The evolution of advanced trading platforms has completely changed the way of trading CFDs and forex. Now, it is not like what it used to be 10 years ago.
The trading platforms were first introduced to the trader back in the 1990s. At that time, these platforms were called trading terminals.
They paved the way for retail trading to grow itself on a popularity basis. The terminals also created an easier pathway for a group of people favoring forex trading and were looking for trading in CFDs as another investment option.
On the other hand, the evolution of these forex trading platforms was started with the introduction of MetaTrader trading platforms by MetaQuotes software corp.
Today, there are several trading platforms available, but two platforms that have changed the way of trading are MetaTrader4 and MetaTrader5.
However, the growing popularity of both these platforms has sparked an MT4 vs MT5 debate. Continue reading this article to understand the difference between these platforms.
MT4 vs MT5: Comparison and Differences
In this part of the MT4 vs MT5 topic, here’s a detailed comparison between the two:
Even though some belives MT5 to be a successor of the MT4 platform, it is actually not. Both these platforms offer different functions and features that serve different sorts of traders.
For instance, the MT5 is a multi-asset, institutional, and multi-function trading platform. However, it somewhere failed to achieve the cult status that the MT4 platform still has.
The MT4 happens to be forex centric, while the MT5 platform focuses on different assets like indices, cryptocurrencies, and commodities as well.
Choosing between MT4 vs MT5 depends on your trading skills, needs, and goals. Here’s a detailed comparison between both platforms, which may help you in deciding on the right one for you.
Mobility:
MT4: This trading platform is completely convenient, meaning that the traders are not restricted to accessing the platform via a PC or a system only.
The platform can be accessed by tablets and smartphones as well. The three different formats by which the platform can be accessed are browser, mobile, and desktop.
Both the variants of the platform, the webtrader and the one for the smartphone section, are completely in compliance with the desktop terminals.
MT5: Just like the MT4 platform, the MT5 is also available for web and desktop. Apart from that, the platform provides services like a freelance database of people who specialize in creating strategies, a virtual hosting service, and some built-in trading tools.
The platform offers 31 different languages so that traders across the globe can use it at their convenience.
The Number of Order Types:
MT4: The platform provides traders with basic order types. The buy limit, buy stop, sell limit and sell stop.
For most traders, these types of orders are enough to cater the needs of their trading strategies and, at the same time, limit the risk exposure and provide better control in terms of entry and exit positions.
MT5: Along with MT4, this platform offers two additional order types: buy stop-limit and sell stop-limit orders. This helps traders by providing good flexibility on how price movement can trigger buy and sells.
These order types are oftenly favored by experienced traders only, while some new traders prefer the MT4 platform.
Security:
MT4: The trading platform comes in with 128-bit key encryption. This secures all the information that is exchanged between the trader and the terminal.
The platform is also known to support a better security algorithm called the RSA. It is an asymmetric encryption algorithm.
MT5: The platform has improved security features to safeguard the accounts for the web platform.
The security features on MT5 include 128-bit key encryption, two-factor authentication, Server authentication, and account database.
Programming Languages:
Both trading platforms use their own customized programming language. This, in turn, equips them with the ability to make customizations as the trader wants.
MT4: This platform is often favored by novice traders who are not looking at creating their own trading strategies in the initial few months of their trading experience.
MT5: Unlike MT4, this platform offers a more complex trading programs language. But the good thing is that you can write to edit the scripts on this platform.
Multi-functionality:
MT4: The firm that led to the development of the platform applied various different functionalities in creating a better environment to trade forex and other financial instruments.
The platform has a plethora of analytics and trading tech; plus, it offers a whole different range for professional traders. When it comes to CFD and forex trading, the platform has a lot to offer. The key pillar of strength for the platform is the presence of algorithmic trading.
It refers to the practice of automatic trading without the need of the forex trader to place and execute orders. Automated trading is done with complex trading systems.
The RA’s or the expert advisors trade on the basis of a predetermined algorithm. To make things even barter, the IDE of the MQL4 is integrated into the platform.
This enables the trader to create a personal bot-advisor for them. This trading robot can vary in terms of complexity, depending on the trader.
MT5: The platform offers similar functions as MT4 with some additional ones, including the downloaded history of trades, access to the data of real-time and real volume, economic calendar, advanced technical analysis, trading signals, built-in technical indicators, and latest financial news, and easy order ladder trading.
