MetaQuotes Software Corp. introduced the initial trading platforms for Forex, CFDs, stocks, and futures in 2000 and 2001. Despite having a limited set of trading terminal features, these platforms failed to gain popularity among traders. In early 2002, the company released MetaTrader 3, a platform that boasted significant improvements in programming language and functionality.
The platform has been in existence for three years.
In 2005, MetaQuotes, the software development company, created MetaTrader 4. This platform quickly rose to prominence due to its versatility and user-friendly interface, making it the most favored trading platform.
For more information on MetaTrader and to explore the features of MT4, you can refer to the article "Learn how to use this online platform in trading."
An upgraded version of this trading platform, MT5, appeared in 2010. However, MT5 is not more popular than MT4. Please continue reading this article, and you will learn about the advantages of MetaTrader 4 and what makes the MetaTrader 5 platform unique.
MetaTrader 4
MT4 was originally designed for retail trading in forex. MetaTrader 4 is so popular because it is feature-rich, simple to use, and portable. The platform has an intuitive interface; it is not overly cluttered with information, panels, and buttons. Some of the functions of the menu on the toolbar and the menu called by the right mouse button are the same.
Main features of MT4:
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The platform is designed specifically for forex trading. Here you can trade currencies as well as CFDs on indices, stocks, bonds, commodities, and cryptocurrencies.
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MetaTrader 4 is a single-threaded platform for 32-bit operating systems. It also runs on 64-bit operating systems, but compatibility issues may occur.
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The MT4 platform supports more than 30 languages.
Another factor contributing to the popularity of MetaTrader 4 is the marketing and technical support provided by its developer, MetaQuotes. This software development team works to upgrade and improve the platform code. Moreover, the platform's licence is affordable to brokers, so MetaTrader products are more popular than other platforms.
If you want to test MT4 features on a demo account, you can download the desktop or mobile version of the platform via this link. Then run the installation file - the platform will be installed in 5 minutes. From the File menu, select Open New Account and follow the prompts. On a demo account you can test the functionality of placing market and pending orders, familiarise yourself with technical indicators and chart objects, and try to make your first trade.
advantage
The main advantages of MT4 compared to other platforms are:
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The platform is feature-rich. The platform features three order execution modes, nine order types (including trailing stops), thirty built-in technical indicators, and nine time frames.
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You can use MQL4 for programming. The platform allows adding custom tools—scripts, Expert Advisors (EAs), and indicators. You can also create your own trading instruments in MetaEditor.
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It has a tester. You can manually and automatically test trading strategies based on historical data, evaluate the performance of a trading system, and record backtest results for statistical analysis. Except for TM5, no other trading platform has such functionality.
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It provides traders with community support. MQL5.com is one of the largest communities of traders, where you can copy signals, discuss trades, order original indicators, expert advisors, trading robots, and scripts to be developed. The MQL4 programming language is one of the most popular and convenient languages for developing original trading systems, which is another advantage of MT4.
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Has security. In MT4, the exchange of information between traders, terminals, and platform servers is based on a special algorithm using digital signatures, encrypted with a 128-bit key. Even if a Trojan virus invades a computer, the platform is protected from hackers.
Another advantage is that traders can use the trading platform for free.
MetaTrader 5
MT5 is an improved and state-of-the-art multi-asset platform. MetaTrader 5 was first launched in June 2010. The developers believe that MT5 will completely replace MT4, just as MT4 replaced previous versions.
At some point, MetaQuotes even decided to drop support for MT4 and stop selling its licences in order to promote the new terminal. But "something went wrong." Despite updates and upgrades, MT5 was not as successful as MT4, so MetaQuotes decided to use both versions.
MetaTrader 4 remains the most popular forex trading platform. However, if you want to get familiar with MT5, you can download its desktop or mobile version via this link.
Next, I will introduce the differences between MetaTrader 4 and MetaTrader 5. I will provide a few tips for novice traders as to which one is better, MetaTrader 4 or MetaTrader 5.
