MT4 vs MT5: Which is Better?
MetaTrader is one of the most popular online trading platforms used globally and its two main versions are MetaTrader 4 and MetaTrader 5. But between MT4 and MT5, which is one best for you? Both MT4 and MT5 are built to enable seamless trading of Forex, Stocks, Futures and CFDs. Offering high flexibility and real-time access to market prices, they allow you to trade multiple orders simultaneously. Using MetaTrader can be beneficial for both beginners and experienced traders. But, to make the most of MetaTrader, you need to know when and how to use MT4 and MT5.
What is MT4?
MetaTrader 4 is an online trading platform used by Forex traders. You can also trade Commodities and Indices through a Contract for Difference (CFD). With MT4, traders view real-time currency prices, perform technical or fundamental analysis, automate trades through custom algorithms, and open or adjust orders. You can also customise charts, orders, and more through MT4 as per your own trading preferences.
What is MT5?
MetaTrader 5 is a multi-asset trading platform that enables you to trade Stocks, Forex and Futures. It offers advanced tools for price analysis, algorithmic trading (Expert Advisor and trading robots), and copy trading. Launched in 2010, MT5 is considered to be improved and more diverse with charting, exclusive indicators, and its widespread ability to trade over 500 markets including Forex, indices, Commodities, Cryptocurrencies, and Stocks.
MT4 vs MT5: Comparing key features
Algorithmic trading uses lines of codes to get detailed instructions for the trader, including tools such as volatility analysis, chart analysis, price arbitrage analysis, or trends analysis in the movement of prices. What makes algorithmic or automated trading attractive is its capacity to remove common human errors. With algorithmic trading, traders limit the chance of making decisions based on emotions. This is why institutions such as investment banks and hedge funds spend significant amounts of money building algorithmic trading models and getting a competitive edge.
MT4 executes algorithmic trading based on an order system. However, MT5’s algorithmic trading function is designed to implement a positional system that allows traders to hold and carry a position for a longer period.
Neither MetaTrader 4 or MetaTrader 5 is an upgrade of the other since both serve a different function altogether. While MT4 is specifically focused on Forex trading, MT5 allows you to trade Stocks, Futures, other Commodities. However, there are a few factors wherein MT5 has the edge over MT4:
- MT5 has faster backtesting, which allows traders to see how well an investment or trading strategy would have performed considering actual results through historical data.
- MT5 has a depth of market functionality that helps measure the supply and demand for assets on the basis of all open positions.
Analytics in both MT4 and MT5 help forecast price movements and assist traders in analysing which assets offer ideal trading opportunities.
- Both MT4 and MT5 allow custom analytics to suit individual trading needs.
- MT4 includes interactive charts with 9 timeframes, whereas MT5 has a total of 21 timeframes.
- MT4 offers 30 built-in technical indicators, while MT5 offers 38.
- Some indicators like the Fibonacci and Elliot tools are available only on MT5.
- MT4 includes 31 graphical objects, whereas MT5 has 44 of them.
- Both platforms include an alert functionality and provide traders with ongoing financial news.
- MT5 has an economic calendar, while MT4 does not. This helps MT5 deliver macroeconomic news from across the globe to the trader instantly.
- Only MT5 offers a multithreaded strategy tester that enables traders to use all computer resources to test and optimise trades.
- An embedded community chat and fund transfer between different accounts is available on MT5.
- MT4 comes with over 2,000 custom indicators and 700 paid indicators.
- MT5 has an unlimited number of charts.
Both MT4 and MT5 have an easy-to-use interface with a few differences:
- MT4 is comparatively simpler and easier to use. It allows traders to customise the interface of the platform as per their individual trading needs and goals.
- MT5 is more complex as it consists of more trading features and markets.
- MT5 has a simple interface layout, but it comes with 11 types of minute charts, 7 types of hourly charts and 365 daily, weekly, and yearly timeframes, which are not available on MT4.
Both platforms enable you to access all your buy and sell orders through a mobile phone.
- MT4 and MT5 offer mobile versions in both iOS and Android. Through this functionality, you can access the markets from anywhere in the world, throughout the day.
- The mobile version includes charts, all trading orders, and analytics. It also allows you to monitor your account statuses.
- Both MT4 and MT5 are compatible with Mozilla Firefox, Google Chrome, Apple Safari, Microsoft Edge, Opera, and Internet Explorer.
Trading and Orders
Both MT4 and MT5 platforms have similar trade execution methods. Traders place orders on MT4 and MT5 through a third-party platform, and the trades are executed real-time.
- MT4 executes trades on request mode, instant execution, and execution buy market.
