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MT4 and MT5 are abbreviations for the most popular investment platforms. The tools have been praised for their lichen-like interface, but also for their many useful features, which both beginners and advanced traders enjoy using.
MT4 and MT5 – what exactly is it? MT4 and MT5 comparison
MT4 is the Meta Trader 4 platform, created in 2005 by the software development company MetaQuotes. Since then, the tool has become the most popular trading platform, primarily due to its multifunctionality, as well as its ease of use. On the other hand, MT5, or Meta Trader 5 platform, is its improved version, which appeared in 2010. However, the new version has not gained more popularity than its predecessor.
It is worth knowing that MetaQuotes Software Corp. developed the first investment platforms for trading Forex, stocks, CFDs, and futures in 2000 and 2001, but they did not become popular among traders. In 2003, the Meta Trader 3 platform appeared, with many features and an expanded programming language. However, it lasted only three years.
Meta Trader 4 platform
MT4 was initially designed for retail trading in the foreign exchange market. It features a user-friendly interface, mobility, and functionality. It is intuitive and has not been overloaded with too much information, buttons, and panels. Some of the functions are duplicated in menus on the toolbar, as well as in menus that can be called up by pressing the right mouse button.
What are the features of the Meta Trader 4 platform? Its main features are:
- It is designed for forex trading. The forex trader can trade currencies, as well as CFDs on indices, bonds, stocks, commodities, and cryptocurrencies,
- MT4 is a platform designed for 32-bit operating systems. It will also work on 64-bit operating systems, but in this case, there may be compatibility issues,
- MetaTrader 4 supports 30 languages.
Another reason why the platform has gained so much popularity is the technical and marketing support that developer MetaQuotes provides. Developers are constantly working on updating it, as well as improving the platform’s code.
If a trader wants to test the platform on a demo account, depending on his expectations and needs, he can download either the desktop or mobile version of the platform for a mobile device.
The MT4 demo account allows you to get acquainted with the functions of placing market and pending orders, as well as get acquainted with all the technical indicators, as well as chart objects, and try to open the first trades.
Meta Trader 5 platform
MT5 is a new, improved, and more modern platform with many different instruments. It was released in June 2010 and was thought to replace Meta Trader 4.
At one point, MetaQuotes decided that it would drop support for MT4 and stop selling the license to promote the new modification. However, despite the improvements and updates, Meta Trader 5 was not as successful as MT4, so the company released both the first and second versions.
Meta Trader 4 is still the most popular investment platform on the financial market. However, if a trader wants to familiarize himself with it, he can either download the desktop version or the mobile version for mobile devices.
Comparison of Meta Trader 4 and Meta Trader 5. Differences between MT4 and MT5
Before making a choice, it’s worth comparing the two platforms to find out which will be best. MT5 is an enhanced version of MT4, which is designed, which is for 64-bit operating systems. It is a multi-market platform. It features speed and is more functional and flexible.
Is the newer MT5 version better than the MT4 version? Trades that take several minutes to process on Meta Trader 4, its newer version process in seconds. All the improvements are designed to speed up internal data transfer processes, as well as offer traders new multi-level tools.
MT4 only allows hedging, while Meta Trader 5 also allows netting. An example of the latter is if a trader were to enter a long position on 1 lot, such as the EUR/USD pair, and then enter a second lot within the same market. The first order would become 1 position instead of 2 separate ones.
What’s the major difference between MT4 y MT5?
On the Meta Trader 5 platform, funds can be transferred between accounts. The Meta Trader 4 platform is designed for Forex CFDs, while MT5 is a more modern, multi-functional trading platform that covers both centralized and non-centralized financial markets. This includes stocks, foreign exchange trading instruments, and equities.
Is mt5 faster than mt4? The newer version is definitely faster and more efficient. Both MT4 and MT5 have internal mailing systems, but the latter offers this type of service, which includes attachments. On both platforms, traders do not have the ability to send emails outside the MetaTrader system. They can only be sent to trading server administrators.
Features
MT5 is equipped with more intervals, indicators, as well as trading functions. However, this does not mean that it is better than MT4. The Meta Trader 4 platform still leads the way.
Instruments available for trading
Neither on one version of the platform nor on the other is it fixed what you can invest in. The financial instruments available are determined by the broker with whom the trader chooses to open an investment account. The main difference between mt4 and mt5, however, is that cryptocurrencies can only be traded on the Meta Trader 5 platform.
