Which is better MetaTrader 4 or 5 | MT4 vs MT5 - LiteFinance (2024)

MetaQuotes Software Corp. developed the first trading platforms to trade Forex, CFDs, stocks, and futures in 2000 and 2001. They had relatively few capacities of the trader terminal and didn’t become popular among traders. In early 2002, the company presented MetaTrader 3, where the programming language and functions’ capabilities were significantly expanded. This trading platform existed for three years.

In 2005, software development company MetaQuotes developed the MetaTrader 4 that has been the most popular trading platform since then due to its multifunctionality and ease of use.

You can learn more about the MT4 functions in the article What Is MetaTrader? Learn How to Use This Online Platform in Trading

An upgraded version of the trading platform, MT5, appeared in 2010. However, the MT5 hasn’t become more popular than the MT4. Read on, and you will learn about the advantages of MetaTrader 4 and what is special about the MetaTrader 5 platform.

MetaTrader 4

The MT4 was initially designed for forex retail trading. The MetaTrader 4 is so popular because it is multi-functional, user-friendly, and mobile. The platform has an intuitive interface; it is not overloaded with ample information, panels, and buttons. Some functions are duplicated in the menu on the toolbar and the menu called by the right mouse button.

The main features of MT4:

• The platform is designed for Forex trading. You can trade currencies as well as CFDs on indexes, shares, bonds, commodities, and cryptocurrencies.
• MetaTrader 4 is a mono-threaded platform for 32-bit operating systems. It will work on 64-bit operating systems as well, but there may be compatibility problems.
• The MT4 platform supports more than 30 languages.

Another reason for MetaTrader 4 popularity is the marketing and technical support from its developer, MetaQuotes. The software developers team is continuously working on the upgrading and improvement of platform code. The license is affordable for brokers, so the MetaTrader products are more popular than other platforms.

If you want to test the MT4 functions on a demo account, you can download a desktop or mobile version via this link. Then run the installation file - the platform will be installed within 5 minutes. In the "File" menu, select "Open a new account" and follow the prompts. On a demo account, you can test the functionality of placing market and pending orders, get acquainted with technical indicators and charting objects, and try to enter your first trades.

Pros

The main advantages of the MT4 compared to other platforms are:

• It is multifunctional. The platform has three modes of order execution; nine types of orders, including a trailing stop; thirty built-in technical indicators, nine timeframes.
• You can program in MQL4. The platform allows adding custom tools – scripts, Expert Advisors, and indicators. You can also create your own trading tools in the MetaEditor.
• It has a tester. You can test manual and automated trading strategies on the historical data, evaluate the performance of a trading system, and record the backtesting results to analyze statistics. No other trading platform, except for TM5, has such functions.
• It provides support from the trader community. MQL5.com is one of the biggest trader communities, where you can copy signals, discuss trades, order original indicators, EAs or trading robots, scripts to be developed. The MQL4 programming language is one of the most popular and convenient to develop original trading systems, which is another advantage of the MT4.
• It is safe. In MT4, the exchange of information between the trader, the terminal, and the platform servers is encrypted with 128-bit keys, based on the special algorithm using a digital signature. Even if a Trojan virus enters a computer, the platform is protected from hacking.

And one more benefit is that the trading platformis free for traders.

MetaTrader 5

MT5 is a revised, state-of-the-art multi-asset platform. The MetaTrader 5 was first released in June 2010. The developers thought MT5 would entirely replace the MT4, just like MT4 had replaced all the previous versions.

At some point, the MetaQuotes even decided to abandon the MT4 support and stop selling licenses to promote the new terminal modification. But ‘something went wrong.’ MT5 didn’t become as successful as the MT4 despite the updates and upgrades, so MetaQuotes decided to use both versions.

MetaTrader 4 is still the most popular Forex trading platform. However, if you want to get familiar with the MT5, you can download its desktop or mobile version via this link.

Next, I will cover what's the difference between MetaTrader 4 and MetaTrader 5. I will offer some tips on which is better, MetaTrader 4 or 5, for a beginner.

Benefits

MetaTrader 5 (MT5) is a state of the art multi-asset class trading platform. In MetaTrader 5, the developers tried to upgrade the technical analysis options, tester, and order execution options. Some functions are more convenient than in the previous version.

