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Ask any beginner or seasoned traders if they use MetaTrader 4 or MetaTrader 5 to trade their preferred instruments. It is fair to say that 9 out of 10 traders would answer ‘yes’ to this question.
But between MetaTrader 4 and MetaTrader 5, which one is more useful, and what exactly are the differences between these two platform versions?
MetaTrader 4 (MT4): Simple Forex Trading For Everyone
Launched in 2005, MetaTrader 4 is a platform that has become the preferred choice among forex traders. Known for its ease of use and practical features with a strong focus on currency trading, MT4 offers a user-friendly trading experience for both beginners and experienced traders.
Features Of MetaTrader 4
1. Forex-Focused
MetaTrader 4 is designed specifically for forex trading and provides essential tools for analysis and execution.
2. Customisable Charts And Indicators
MetaTrader 4 offers basic charting support with 30 technical indicators and 31 graphical objects.
3. Automated Trading With Expert Advisors (EAs)
MetaTrader 4 users can deploy automated strategies, backtest potential strategies, and enhance their trading experience through algorithmic trading using EAs.
4. Fast and Smooth Performance
Designed to run efficiently across devices, MT4 has proven to remain responsive even during volatile market conditions.
Advantages Of MetaTrader 4
1. User-Friendly Interface
The intuitive MT4 interface makes it easy to access the trading functions you need.
2. Wide Broker Support
MetaTrader 4 is offered by the majority of CFD brokers.
3. Algorithmic Trading
Traders can automate strategies using EAs to execute trades and perform analysis. They can also backtest strategies using historical data before entering the market.
4. Technical Analysis Tools
MT4 provides a wide range of technical indicators and charting tools for conducting technical analysis.
Limitations of MetaTrader 4
1. Outdated Technology
MT4 uses the older MQL4 programming language. This limitation can restrict the sophistication of custom-built indicators and EAs.
2. Limited Timeframes
MT4 offers a relatively small selection of timeframes. Traders who require more unique or specific timeframes may find these limitations restrictive.
3. Hedging Restrictions in Certain Regions
MT4 does not support hedging or netting in certain jurisdictions.
MetaTrader 5: Advanced Tools For Multi-Asset Trading
MetaTrader 5 is an upgraded version of MT4 and offers a broader range of tools for multi-asset trading.
While MT5 retains the core features of MT4, traders gain access to additional trading tools and asset classes, making it more suitable for professional traders looking to diversify their portfolios beyond forex.
Features Of MetaTrader 5
1. Multi-Asset Support
In addition to forex, MT5 is designed for trading stocks, commodities, indices, and cryptocurrencies. It is built for traders who prioritise portfolio diversification.
2. More Order Types And Timeframes
MT5 introduces two additional order types (Buy Stop Limit and Sell Stop Limit) and supports 21 timeframes. As a result, traders benefit from greater flexibility compared to MT4.
3. Economic Calendar
MT5 includes an integrated economic calendar and news feed, allowing traders to track events that may impact their trading strategies.
4. Updated MQL5 Programming Language
The more modern MQL5 language enables the development of more complex automated trading scripts.
5. Depth Of Market (DOM)
MT5 features Depth of Market (DOM), which displays bid and ask prices across multiple levels. This feature is useful for traders assessing market sentiment and liquidity.
6. More Indicators And Analytical Tools
With 38 technical indicators, 44 graphical objects, and a wide range of analytical tools, MT5 provides a data-rich environment for in-depth analysis.
Advantages of MetaTrader 5
1. High Performance
MT5 can handle more indicators, timeframes, and chart windows without sacrificing speed or stability.
2. Hedging
Traders can open both buy and sell positions on the same asset, allowing for more flexible risk management.
3. Comprehensive and Versatile
Traders with diverse trading styles may find MT5 more suitable, as it offers more comprehensive features compared to MT4.
Limitations Of MetaTrader 5
1. Less Popular
MT5 is not as widely adopted as MT4. As a result, more brokers continue to offer MT4 than MT5. In addition, many traders prefer to stick with MT4 due to familiarity.
2. Smaller Community
MT4 has a large user base and developer community that actively contributes support, insights, and resources. In contrast, the MT5 community is smaller, which limits available support and resources.
3. More Complex Platform
The advanced features of MT5 may present a steeper learning curve for new traders.
Summary Of Key Differences Between MetaTrader 4 And MetaTrader 5
Conclusion
Are you still unsure which platform is best suited to your trading needs?
You may wish to consider the following questions and answers:
1. Do you focus on only 2–3 assets?
If so, MT4 is more than sufficient. However, if you plan to trade forex, cryptocurrencies, equities, commodities, and indices, MT5 would better meet your requirements.
2. Do you rely heavily on indicators and economic events when making trading decisions?
If yes, you will find that MT5 offers a broader range of technical and fundamental indicators to support your decision-making process.
3. Do you require faster backtesting and algorithmic trading capabilities?
If so, MT5 is more suitable, as it operates using the MQL5 programming language. This language is capable of executing more complex programmes at greater speed.
4. And most importantly… are you new to trading?
For those who are just starting out in the trading world, particularly in forex or gold, MT4 is sufficient for your needs.
You may still choose to use MT5, but be aware that it takes time to understand its additional features. As a beginner, you are unlikely to fully utilise MT5 to its maximum potential.
It is recommended that you start with MT4, as it can still support you with basic analysis, asset selection, market entry, and the opportunity to generate profits if the market moves in your favour.
Further reading: Visit our MetaTrader 4 and MetaTrader 5 pages.
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