MT5 that has attracted massive criticism. In fact, Metaquotes had to make changes in 2016 to support the two order accounting systems. 

Remember, the whole idea of opening multiple orders is to track trades. For this reason, many traders opt for hedging to capitalize on temporary reversal. Each trade becomes a new order.  This means traders can open trades in an open direction (hedge).Essentially, hedging allows you to open multiple trades for one asset. MT5 also started supporting hedging in 2016.

Interface

The interface of MT4 and MT5 is almost similar to a large extent. But a closer look, you notice that the newer version has additional features. For instance, the view menu now includes the depth of the market features. Additionally, you can now top-up or transfer funds on the file menu. 

The insert menu comes with two additional features: the Scripts and the Experts. In fact, the platform enables you to customize EAs. In fact, it comes with inbuilt software for algorithmic traders.


Which MetaTrader version is better, MT4 or MT5?

Now the big question: Which MetaTrader version is better, MT4 or MT5? MT4 is vaunted for its straightforward features. On the other hand, MT5 comes with a host of great features that would appeal to advanced traders. What’s more, MT5 is more efficient because it offers additional analytical tools, timeframes, and order execution types.

Therefore, if you are a newbie trader looking for a simple trading platform, MT4 will prove a prudent choice. However, MT5 will appeal to seasoned traders looking for advanced trading features. In a nutshell, the choice depends on personal preferences. In general, MT5 comes with upgrades that give it an upper hand over MT4.