The benefits of MT5 vs MT4:

1. Depth of Market (DOM) data. In MetaTrader 4, the DOM is hardly useful and is rarely employed. In MetaTrader 5, the DOM is a real trading tool. Developers added volumes that are clear in trading stocks.
2. In MT5, the Depth of Market displays the corresponding information about buyers’ and sellers’ nearest orders with a step of a price change and real volume of orders at specified quotes.
3. Order accounting system. Developers added a netting system to Metatrader 5. The chart displays only one order, which is the average value of all open positions for one asset. This is convenient because you don't need to track many transactions.
4. Tester. The multi-currency function has been added to the MT5 tester, the backtesting statistics have been expanded. The results of tests and optimization of an EA or indicator in MT5 have become more accurate due to the introduction of forward testing. What was tested in MetaTrader 4 for 20 minutes, with the same parameters, in MetaTrader 5 is tested for 5 minutes.
5. Time frames. MetaTrader 5 includes a few non-standard time frames. In MetaTrader 4, you have to install an additional script to analyze non-standard timeframes.
6. Technical analysis. The MT5 includes more built-in technical indicators. You need to add some of them to MT4 manually. There are also two extra pending orders, Buy Stop Limit and Sell Stop Limit.

Comparing MetaTrader 4 and MetaTrader 5

Let us compare MetaTrader 4 to MetaTrader 5: which is better? MT5 is an upgraded new version of MT4, which is designed for 64-bit operating systems. MetaTrader 5 is a multimarket platform.

It is faster, more flexible, and functional. Operations, which take a few minutes to process on MT4, will take a few seconds on MT5. The MT5 platform is a multi-threaded platform.

For example, you can run the optimization process with the number of threads corresponding to the number of cores. The number of pending orders is increased; the policy of order execution is also changed. All these upgrades aim to speed up internal data transfer processes and offer traders new multi-level tools for building complex trading systems.

The MetaTrader 5 is a multi-asset trading platform designed to trade Forex and non-Forex assets. The MT5 functionality with the upgraded depth of market functions allows you to make money trading futures, options, and other derivatives. You can also enter Forex trades simultaneously.

Comparison of MetaTrader 4 and MetaTrader 5:

I will deal in more detail with some of these differences between MetaTrader 4 and MetaTrader 5.

Interface MT4 to MT5

How do the interfaces of MT4 and MT5 differ? It is difficult to define the difference between MetaTrader4 vs MetaTrader5 visually. In the new platform version, the developers focused on the upgrading of the platform functions, hardly changing the interface.

There are some differences in the main menu, but the most frequently used functions remained the same. Like in MT4, you can open “Market watch” or ‘Navigator’ windows in MT5. You can also switch on an additional menu with timeframes and types of chart displays.

That is how the MT4 interface looks when all the main windows and panels are opened:

That is how the MetaTrader 5 interface looks:

There are minor changes if you compare MetaTrader 5 vs 4. In MT5, toolbar icons are larger, there are also added tabs of the “Terminal” window.

Changes to the main menu in MetaTrader 5 compared to MetaTrader 4:

• In the “File’ menu, you can now top up or transfer money directly in the platform.
• The Depth of Market is added to the View menu.
• The “Insert” menu includes two extra options, “Experts” and “Scripts”. There is built-in software for Algorithmic traders. Also, you can add your custom EAs in MetaTrader 5.
• The “Chart’ menu includes more charting tools.

The “Terminal” window includes “Economic calendar” and the VPS server.

• Conclusion. If you have studied all the functions of the MT4, it will take a couple of hours to familiarize yourself with the MetaTrader 5. And vice versa, if you are a proficient user of MT5, you will quickly get used to MT4.

Different Timeframes

The MT5 supports 21 timeframes, which is more than twice as many as 9 traditional timeframes supported by MT4. The 9 major timeframes, like in MT4, are on the toolbar. To call a non-standard timeframe, you need to right-click on the chart and select the “Timeframe” tab.

I don’t think this innovation makes sense. If there is a difference between one-minute and two-minute timeframes for a scalper, for a day trader, there is no difference between the timeframes of M12 and M15 minutes. Besides, you can solve the problem of non-standard timeframes easily in MT4 by installing a script.

• Conclusion. The increased number of timeframes is not a great advantage of the MT5. It could be useful for someone, but the traditional timeframes available in MT4 are enough to try the basics of trading.

Order execution policy

There are three types of order execution in MT4:

• Instant execution. When a trader sends a request to a broker to open an order, the platform automatically inserts the current price into the order. If the broker accepts the price, the order is executed. If the price is not accepted, the order is returned with a new price; this is called a requote.
• Request execution. The order is executed at a price previously received from the broker. The trader can agree to the offered price or reject the order.
• Market execution. The forex broker decides to execute an order without agreeing on the price with the trader. If a trader places an order, this implies the early agreement with the execution price, even if it differs from the terminal price.