Technical indicators
Meta Trader 4 offers 30 built-in technical indicators. If this is not enough, you can download 2,000 custom indicators from the free code base. Moreover, this version of the platform also offers paid indicators.
MT5, on the other hand, provides access to 38 built-in indicators, as well as, as in MT4, access to many thousands of additional free and paid indicators.
Chart analysis tools
Meta Trader 4 is equipped with 31 chart analysis tools, including channels, lines, shapes, arrows, etc. In contrast, the Meta Trader 5 platform offers as many as 44 such tools.
Intervals
MT4 offers 9 time frames – minute, hourly, daily, weekly, and monthly. MT5, on the other hand, offers 21-time frames alone. Such a wide choice gives traders an advantage related to the possibility of a deeper analysis of assets.
Orders
In the case of Meta Trader 4, four orders are available – buy limit, buy stop, sell limit, and sell stop. As for its younger version, on the other hand, there are 6 types of pending orders, that is, those offered by the Meta Trader 4 platform and 2 more – sell stop limit and buy stop limit.
Macroeconomic calendar
The Meta Trader 4 platform does not have a macroeconomic calendar. On the other hand, its newer version offers an integrated calendar that has macroeconomic data and these are updated in real-time.
Demo account
Both the older version and the younger version provide trading based on a demo account. This means that it is possible to try out the capabilities of the investment tool in real market conditions, without investment risk. The point is that the investor does not trade with real money, but with virtual money so that if he makes a wrong decision, he does not lose his money. On the other hand, if he makes the right decisions and generates a profit, he won’t be able to withdraw it either.
Supported operating systems
Both the MT4 and MT5 are available in 3 formats:
- desktop – Windows and macOS, Linux,
- mobile – Android and iOS,
- for browsers – Chrome, Firefox, Opera, Edge, Safari, and Internet Explorer.
Appearance
Both versions are very similar in terms of usability and appearance. They differ slightly only in the appearance of the menu, but the functions generally used are the same. In the case of one and the other, the interface can be adjusted to suit your own commercial needs.
Costs
Both MT4 and MT5 are free to download. You do not have to pay any fees for using the platform. Trading costs, spreads and commissions are fees that are charged by the selected broker.
Advantages of Meta Trader 4
The main advantages of the Meta Trader 4 platform over other investment tools include:
- Multifunctionality – the trading platform has 3 order execution modes, including trailing stop. Moreover, it is equipped with 30 built-in technical indicators, as well as 9-time frames,
- A trader can program in MQL4 – this platform allows adding custom tools, such as scripts or indicators. One can also create custom trading tools in MetaEditor,
- Equipped with a tester – the trader can test manual and automated trading strategies on historical data, as well as evaluate the performance of the trading system and record the results of historical analysis to analyze statistics. No other trading platform, except Meta Trader 5, has this type of functionality built-in,
- It provides support from a community of other traders. MQL5 is one of the largest communities of traders. There you can copy signals, discuss trades, as well as order original indicators, or trading robots and scripts for development. This programming language is one of the most popular, as well as the most convenient for creating original trading systems, which is another advantage of Meta Trader 4,
- Security – on this platform, the exchange of information between the trader, the terminal, and the platform servers is encrypted with 128-bit keys, which are based on a special algorithm. It uses a digital signature. Even in a situation where a Trojan would get into the computer or smartphone, the trading platform is protected from hacking.
Meta trader 5 – advantages
MT5 is the most modern trading platform, which has a range of financial instruments. With it, the developers have tried to improve the options for technical analysis, testing, as well as order execution options. Some of the features are much more convenient than in the previous version.
The advantages that this platform has are:
- Data that relates to the depth of the market, or DOM. As for the Meta Trader 4 platform, it is of little use and rather rarely used. Meta Trader 5, on the other hand, is a real trading tool worth using. Volumes have been added, which are very clear in stock trading,
- On the MT5 platform, DOM displays the correct information about the upcoming orders of buyers and sellers with the price conversion step, as well as the actual volume of orders at specific quotes,
- Order clearing system – a netting system has been added to Meta Trader 5. The chart displays one order, which is the average value of all open positions for a single instrument. This is very convenient, as the trader does not have to keep track of multiple trades,
- Tester – a multi-currency function has been added to the Meta Trader 5 tester, and backtesting statistics have been expanded. Test results and optimization of either EA or indicator on MT5 became more accurate, thanks to the introduction of forward testing. What was tested on the Meta Trader 4 platform for 20 minutes, for the same parameters on its newer version testing takes 5 minutes,
- Time frames – several time frames are available on Meta Trader 5. On MT4, on the other hand, you need to install an additional script designed to analyze non-standard time frames,
- Technical analysis – for the younger version of the platform there are more indicators for technical analysis. Some of these have to be added manually to Meta Trader 4. There are also two additional pending orders, namely Buy Stop Limit and Sell Stop Limit.