- MT5 offers an additional execution mode known as an ‘exchange execution’, where you can send orders to an external trading exchange as well.
- MT4 includes four types of orders: buy stop order, buy limit order, sell stop order, and sell limit order.
- MT5 offers the four orders offered by MT4 and two others: the buy stop limit order and the sell stop limit order.
Internal mailing systems
An internal mailing system enables a trader to receive important and relevant information from the broker. The information includes platform features, information about open accounts and orders, upcoming events, and more. The information is received in the form of emails and shown in the Mailbox tab on the platform.
- Both platforms have an internal mailing system, but MT5 offers an attachment feature with it.
- You can only send emails to the admins of the trading server through MT4 and MT5’s internal mailing system.
Hedging and Netting
Hedging is a type of risk management strategy that allows you to offset any potential losses by opening a position opposite to your current position. Meanwhile, netting is the process of reducing financial risks in contracts by combining several financial obligations and reaching a net obligation amount.
- MT4 allows you to hedge your trades and protect yourself from potential losses.
- MT5 allows you to hedge and net your trades, protecting you from potential losses and reducing your financial risk.
Even though both MT4 and MT5 come with several research tools, indicators, and analysis tools, the difference in the number of brokers for the two platforms is huge.
- There are more than 1,200 MT4 brokers in the market, as online brokers prefer this platform over MT5.
- MT5 brokers are only a handful compared to brokers offering MT4.
- There are a few brokers that support both platforms, enabling you to switch between MT4 and MT5 as you please. Blueberry Markets offers both MT4 and MT5 to all traders, regardless of your account size.
FIX API Access
Traders use the Financial Information Exchange API (FIX API) to get real-time financial securities information in the financial markets. Traders and market regulators use the FIX API and share related information before a trade takes place and after it is executed. The confirmation of executed trades and new orders is also shared through FIX API.
- MT4 offers the FIX API integration, enabling you to create strategies and private algorithms for analysing trades.
- MT5 does not offer a FIX API integration to its traders.
A programming language helps MT4 and MT5 function seamlessly. Both platforms use their own custom programming languages with different functions and trading capabilities.
- MT4 is built on a programming language that makes it suitable for beginner traders that are not familiar with creating their own algorithms for trading strategies.
- MT4’s programming language is more straightforward and requires only a few steps to develop the trading program.
- MT5 is built on a more complex programming language that enables traders to write their own trading strategies, alter scripts, and conduct advanced trading analyses.
- Trades on MT5 can be executed with a single function. This is not possible on MT4.
Demo trading allows traders to experiment with the platform by putting in trades without investing real money. It involves trading in a live market without the risk of losing any capital. Demo trading also gives you a realistic experience of how you can utilise different features of the platform.
- Both MT4 and MT5 offer demo trading, providing the trader with a completely risk-free environment.
- Traders can opt to open a demo account first before creating a live trading account. Blueberry Markets gives traders access to a free demo account for 30 days.
MT4 vs MT5: Summed up
|Markets supported||Forex market||
Forex, Futures, Stocks, bonds, and
|Internal email system||Allowed but without attachments||Allowed but with attachments|
|Fund transfer between accounts|
|MQL5 community chat||Not embedded||Embedded|
|Multilingual Unicode||Does not exist||Exists|
|Strategy tester||Single thread strategy tester||Multi thread strategy tester, real ticks strategy tester and multi-currency strategy tester|
|Depth of market (DoM)|
|Time and sales exchange data|
|Order fill policy||Fill or kill only||Fill or kill, return, immediate or cancel|
|Pending order types||4||6|
|Partial order filling policy||Does not exist||Exists|
|Computer bits version||32-bit version||64-bit version|
|Types of transactions||Balance and credit||
Balance, credit, bonus, commission agent,
correction, charge and interest
|Reports||Only tables||Charts and tables|
|Types of order execution||3||4|
|File ZIP compression||Not allowed||Automatic|
MT4 vs MT5: Pros and Cons
|MT4 is ideal for new Forex traders||
It offers more technical indicators, timeframes,
graphics, and chart
|Majority of online brokers supports MT4||Supports non-Forex assets|
|Most Expert Advisor providers opt for MT4||Includes advanced execution modes and order types|
Several chart drawing tools and technical
indicators exist in MT4
|It fits well with seasoned technical traders|
|Less features than MT5||Not beginner-friendly|
|Only supports Forex assets||Few brokers offer MT5|
|Fewer Expert Advisor developers opt for the MT5 platform|
MT4 vs MT5: The final verdict
Both MT4 and MT5 are built with different individual purposes. Since they are not interdependent nor are they an upgraded version of each other, both of them are suitable for different traders. If you are a beginner trader who wants to explore the Forex market, MT4 is the right pick for you. However, if you are an experienced trader who wants to trade other markets and diversify your portfolio, MT5 is the right choice. Blueberry Markets gives you access to both MetaTrader 4 and MetaTrader 5 platforms. You can start using MT4 and MT5 by signing up for a live account or a demo account
Hedging in Forex: How to Hedge Currency Risk
Forex hedging or currency hedging allows you to open multiple trade positions to offset any possible currency risk associated with your current position
What Is PIP in forex trading?