The broker chooses the type of order execution on the account and indicates it in the trading conditions.

In MT5, there are some more types of order execution, which a trader can specify in the order window:

• Fill or Kill. The order can be executed at the indicated price only in full position volume. For example, a trader wants to buy 1 lot of EURUSD at a price of 1.22543. But there are only 0.6 lots sold at this price in the market; other sell offers have a higher price.
• In this case, the order is not executed. This is the only additional type of order execution available in MetaTrader 4 and MetaTrader 5.
• Immediate or Cancel. The transaction will be performed within the existing volume; the remaining volume will be canceled. From the previous example, a volume of 0.6 lots is bought, 0.4 lots are canceled.
• Return. If the order is executed partially, the remaining volume is not canceled; it remains in the market.

Traders didn’t pay much attention to the improvements introduced in MetaTrader. Speed is crucial in trading, so One-Click trading is popular. In ECN markets with high liquidity, the price changes in a few milliseconds, and there is always sufficient volume in the market at the current price.

In MT5, the developers made the process of sending orders more complicated. Therefore, it is difficult to say what is better MT4 or MT5, in relation to the order execution policy.

• Conclusion. MetaTrader 4 vs MetaTrader 5, in terms of order execution policy. The MetaTrader 5 advantage is the ability to adjust the principle of full or partial order execution. However, only professionals use this option, which are not the majority.

  In terms of order execution, I recommend beginners choose the MT4 – the fewer options, the easier you will understand the platform’s basics.

Hedging/Netting

In MetaTrader 4, you can open as many orders as you want on the same chart. Each new trade is a new order. Such a system allows you to employ locking, open an opposite position with the same volume for a temporary price reversal to pass.

In MetaTrader 5, the developers wanted to change the common system employing the so-called average order accounting system. A trader could open any number of positions on one chart, but all of them were summed up into one order using the offset method. Locking was impossible in this situation, which was the reason to criticize the platform. Only six years later, in 2016, MetaQuotes introduced the changes so that the platform now supports two order accounting systems.

• The Hedging mode allows you to open any number of positions for one asset. You can’t change the volume of the opened position, you can only enter more trades. The hedging system is supported by MetaTrader 4, and, since 2016, by MetaTrader 5.
• The Netting mode allows you to have only one open position of a financial instrument at a time. If you open a position in the same direction, both positions are summed up. If the directions are opposite, the first trade decreases by the volume of the second one; it closes completely if both trades are of the same volume; the trade turns in the opposite direction if the second position is of a greater volume.

You set the order accounting mode, hedging or netting, when you open an account. If there is no such option, contact the broker.

• Conclusion. Which is better, MetaTrader 4 or 5? Both order accounting systems have their pros: hedging allows locking; netting leaves only one order in the chart, you don’t have to track multiple orders simultaneously. So, the opportunity to choose is the benefit of the MT5.

Another moment: The FIFO rule or First In First Out. The trader has to close the oldest opened positions first if dealing in multiple trades of the same size and currency pair.

You can’t enter the trade the first and exit the last. This rule operates in the USA, for example. So, for such countries, the netting system in the MT5 is an advantage.

Advice: Open two demo accounts with both systems and compare MT4 and MT5. Share your opinion in the comments under the article!

Pending Orders - MT4 to MT5

The number of orders in Mt4 and MT5 is also different. MT4 has four types of pending orders Buy/Sell Stop or Buy/Sell Limit. MT5 has six types of pending orders.

• Buy Stop Limit is a combination of Buy Stop or Buy Limit. Once the Ask price reaches the value set in the Price section, the platform automatically places a Buy Limit order at the level specified in the Stop Limit Price box.

• Sell Stop Limit is a combination of Sell Stop and Sell Limit. Once the Bid price reaches the value specified in the Price section, there is automatically placed a Sell Limit at the level set in the Stop Limit Price.

• Conclusion. These MT5 options are interesting for professional traders. The pending orders provided by the MT4 are enough for beginner traders.

Mobility of MT4 to MT5

There is no difference between MT4 and MT5. Both platforms have mobile versions for Android and iPhone/iPad. The mobile MT versions fully repeat the main functions of a desktop version: quotes identity, the policy of opening and execution of orders, and so on. You can manage the opened position using both desktop and mobile versions simultaneously.