The best brokers that provide the MT4 platform
Below is a list of brokers that operate on Meta Trader 4:
- XTB – this is primarily a Forex and CFD broker, in turn, in some countries it also allows trading in stocks, such as in Poland. It is a global broker with more than 10 offices around the globe. In European countries, it serves clients through either the UK or the Polish entity. XTB is listed on the Warsaw Stock Exchange. The company is transparent, as it regularly publishes its financial data. It is an authorized and controlled broker by various authorities, including the Financial Supervisory Commission or the FCA of the UK,
- ETX Capital – has been in operation since 1962, and in 2002 launched TradIndex private customer service. It later rebranded as ETX. It is an established broker that will provide great customer service. Its MT4 offering is very good and provides access to a full range of markets, which are also available on other investment platforms,
- IG – this broker is one of the oldest brokers that deals with spread betting, and is therefore an innovative broker. In addition to the Meta Trader 4 platform, it also provides a proprietary one,
- City Index – is also one of the largest brokers that deal with spread betting. Also, they offer their own investment platform and full access to markets, as well as relatively low spreads on major currency pairs.
Top brokers that make Meta Trader 5 available
The list of brokers that make MT5 available are:
- XM.com – this is the trading name of Trading Point Holdings Ltd. It is regulated by the Cyprus CySEC. It is also a broker registered by the European Union and is based in Cyprus,
- Octa Markets – the broker was established in 2011, the office serves clients from more than 100 countries around the world. The company operates in accordance with IFSA regulations.
Is it possible to trade Meta Trader without a broker?
The answer to this question is – no. Meta Trader 4 and Meta Trader 5 are merely investment platforms that provide the necessary tools for making investments.
That is, for both platforms, the key is to choose the right broker. It is best to bet on one that helps you get acquainted with the investment tool, and also provides educational materials. It should also guarantee a wide range of financial instruments and favorable trading conditions.
It is worth betting on reputable brokers that have an established position in the financial market and good reviews on the Internet.
MT4 or MT5? Which to choose for trading?
Many people wonder which platform will be better. It all depends on what the trader on the intention to use it for. The more popular one in the world is Meta Trader 4 and most traders choose it. However, this does not mean that Meta Trader 5 is an inferior platform. After all, it allows you to go beyond CFD instruments. It allows traders who have been exposed to trading on MetaQuotes software to trade on regulated drawdown trainers, such as stocks or futures.
On the previous version of the platform, there was no such possibility. In addition, the developer of Meta Trader is no longer developing the Meta Trader 4 platform. In contrast, its younger version is constantly being developed and supported. It is best to set up a demo account on both platforms and see which one will best suit your individual investment needs.
Why are Meta Trader platforms so popular?
Although Meta Trader was not created with community trading in mind, they offer many tools and features that allow for this type of investment. The signal market available in this community allows traders to copy strategies from signal providers that have been approved. This type of service can simply be purchased for a fee, which is usually in the form of a subscription.
One of the main reasons why Meta Trader platforms have become so popular is a large number of Expert Advisors available, as well as their simple integration into the platform. They are used are the MT4 and MT5 platforms to get automated trading systems up and running. Most of them have a set of customized parameters that allow users to specify, among other things, size and risk attributes or warnings, and other elements that can be configured before enabling automated trading.
Strategy and EA testing capabilities are one of the most functional features of Meta Trader platforms. They allow you to test each individual EA in the Strategy Tester section so that they can perform on historical data, using a procedure called backtesting.
Such a test mode is useful when a trader wants to see how an EA would perform on historical data at a specific time interval and for a given instrument. In this way, the Meta Trader trading platform gives you the opportunity to watch an operational simulation to find out if the strategy is likely to be profitable.
How to choose an investment platform?
Choosing the right forex trading platform is very important for the investments you make. If the platform has a lot of useful features, and also works flawlessly, the trader’s investments will certainly be more effective. What to pay attention to when looking for a good investment platform?