Advantage
MetaTrader 5 (MT5) is a state-of-the-art multi-asset trading platform. In MetaTrader 5, developers have tried to upgrade technical analysis options, testers, and order execution options. Some of its features are easier to use than previous versions.
Advantages of MT5 compared to MT4:
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Depth of Market (DOM) data. In MetaTrader 4, the DOM has little use and is rarely used. In MetaTrader 5, DOM is a real trading tool. The trading volume added by the developers is helpful for stock trading.
In MT5, Market Depth displays information about recent orders from buyers and sellers, including the step size of price changes and the actual order volume for a given quote.
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Order accounting system. The developers added a netting system to Metatrader 5. The chart shows only one order, which is the average of all open positions for an asset. This is convenient because you don't have to keep track of many transactions.
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tester. Added multi-currency functionality to the MT5 tester and expanded backtesting statistics. Testing and optimising the results of expert advisors or indicators have become more accurate in MT5 thanks to the introduction of forward testing. What was tested in MetaTrader 4 for 20 minutes will only take 5 minutes in MetaTrader 5 using the same parameters.
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time frame. MetaTrader 5 has some non-standard time frames. In MetaTrader 4, you have to install additional scripts to analyse non-standard time frames.
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technical analysis. MT5 has more built-in technical indicators. You need to add some of these indicators to MT4 manually. MT5 also has two additional pending orders: the buy stop limit order and the sell stop limit order.
Compare MetaTrader 4 and MetaTrader 5.
Let’s compare MetaTrader 4 and MetaTrader 5. Which one is better? MT5 is an upgraded version of MT4 and is designed for 64-bit operating systems. MetaTrader 5 is a multi-market platform.
It's faster, more flexible, and more practical. What takes minutes on MT4 will take seconds on MT5. The MT5 platform is a multi-threaded platform.
For example, you can run the optimisation process with the number of threads corresponding to the number of cores. The number of pending orders increased, and the order execution policy also changed. All these upgrades are designed to speed up the internal data transfer process and provide traders with new multi-level tools to build complex trading systems.
MetaTrader 5 is a multi-asset trading platform that allows you to trade FX and non-FX assets. By using MT5 features and upgraded market depth capabilities, you can profit from futures, options, and other derivatives trading. You can also trade forex at the same time.
| МТ4 | МТ5 | |
|---|---|---|
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Order Execution Policy |
Fill or kill |
Fill or kill Execute now or cancel. return |
| Hedging/Netting | Hedge only | Hedging and netting |
| Types of pending orders | 4 | 6 |
| market depth | No | Already included |
| Technical indicator/chart object | 30/31 | 38/44 |
| time frame | 9 | twenty one |
| Strategy tester | single thread | Multithreading. MQL5 Cloud Network |
| market | Forex | Forex/stock trading market (stocks, bonds, futures, options) |
| economic calendar | none |
Already included |
| Built-in MQL5 chat | none | Already included |
I will discuss some of the differences between MetaTrader 4 and MetaTrader 5 in more detail.
Compare the interfaces of MT4 and MT5.
What is the difference between the interfaces of MT4 and MT5? It is difficult to visually determine the differences between MetaTrader 4 and MetaTrader 5. In the new version of the platform, developers focused on upgrading the platform's functionality and made almost no changes to the interface.
There are some differences in the main menu, but the most commonly used functions remain the same. As in MT4, you can open the Market Watch or Navigator window in MT5. You can also open additional menus containing time frames and chart types.
This is what the MT4 interface looks like with all the main windows and panels open:
This is what the MT5 interface looks like:
If you compare MetaTrader 5 and MetaTrader 4, you will find some subtle differences between them. In MT5, the toolbar icons are larger, and tabs for the Terminal window have been added.
Changes in the main menu in MetaTrader 5 compared to MetaTrader 4:
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In the "File" menu, you can now top up or transfer funds directly within the platform.