Chart Timeframes:
MT4: The platform was designed with simplicity in mind. Novice and inexperienced traders are unlikely to require access to intricate and granular time frame data.
This feature makes MT4 the more straightforward solution, with only the resources you require and none of the complicated capabilities you do not.
MT5: When conducting chart analysis with MT4, traders can choose from nine distinct time frames. MT5, on the other hand, supports 21 different time frames, which is a significant increase over MT4.
These adjustable features are optional for many traders. However, access to these less regularly utilized time periods benefits some traders, as well as certain types of trades, such as CFDs.
This knowledge may be critical for more experienced or seasoned traders to execute well-informed trades.
MT4 vs MT5: Which One Is Best For You?
To understand which platform suits the best to you, you may need to consider the following factors. Alternatively, you can use a demo account to understand the user interface before getting started.
Trading Option:
As MT4 platforms are specially designed for forex trading, it is still considered the best platform to trade forex. The user-friendly interface help traders in executing trading strategy easily.
On the other hand, MetaTrader 5 was created to trade financial markets other than the Forex market, such as stock trading, cryptocurrencies, and commodities, essentially because it is better able to plug into a centralized trading exchange.
Risk Warning: CFDs are complex instruments and pose a high risk of losing money rapidly due to leverage. Most new retail investor accounts lose money when trading CFDs.
Features:
Pay attention to tiny aspects that may affect your trading experience when you assess the best fit between MT4 and MT5.
Both platforms provide hedging in some trades, but only MT5 provides netting, which some traders rely on substantially to manage their relative risk exposure.
MT5 also has a few additional technical indicators than MT4, as well as tools like an economic calendar to assist you in keeping track of important news from different international markets. However, with these new features comes a more sophisticated platform and a steeper learning curve.
MT5 also has features that MT4 doesn’t, such as a multithreaded improved strategy tester, financial transfers between accounts, and an incorporated community chat. These characteristics will not be important to every trader.
System Compatibility:
The MetaTrader 5 platform is faster than its predecessor and runs on both 64-bit and 32-bit window systems.
The forex traders need to set up an execution file before they install the software. It should be noted here that the MT5 platform can run on a 32-bit system too. However, the MT4 cannot work as efficiently on 64-bit systems.
This is rarely the case and especially persists when the traders are using the VPS or multiple CPU cores. Thus, choosing an MT5 platform is best for both sorts of forex traders owning 32 or 64-bit window systems.
Servers:
On the other hand, the server built-ups of both platforms are different. The MT4 has just one dedicated server, and that server disrupts the communication with other servers.
The MT5, on the other hand, provides other servers with different jobs. The servers work together and can achieve a better hardware utility and can also yield better results.
The working of different platforms can help the traders to achieve resource optimization in a better sense.
There are four chief servers that the MT5 platform uses: The trade server, the access server, the backup, and the history server. When it comes to the MT4, it only provides one server called the server engine.
The MT4 platform provides the reports only in an HTML file type. The MT5, on the other hand, provides XML and HTML, both types of reports.
How To Get Access to MT4 and MT5 Platforms?
The most convenient and easy way to access the MT4 and MT5 trading platforms are to open an account with a reliable and good broker.
Are you looking for a broker that can help you to trade on the MT4 trading platform? Here’s a leading and best recommended online broker ABInvesting.
With three chief trading accounts, the traders can trade on more than 300 CFD tradable assets. The three chief trading accounts that the broker offers are silver, platinum, and gold.
Conclusion:
In this debate of MT4 vs MT5, We found out that the MT5 trading platform is a little bit more complex than the MT4 trading platform.
The MT4 can run on a low spec system, while the MT5 needs more juice.
The traders can use the platforms as they like, but we recommend using the MT4 platform. It is made majorly for trading forex, but since it focuses on one asset, it is the best when it comes to trading in currency pairs.
The MT5 comes with more functions and hence comes, extreme complexities. The platform cannot be used by beginner traders. The traders need to understand that the platform can help them till the time they understand what is going on.
When the platform goes ahead with the trader to provide more ease, it sometimes moves towards complexity, and that is exactly what happened with the MT5.
That’s all! Hope you’ve understood the topic’ MT4 vs MT5′ better.
Risk Warning: CFDs are complex instruments and pose a high risk of losing money rapidly due to leverage. Most new retail investor accounts lose money when trading CFDs.