Ease of use
Can I use the MT4 platform on my smartphone? A window trading platform should be relatively easy to use so that a trader can quickly make fire moves and make trades. When using the platform in a browser or on a smartphone, it is worth checking that it is easy to use and intuitive and that its functions are easily accessible.
If an opportunity arises, a trader should be able to make moves in the shortest possible time. After all, time is money, and it matters especially in the case of day trading, which involves making several to dozens of different trades each day. A trading platform should be user-friendly and operated in an intuitive way, as well as have easily accessible features.
Social trading function
Social trading is the ability to review and automatically copy the investment decisions of other traders. This type of function allows you to set up automatic acceptance of either buy or sell orders from a specific broker into your portfolio.
Demo account
Regardless of the asset class, investing involves some risk. Concerned about the cash and success of their clients, brokers allow the opening of a demo account in the first place. This allows the investor to check the functions of the chosen platform, as well as learn how the market works. All this without incurring any investment risk and losing his own funds.
The user trades only virtual money. Thanks to this, on the one hand, he does not lose funds when he makes bad investment decisions, but if he is successful – he will not be able to withdraw any money either.
Support
Before a trader decides to choose a platform for trading, he should verify whether it provides support. A broker that offers quality services also provides support that:
- Is available every day of the week,
- Is available in English and other languages,
- Various forms of support are available – by phone as well as live chat. Should questions arise that relate to fees, payments, or the operation of the trading platform?
Forex broker – how to choose a good one?
A broker is a company that provides an investment platform that investors can use to make trades in the stock markets. Choosing the right broker is important because brokerage companies offer different terms and transaction costs. They also operate in different models – some of them only broker transactions, while others compete with the investor for a profit. Most reputable brokers, in addition to their proprietary platform, also offer the option of trading on Meta Trader 4.
Security
The most important thing when choosing a broker is security. After all, the investor entrusts him with his money, so attention should be paid to this. To guard against fraud, it is best to bet on a reputable broker that is regulated by valuable regulatory bodies.
In Poland, the body that controls the activities of companies is the National Financial Supervision. Brokers registered in Poland are subject to it. However, they can also be regulated by authorities from other countries, including the FCA of the UK, and Cyprus’ CySEC. With proper regulation, the investor is assured that his funds are safe and will be able to pursue his claims fairly in case of any problems.
Transaction costs
An important issue that investors pay attention to is, of course, the fees for making investments. While platform, such as Meta Trader 4 is downloadable for free, each broker sets its own fees, which it charges for different services. That is, one may charge for opening and maintaining an investment account and others only charge costs in the form of either a spread or a commission.
Both the spread and the commission can vary in amount depending on the broker chosen. Some of them charge spreads of 0 pips. Therefore, before choosing a particular broker, it is worth looking at its offerings and terms, and trading costs. Sometimes the lack of account fees is not so profitable at all, as the broker may charge high spreads or commissions. Therefore, it is worthwhile to carefully review all the costs associated with investing with the selected broker.
Available markets
Like trading costs, the range of markets and financial instruments depends on the broker in question, not the trading platform. As a rule, the more assets available, the better. Before creating an investment account, a prospective investor should figure out whether the broker he chooses has the financial instruments he is interested in. It is best to choose a broker that offers multiple markets right away, because as the investor gains experience and skills, he may want to make investments in more complex financial instruments.
You may also read: Is Saxo Bank broker forex good?
Educational section
In addition to offering standard services, many brokers also provide a training section, which is useful, especially for beginners. It is worth checking in what form the educational materials are offered, such as videos or training articles.
Quality of order execution and slippage
Of course, low trading costs are a huge plus, but the performance of the platform is also of great importance. It should function flawlessly, because any delay in the trader’s movements, will affect the generation of profit or loss.
Permission to scalp
The selected broker should not impose a limit on trading styles. If a trader does a lot of fast trading, he should make sure that the broker he has chosen does not impose a limit on the time that applies between opening and closing a position.
Custom tools and add-ons
The original add-ons created by brokers often go a long way in improving trading. It is worth noting whether such features as social trading, copy trading, etc. are available.
Types and models of operation of Forex brokers
The type of broker is an important criterion to consider when choosing a broker. It is important to remember that there is no such thing as the best Forex broker, as each has its own advantages and disadvantages.