LiteFinance: How to install mobile version MT4/MT5 LiteFinance:

• On the main page of the LiteFinance website, enter the Trade Forex tab and click on the Download MT4/Download MT5 in the Trading Platforms menu.

• Choose the needed variant: AppStore or Android

• Download and install the app.

In the section “Trade Forex/Mobile Apps”, you can also find more software for mobile gadgets, examples of trading strategies, Forex analytics, and so on. All apps are free for LiteFinance clients.

Analytics - MT4 to MT5

MT4 has about 30 in-built indicators and 33 analytical objects. MT5 has 38 in-built indicators and 44 analytical objects that help identify financial instrument price trends. The MT5 also provides built-in DailyForex signals. It also offers a separate economic calendar tab.

• “Insert/Indicators”. The “Trend” tab has six additional indicators. Apart from standard Moving Averages, Bollinger Bands, and Parabolic SAR, there are their modifications, such as Fractal Adaptive Moving Average, Double Exponential Moving Average, and so on.

There are also two new oscillators: The Chaikin Oscillator and Triple Exponential Moving Average.

• “Insert/Objects”. Analytical objects have been replenished with a separate Elliott tab and additional objects in other tabs.

If you want me to dwell upon these tools in more detail, write in the comments.

The increased variety of analytical tools in MT5 is not a significant advantage in comparison with MT4. There are several times more custom indicators written for MT4, more than a hundred. This is one of the main benefits of MT4.

• Conclusion. You are a newbie in trading and only started to analyze trading platforms, aren’t you? Choose MetaTrader 4 or LiteFinance trading terminal; they are simple and straightforward.

If you want to become an advanced trader, you can develop your own indicators or add free custom tools. Everything added to MetaTrader 5 by the developers, you can add yourself to MetaTrader 4.

Algorithmic trading in MT4 to MT5

Algorithmic trading in MT5 has hardly changed compared to MT4. There are some minor differences: the “Insert” menu has two new tabs with scripts and Experts. There are no comments about them yet. It is difficult to understand what is the point of these tabs if a trader can add his own custom EAs and scripts written in MQL5.

The developers have made significant changes to the strategy tester, which has been radically improved. In MT5, the strategy tester is a unique tool to optimize the manual and algorithmic trading of any complexity. Its functionality outperforms the MT4 tester and the built-in testers Fx Blue and Forex Simulator.

What is the difference between the MetaTrader 4 tester and the MetaTrader 5 tester?

• Speed. Testing of an Expert Advisor, which takes about 30 in the MetaTrader 4, takes up to 10 minutes.
• Optimization. Optimization suggests testing all possible combinations of parameters to find the best combination. In MT4, only one processor core is used for optimization.
• In MT5, developers have implemented the MQL5 Cloud Network model. It can be used to combine 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 has increased the optimization speed of the Expert Advisor in MT5 by hundreds of times.
• Multi-currency pair backtesting. In MT5, you can test an Expert on multiple currency pairs simultaneously. It speeds up back testing procedures immeasurably.
• Testing methods. In MT5, the testing method is not based on tough control points, whose results are far from reality.
• There is a forwarding testing method added. The testing section is divided into three parts. The EA, optimized for the first two sections, is run over the last forward section. If the results are identical, the EA is optimized.

• Conclusion. Backtesting procedures in MT5 are the best and the most useful innovation introduced by the developers. In MetaTrader 4, an Expert featuring growing equity on a real account often yields losses. Or the results in real trading are far from the back testing output.

In MT5, because of the multi-thread information procedure in the MQL5 Cloud Network model, the optimization is several times more accurate. So, there is a common opinion on trader forums that it is better to test Experts and trading systems in MetaTrader 5, but it is more favorable to enter trades in MetaTrader 4.

WEB 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 file and install the platform. Someone sees convenience in the Webtrader, but I consider the Web terminal a truncated version of the desktop platform. It is convenient because it allows you to open deals with a few clicks, but, for example, you cannot load advisors and indicators into it.

The developers of MT4 and MT5 have provided several versions of the platforms: desktop, Web-version, mobile versions for Android and iPhone / iPad. Both mobile and web versions are fully compatible with the desktop platform. A position opened on a computer can be closed from a mobile device or browser at any moment.

The web version is not very popular: if a person has a computer at hand, he will prefer a full-fledged desktop platform, if not, a mobile one. As an alternative to the browser platform, I recommend that you familiarize yourself with the LiteFinance online terminal built into your Personal Account. This is the perfect beginner trainer with basic indicators and order opening functionality.