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"Market Depth" has been added to the "View" menu.
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The "Insert" menu contains two additional options: "Expert" and "Script." There is built-in software for algorithmic traders. Additionally, you can add custom expert advisors in MetaTrader 5.
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The Chart menu contains more charting tools.
The Terminal window contains the Economic Calendar and the VPS server.
- in conclusion. If you have already learned all the features of MT4, you can become familiar with MetaTrader 5 in just a few hours. Vice versa, if you are proficient in using MT5, you will quickly get used to using MT4.
Comparing MT4 and MT5 time frames
MT5 supports 21 time frames, which is more than double the 9 traditional time frames supported by MT4. As in MT4, the nine major timeframes are located on the toolbar. To call up non-standard time frames, you need to right-click on the chart and select the "Time Frames" tab.
I don't think this innovation makes much sense. If there is a difference between the one-minute time frame and the two-minute time frame for scalp traders, there is no difference between the M12 and M15-minute time frames for day traders. Additionally, you can easily solve the problem of MT4 not having non-standard time frames by installing a script.
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in conclusion. The increased number of time frames is not a big advantage of MT5. It may help some people, but for basic trading, traditional time frames in MT4 are more than enough.
Order Execution Policy
There are three types of order execution policies in MT4:
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Instant execution. When a trader sends a request to the broker to open a position, the platform automatically inserts the current price into the order. If the broker accepts the price, the order will be executed. If the price is not accepted, the order will be returned at the new price; this is called a requote.
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Request execution. The order is executed at the price previously received from the broker. The trader can agree to the quote provided or refuse to execute the order.
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Market Execution. A Forex broker decides to execute an order without agreeing on a price with the trader. If a trader places an order, this means agreeing on the execution price in advance (even if it is different from the terminal price).
The broker selects the order execution type on the account and indicates it in the trading conditions.
There are many more types of order execution policies on MT5 that traders can specify in the order window:
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Fill or kill. The entire order volume is executed at the specified price. For example, a trader wants to buy 1 lot of EUR/USD at a price of 1.22543. But only 0.6 lots were sold at this price on the market; others were sold at higher prices.
In this case, the order will not be executed. This is the only additional order execution policy in MetaTrader 4 and MetaTrader 5.
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Perform now or cancel. Trades will be executed within the existing volume; the remaining volume will be cancelled. In the previous example, 0.6 lots were bought and 0.4 lots were cancelled.
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return. If an order is partially executed, the remaining volume is not cancelled; it remains on the market.
Traders do not pay much attention to the improvements made in MetaTrader. Speed is of the essence in trading, so one-click trading is popular. In the highly liquid ECN market, prices change within milliseconds, and there is always sufficient trading volume in the market at the current price.
In MT5, developers have made the process of sending orders more complex. Therefore, it is difficult to say which one is better, MT4 or MT5, in terms of order execution policies.
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in conclusion. Compare MetaTrader 4 and MetaTrader 5 in terms of order execution policies. The advantage of MetaTrader 5 is the ability to adjust the principles of all or part of the order execution. However, only professional traders (not most traders) use this option.
When it comes to order execution, novice traders are advised to choose MT4; the fewer options, the easier it is for you to understand the basics of the platform.
Hedging/Netting
In MetaTrader 4, you can open any number of orders on the same chart. Every new transaction is a new order. Such a system allows you to hedge your position, opening an opposite position with the same volume in response to a temporary reversal in price.
In MetaTrader 5, the developers wanted to change the commonly used system and adopt the so-called average order calculation system. Traders can open any number of positions on one chart, but use the offset method to aggregate all of these positions into one order. Locking cannot be implemented in this case, and the platform has been criticized for this. Just six years later, in 2016, MetaQuotes launched improvements such that the platform can now support two-order accounting systems.
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Hedging mode allows you to open any number of positions for an asset. You cannot change the volume of an open position; you can only enter more trades. MetaTrader 4 supports hedging systems, and since 2016, MetaTrader 5 also supports hedging systems.