There are several types of brokers in the financial market that use different models:
- Market Maker,
- Electronic Communication Network,
- Straight Through Processing.
Market Maker
This is the most popular type of broker. In this model, the broker acts as a market maker, that is, he is a party to the transaction. The trader, by opening trades, enters into them with the broker, and it is the broker who decides whether he will secure the selected trades in the interbank market. In the model presented, traders do not have direct access to the market, but only see a representation of the market at the selected broker.
Electronic Communication Network
ECN is a less popular type of broker and occurs less frequently than the previous one. An ECN is a broker in which the broker is an intermediary, not a party to the transaction. The client’s order is transmitted to the Electronic Communication Network, a platform that connects liquidity providers with liquidity takers. Orders can be seen and accessed in order books by all market participants, and are concluded at the best buy or sell rate, which is issued by liquidity providers.
Straight Through Processing
This is a model in which client orders go straight through to a liquidity provider, i.e. a bank, investment corporation, financial institution, etc., and the broker is only an intermediary for these transactions. Liquidity providers offer investors the actual market price of the order. With this type of broker, there is no dealing desk, and the order is anonymously transmitted to the liquidity providers.
Although currently, all types of brokers are available to retail investors, MM brokers are the most popular. This is because, over the past few years, technology has reduced most of the differences between MM and STP/ECN brokers to the point where they are almost invisible in day trading. Nowadays, trading with either an MM or STP broker, a trader should not notice any difference in the broker’s operating model.
Forex trading – useful tips
Choosing the right platform is crucial for successful trading. However, it is worth learning about other principles, the application of which will allow you to reduce investment risks and make more effective investments.
Portfolio diversification
Although at first glance this may seem like a very complicated concept, in reality, it simply involves investing the capital held in a variety of financial instruments, not just one type, such as stocks. On the other hand, if an investor wants to invest money only in one type of asset, then he should choose different industries. This will reduce the investment risk and protect at least part of the invested capital.
Acceptance of risk
Risk is, of course, worth fighting against in various ways, but it is impossible to eliminate it completely. Therefore, it is best to simply accept them. This is an element inherent in investing. Always keep in mind that the money invested can be lost.
Learning in the background
Investing involves constantly expanding your knowledge, and you should be prepared for this as well. It is best to get knowledge from several different sources. If a person wants to get serious about investing, he or she should opt for an investing course. Such training courses are available both online and stationary.
It is also a good idea to educate oneself by using webinars, ebooks, or audiobooks, as well as articles that are posted online. To be a good investor, you need to keep up to date with investment news and deepen your knowledge of investing.
Investing spare funds
The idea here is to use the money that is not needed for other important expenses, such as monthly living, for investing. If an investor loses his capital, it should not negatively affect his budget. Moreover, one should not borrow from loan companies or loved ones in order to have for investing.
Investing according to your knowledge
When starting the adventure of investing, it is best to start with small steps. After gaining knowledge about a particular financial instrument, it is best to invest only in that one. It is not worth investing funds in assets you have no idea about. Only over time should you learn new financial instruments and expand your investments.
Investment strategy
Do not start investing without a prepared plan in advance. Such action will certainly do more harm than good. It is worthwhile to take a strategy in advance, according to which you will have to follow. This way the investor knows what to do at any given time and what steps to take.
You can use existing investment strategies or use selected elements and create your own strategy. It all depends on the needs of the investor and his expectations from the investment.
You may also read: Forex trading apps
Choosing the right broker
In addition to choosing a platform for trading, it is also important to choose the right broker. It is worth paying attention to such issues as security, available financial instruments, the e-investment platforms provided, as well as the educational section, and the possibility to test the platform on a demo account (read also: Forex demo account).
MT5 is an updated trading platform of the latest generation, which is equipped with several innovative features. In addition to CFDs and currencies, you can invest in stock futures.
The platform also supports more sophisticated trading strategies (read also: Forex strategies). Compared to MT4, MT5 provides many more financial instruments. It is also a better solution for investors who operate on stocks and futures. Although MT5 has a much more modern look in terms of layout, as well as how to navigate the platform, it still retains many elements that are characteristic of MT4.
Mt4 or mt5 for beginner? However, Meta Trader 4 is still the most popular trading platform, but its newer version is also appreciated by many traders, especially due to its greater number of functionalities, but also other additional capabilities. These are legendary investment tools that both beginners and advanced traders will be happy with.