Copy Trading in MT4 vs MT5

The copy-trading model is the same in both terminals. So, it doesn't matter which terminal is connected to the social trading platform. There are two ways to copy trades on both platforms:

1. Copying trades and signals in the MetaQuotes community. The function of connecting to the copy trading community is available in MetaTrader 4 and MetaTrader 5. You can use the option in the following way:

Step 1. Get familiar with the signals, their providers, and strategies. You can find signals in the “Terminal” window by clicking on the “Signals” tab. I won’t here focus on how to choose the right signals provider in MT4. If you need a detailed overview, write in the comments.

Step 2. Subscribe to the signals you are interested in. You can copy signals and trades only after you register on MQL5.com, which is the entire website of MetaQuotes.

This copy trading model has two major drawbacks. The first is that all signals are paid. On the screen, you can see examples of fees: $30-$40 per month.

If the signals are ineffective, you will lose money on your subscription anyway. Second, it is not clear how the ranking of signal providers is formed.

More precisely, it is formed according to the performance of the trader providing signals. The ranking doesn’t indicate the trader’s possible experience. However, MetaQuotes is not responsible for it, although it could send a risk warning concerning an investment strategy. It is hardly possible to find out if it is a real trader or a bot wasting your money.

However, there is another more beneficial way to start copying successful trades:

2. Copying trades using the broker's social trading system.This model has several advantages:

• Subscription is free.

• The traders’ ranking is transparent. The rating of signal providers is formed from the broker clients. And the broker is responsible for its reliability with its reputation.

• Speed. Copying trades of signal providers with a broker depends on the broker servers. Therefore, the copying speed is higher here than when working through MT with MQL5.

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 in the МТ4/МТ5 client terminal, or in the LiteFinance Client Profile. You can explore the trader rankinghere. You can learn how the copy-trading service workshere.

Conclusion. Neither MT4 nor MT5 is useful for copying trades. It is expensive, there are many bots, the rating is formed according to unclear principles, the signal providers are not responsible to the investor. So, a better option to employ the social trading platform provided by your broker; this way, the platform you trade on, does not matter.

MQL4 vs MQL5

MQL4 (MetaQuotes Language 4) is a programming language built into the trading platform. You can use the MQL4 to write the code for Expert Advisors, indicators, scripts, and MT4 function libraries. The MQL4 is based on another common programming language C ++.

The language is flexible, so you can develop simple constructions and complex-task programs able to perform multiple calculations and control individual parameters. MQL4 functionality includes tools for analyzing current and previous quotes; it has built-in capabilities for managing and controlling trading orders.

MQL5 is an upgraded analog of MQL4 to use in the MetaTrader 5 platform. You can read more about the difference between MQL4 and MQL5 in the overview.

• Conclusion. There is no consensus among traders regarding MetaTrader programming languages. Someone says that they are very similar and that you only need to study the libraries’ added functionality and refine the code. Someone, on the contrary, believes that languages are different and you need to study each programming language in detail.

There are even indicators written in MQL4 and run in MT5 without changing the code. If you are a beginner trader or you do not want to explore the code structure, use MT4 - there are hundreds of free tools in MQL4, and more programmers know this language than the MQL5 language.

MT4 vs MT5 Summary: which platform to choose?

MetaTrader 4 or MetaTrader 5 — which one should you choose? The developers initially assumed that the MT5, as a more advanced version, would replace the MT4. But MT5 has just as many bugs, and the developers have not yet fixed them.

The upgrades offered in MT5 were not sufficient to encourage traders to translate indicators and Experts written in MQL4 into MQL5. The advantages of MT5 are not enough to convince traders to change their usual terminal. Therefore, MT4 is still the best platform in its segment.

• MT4 is the best platform to trade forex, there are hundreds of indicators, scripts, and Expert Advisors. If you are a forex trader, choose MetaTrader 4.

• MT5 is a professional trading platform to trade futures and test algorithmic trading.

If you are a newbie and it is difficult to understand the MT4 and MT5 functions, you can try yourself in a more straightforward LiteFinance terminal, it has a simple, intuitive interface. You can start trading on a demo account without registration.

If you still have any questions or you want to share your opinions about MT4 and MT5, I invite you to join the discussion in the comments.

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Ask me questions and comment below. I'll be glad to answer your questions and give necessary explanations.

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• Telegram chat for traders: https://t.me/litefinancebrokerchat. We are sharing the signals and trading experience.
• Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders https://t.me/litefinance

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.