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The netting model allows only one position to be opened on one financial instrument at a time. If you open a position in the same direction, the volumes of both positions are added together. If the direction is reversed, the trading volume of the first position will be reduced by the trading volume of the second position; if the trading volume of the two positions is the same, the netting system will be closed; if the trading volume of the second position is greater, If the price is large, the transaction will move in the opposite direction.
When you open an account, you can set the order accounting mode to hedging or netting. If there is no such option, please contact the broker.
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in conclusion. MetaTrader 4 or MetaTrader 5, which one is better? Both order accounting systems have their own advantages: hedging enables hedging of positions; netting leaves only one order in the chart, and you do not have to track multiple orders at the same time. Therefore, providing two order accounting systems for you to choose from is also one of the advantages of MT5.
Another moment: first-in-first-out (FIFO). If multiple trades are made with the same trading volume and currency pair, traders must close the oldest established position first.
You cannot be first in the market and then last out of the market on a trade. This rule has been implemented in the United States and other countries. So, for these countries, the netting system in MT5 is an advantage.
Recommendation: Open two demo accounts on both systems and compare MT4 and MT5. Please share your thoughts in the comments section below the article!
Compare MT4 and MT5 pending orders.
The order quantities are also different between Mt4 and MT5. MT4 has four types of pending orders: buy stop/sell stop or buy limit/sell limit. MT5 has six types of pending orders.
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A buy-stop-limit order is a combination of a buy-stop order and a buy-limit order. Once the sell price reaches the value set in the "Price" section, the platform will automatically place a "Buy Limit Order" at the price specified in the "Stop Limit" box.
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A sell-stop-limit order is a combination of a sell-stop order and a sell-limit order. Once the bid price reaches the value specified in the "Price" section, the platform will automatically place a "Sell Limit Order" at the price specified in the "Stop Limit" box.
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in conclusion. For professional traders, these pending orders offered by MT5 can be interesting. For novice traders, the pending orders provided by MT4 are enough.
Compare the mobility of MT4 and MT5.
There is no difference between MT4 and MT5. Both platforms have mobile versions for Android and iPhone/iPad. The main functions of the mobile version of MT are the same as those of its desktop version: determining quotes, policies for opening positions and executing orders, etc. You can manage your positions using both the desktop and mobile platforms.
LiteFinance: How to Install the Mobile Version of MT4 or MT5 LiteFinance:
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On the homepage of the LiteFinance website, go to the "Forex Trading" tab and click "Download MT4/Download MT5" in the "Trading Platform" menu.
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Choose the type you want. App Store or Android
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Download and install the application.
In the "Forex Trading/Mobile Apps" section, you can also find more software for mobile devices, examples of trading strategies, Forex analysis, and more. All applications are free for LiteFinance customers.
Analysis comparing MT4 and MT5
MT4 has about 30 built-in indicators and 33 analysis objects. MT5 has 38 built-in indicators and 44 analysis objects to help determine the price trends of financial instruments. MT5 also provides built-in DailyForex signals. It also provides a separate economic calendar tab.
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"Insert/Indicator". The Trends tab has six additional indicators. In addition to the standard moving averages, Bollinger bands, and parabolic SAR, there are also their variants, such as the fractal adaptive moving average, the double exponential moving average, etc.
There are also two new oscillators: the Chaikin Oscillator and the Triple Exponential Moving Average.
2. Insert/Objects". The analysis objects are supplemented by additional objects in a separate "Elliott" tab and other tabs.
If you want to know more about these tools, please leave a message in the comments section.
The increased variety of analytical tools in MT5 is not a significant advantage compared to MT4. The number of custom indicators written for MT4 is several times more—more than a hundred. This is one of the main advantages of MT4.
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in conclusion. You are a novice trader and just started analysing trading platforms, right? Choose MetaTrader 4 or LiteFinance trading terminals; they are simple and easy to use.