PIPs are essential in forex as they tell the traders about the size of profits or losses that can be made from a particular currency pair.
What Is Gap Trading?
Gaps in the Forex market help traders identify price movement clues, entry and exit signals, and trend reversals.
Top Swing Trading Indicators
Swing trading is all about profiting from market swings. It is a popular speculative strategy where traders tend to buy and hold their assets hoping to profit from expected market movement.
What are Support and Resistance Levels
Support and resistance levels in the Forex market allow traders to understand the market direction and predict future prices to consider in making trade decisions.
What is Forex?
The Forex market offers high liquidity and margin opportunities for you to trade and potentially profit off of exchange rates of currencies. With a daily volume of more than $6.6 trillion in 2019, it is the largest financial market in the world.
What is Margin trading?
Margin trading is one of the most common derivative strategies used in financial markets. It can also be considered tax-efficient as it allows you to choose the size of your wager and exempts profits earned from stamp duties and taxes.
What is Leverage in Forex
Leverage allows traders to hold large positions in the Forex market with fewer capital. With leverage trading, traders can borrow money from a broker and hold larger positions, which in turn could magnify returns or losses.
How To Set a Stop Loss Order in Forex Trading
A stop loss order is used to prevent extensive losses, especially during severe market dip situations. By placing a stop loss order, you can automatically close your position if the market moves against you.
MetaTrader 5: The Complete Guide
MetaTrader 5, the powerful automated trading platform, offers advanced tools for successful trading analysis and trades in the financial markets. Aside from Forex, the MT5 platform helps you trade Stocks, CFDs, and Futures.
What is MetaTrader 4: The Complete Guide to MT4
An advanced trading platform, MT4 has become a norm for seasoned Forex traders as it helps them execute their trades even when their machine is off. It comes with a user-friendly interface, numerous technical analysis tools for forecasting market patterns, real-time currency price data, and much more.
What are Long and Short Positions in Forex?
In Forex trading, you can take long or short positions based on expectations of the market rising or falling. Long or buy positions are maintained when traders expect currency pair prices to increase in the future.
What is a Spread in Forex?
A spread is a cost built into the buying and the selling price of all the currency pairs. In most cases, Forex spreads depend on your Forex broker.
What is a Currency Pair in Forex?
The foreign exchange (Forex) market is the largest financial market in the world. With a daily average volume of about $6.6 trillion and worth over $2.4 quadrillion as of 2021, Forex is a decentralised global market for trading currencies.
How do you trade forex?
Many people want to get into Forex trading and make quick profits, but only a few even know how to start. While trading Forex online has now become easier than ever because of powerful platforms like Blueberry Markets, it can still feel incredibly overwhelming to get started with it.
When Can You Trade Forex?
In case you are wondering is Forex trading profitable, the short answer is yes. But many opt for Forex traders to make fast profits since Forex markets are operational 24 hours for five days a week.
Who trades forex?
Major players in the Forex market are financial institutions including commercial banks, central banks, money managers along with hedge funds. Many global corporations also trade in Forex to hedge currency risk.
Why trade forex?
As the largest financial market globally, Forex trading is one of the most popular investment avenues for many. The liquidity and huge trading volume make Forex trading an option worth exploring.
Forex Margin & Leverage
Forex trading usually provides much higher leverage compared to other financial instruments like stocks. This is one of the primary reasons why so many people are attracted to Forex, and more and more people have started to enter the Forex trading market.
Key steps to making your first trade in Forex
Making your first trade in Forex successfully requires in-depth knowledge about trading basics and Forex trading strategies. The learning curve to trading currencies can seem overwhelming and complex, but when you have the right information by your side, it can make the entire process all the more easier.
How is Forex regulated?
There are several Forex brokers in the Forex market, and amidst those thousands of Forex brokers, it can become nothing less than challenging for traders to find the best brokers.
When you hold a currency spot position overnight, the interest you either earn or pay is the rollover amount. Each currency has a different overnight interbank interest rate, and because you trade Forex in pairs, you also deal with two different interest rates.
Tips for Forex trading beginners
In terms of trading volume, the Forex market is the largest financial market in the world. It is also the only financial market that operates round the clock every day.
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