If you want to become a professional trader, you can develop your own indicators or add free custom tools. You can add to MetaTrader 4 all the tools that developers have added to MetaTrader 5 yourself.
Comparing algorithmic trading on MT4 and MT5
Algorithmic trading in MT5 has almost no changes compared to MT4. There are some subtle differences here: the Insert menu has two new tabs, Scripts and Experts. There are currently no reviews for them. It is difficult to understand the purpose of these tabs if traders can add their own custom expert advisors and scripts written in MQL5.
The developers made a lot of changes to the strategy tester, which fundamentally improved it. In MT5, the Strategy Tester is a unique tool that can optimise manual and algorithmic trading of any complexity. Its functionality is superior to the MT4 tester, the built-in tester Fx Blue, and the Forex Simulator.
What are the differences between the MetaTrader 4 tester and the MetaTrader 5 tester?
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speed. Testing an Expert Advisor (EA) in MetaTrader 4 takes approximately 30 minutes, while in MetaTrader 5, it takes up to 10 minutes.
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optimization. Optimisation recommends testing all possible parameter combinations to find the best one. In MT4, only one processor core is used for optimisation.
In MT5, developers have implemented the MQL5 Cloud Network model. It can consolidate the power of hundreds of processor cores.
The Test Agents Manager service allows you to use the free processing power of other community members on a paid or free basis. This technology makes expert advisor optimisation hundreds of times faster in MT5.
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Multi-currency pair backtesting. In MT5, you can test expert advisors with multiple currency pairs at the same time. It speeds up backtesting tremendously.
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Test Methods. In MT5, the testing method is not based on strict control points (the results are far from reality).
Added a forward testing method. The test is divided into three parts. Expert advisors that have been optimised for the first two parts are run on the last forward part. If the results are the same, the expert advisor has optimised.
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in conclusion. The backtesting program in MT5 is the best and most useful innovative feature introduced by the developers. In MetaTrader 4, Expert Advisors of Yield often generate losses on real accounts. Or the results of real trading are far different from the backtest results.
In MT5, the accuracy of optimisation is increased several times due to the multi-threaded information flow in the MQL5 Cloud Network model. Therefore, there is a common opinion in traders' forums that it is better to test expert advisors and trading systems in MetaTrader 5, but it is better to trade in MetaTrader 4.
Compare the web version and compatibility of MT4 and MT5.
The web version differs from the desktop version in that it opens in a browser. There is no need to download Metatrader installation files and install the platform. Some people think the web version is convenient, but I think the web terminal is an abridged version of the desktop platform. It is easy to use, as you can open trades with just a few clicks; however, you cannot load expert advisors and indicators onto it.
The developers of MT4 and MT5 have provided several versions of the platform: a desktop version, a web version, and a mobile version for Android and iPhone/iPad. Both the mobile and web versions are fully compatible with desktop platforms. You can close positions opened on your computer at any time on your mobile device or browser.
The web version is not very popular; if someone has a computer at hand, he will prefer to use the full-fledged desktop platform, and if not, he will use the mobile platform. It is recommended that you familiarise yourself with the LiteFinance online terminal built into your personal account, which can replace the web version of the platform. This is the perfect training tool for novice traders, with basic indicators and position-opening features.
Compare copy trading on MT4 and MT5.
The copy-trading modes of both terminals are the same. Therefore, it does not matter which terminal is connected to the social trading platform. There are two ways to conduct copy trading on both platforms:
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Copy trades and signals from the MetaQuotes community. MetaTrader 4 and MetaTrader 5 have the functionality to connect to the copy trading community. You can use this option in the following ways:
Step 1: Get familiar with signals, signal providers, and strategies. You can look for signals in the Terminal window by clicking on the "Signals" tab. I will not focus here on how to choose the right signal provider in MT4. If you want to know more details, please leave a message in the comment area.
Step 2. Subscribe to the signals that interest you. You can copy signals and trades only after registering on MQL5.com (which is the entire website of MetaQuotes).
This copy trading model has two main disadvantages. The first is that all signals are paid for. On the screen, you can see a sample fee of $30–40 per month.
If the signal is invalid, you lose your subscription fee. Secondly, the ranking mechanism for signal providers is not clear.
More precisely, the ranking is determined based on the performance of the trader who provided the signal, rather than the trader’s experience. However, MetaQuotes assumes no responsibility for this, although it may issue warnings regarding the risks of an investment strategy. It’s almost impossible to tell whether the person you’re copying is a real trader or a robot wasting your money.
However, there is another, more effective method you can use to copy successful traders:
2. Use the broker’s social trading system for copy trading.
This mode has several advantages:
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A subscription is free.
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Trader rankings are transparent. Signal provider ratings are determined by broker clients. The reputation of the broker guarantees the reliability of this ranking.
You can use any terminal to connect to the LiteFinance copy trading service. You attach your account to the trader's account and can monitor the performance of copy trading in the МТ4/МТ5 client or in the LiteFinance client profile. You can find out about trader rankings here. Learn how the copy trading service works here.
in conclusion. Neither MT4 nor MT5 is suitable for copy trading. The fees are high, there are many bots, the ratings are determined based on unclear principles, and the signal providers are not accountable to investors. Therefore, it is better to use the social trading platform provided by the broker; therefore, it does not matter which platform you trade on.
high speed. The speed of copying a signal provider through a broker depends on the broker server. Therefore, copying here is faster than when copying trades in MQL5 via MT.
MQL4 vs. MQL5
MQL4 (MetaQuotes Language 4) is the built-in programming language of the trading platform. You can use MQL4 to write codes for expert advisors, indicators, scripts, and MT4 function libraries. MQL4 is based on C++, another common programming language.
The language is very flexible, so you can develop simple structures as well as complex programmes capable of performing a variety of operations and controlling individual parameters. MQL4 contains a large number of functions necessary to analyse current and historical quotes and has built-in functions for managing and controlling trading orders.
MQL5 is an upgraded version of MQL4 and can be used on the MetaTrader 5 platform. You can learn more about the differences between MQL4 and MQL5 in the article Metaquotes Language: MQL4 vs. MQL5: Differences and Programming Tutorials.
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in conclusion. There is no consensus among traders regarding the MetaTrader programming language. Some people think that they are very similar; you just need to study the additional features of the library and improve the code. However, some argue that these two languages are different and you need to study each programming language in detail.
There are even indicators written in MQL4 that run in MT5 without changing the code. If you are a novice trader or you don't want to study the code structure, use MT4. There are hundreds of free tools written in MQL4, and more programmers know this language than know MQL5.
MT4 vs. MT5 FAQ
MT4 vs. MT5 Summary: Which Platform to Choose?
MetaTrader 4 vs. MetaTrader 5—which platform should you choose? The developers initially believed that MT5, a more advanced version, would replace MT4. But MT5 also has a lot of bugs, and the developers haven’t fixed them yet.
The upgrades achieved by MT5 are not enough to motivate traders to convert indicators and expert advisors written in MQL4 to those written in MQL5. The advantages offered by MT5 are not enough to convince traders to switch from their usual terminal. Therefore, MT4 remains the best platform in its field.
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MT4 is the best forex trading platform, with hundreds of indicators, scripts, and expert advisors. If you are a forex trader, choose MetaTrader 4.
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MT5 is a professional platform suitable for trading futures and testing algorithmic trading.
If you are a novice trader and have difficulty understanding the features of MT4 and MT5, then you can try the simpler and more straightforward LiteFinance terminal, which has a simple and intuitive interface. You don't need to register to start trading with a demo account.
If you have any other questions or want to share your thoughts on MT4 and MT5, please join the discussion in the comment section.
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Ask me questions and leave comments below. I will be more than happy to answer your questions and give the necessary explanations.
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