Key Differences Between MT4 & MT5

MT4 and MT5 are third-party trading platforms which are considered to be the most popular trading platforms in the world, with around 80% of brokers using them.

Both platforms were created by the multi-asset trading company MetaQuotes. MetaTrader 4 and MetaTrader 5, shortened to MT4 and MT5, are both free to use (with paid features), and are currently the dominant trading tools used in the FX industry.

MetaQuotes created three versions of MetaTrader from 2000, but it wasn’t until MT4 in 2005 that the platform saw significant enhancements and gained in popularity.

MT5 was released a few years later with upgraded tools, however, lots of traders still use MT4. So which is better? We compare both tools, and analyse which tool is better for traders and brokers.

MT4 overview

MT4 was released in 2005, and is an electronic trading platform that is designed for FX trading. The software is licenced to FX brokers who can then provide the software to their clients.

(Source: MetaTrader4)

With MT4, traders can look at the market and pending orders, as well as create instant execution, stop orders, trailing stops, tick charts, and see their trading history.

Users of MT4 have access to:

• 30 built-in indicators
• 33 analytical objects
• 2 market orders
• 4 pending orders
• 2 stop orders and a trailing stop

MT4 was designed with FX traders in mind, and for those who still only trade FX, it’s still an ideal platform.

MT5 overview 

A direct improvement of MT4, MT5 was released in 2010, with everything upgraded. MT5 supports a wide range of financial instruments including FX, stocks, commodities, indices, and crypto. 

• 38 built-in technical indicators 
• 44 built-in analytic objects
• Economic calendar
• 2 market orders
• 6 pending orders
• 2 stop orders and a trailing stop

MT5 is a much more versatile version of MT4 which allows you to trade different securities across multiple markets. If you are looking to trade anything more than FX, then MT5 is likely the best choice for you.

Which is better, MT4 or MT5?

Currently, the market is leaning toward MT5, with MT5 dominating the market since 2021 and increasing since.

(Source: https://www.metaquotes.net/en/company/news/5304)

The improved software of MT5 is likely the choice for most entering the market, and also anyone looking to trade anything beyond FX.

However, it should be noted that MT4 is only available for FX trading, whereas MT5 can offer many other securities, and by default will be able to attract more of the market. MT4 still remains ubiquitous with FX brokers.

There are also still some advantages of MT4 that lots of traders can appreciate, as well as many other alternatives to the MetaQuotes platforms.

Advantages of MT4

Despite the clear upgrades of MT5, many traders still prefer to use MT4. Part of this is likely familiarity and the fact that your brokers may only support MT4.

One of the main reasons that people might support MT4 over MT5 is that MT4 is a lot simpler. For traders exclusively trading currencies, the simpler platform might be all that they need, particularly if they are a beginner.

MT4 also has a much simpler programming language (MQL4), which for newer traders and developers looking to implement the software into their business, could be a much easier option.

A significant advantage of MT4 is also its increased accessibility with Expert Advisors (EA) – algo packages or programs that can be used to auto trade. There is also a marketplace for MT5 EAs, but these are not as popular.

Advantages of MT5

MT5 is a far more advanced, comprehensive platform that has expanded its trading capabilities in many ways. MT5 is needed if you trade a variety of assets, not just forex. Although both are similar for manual trading, if you are trading stocks, commodities or cryptocurrencies, then you will need MT5 by default. 

As a more advanced trading company, you may also need to use more advanced features such as charting tools and analysis features that MT4 doesn’t have. MT5 also has more advanced graphics for developing indicators. MT5 will be slightly harder for beginners.

Additional benefits of MT5 include:

• Cost consideration during backtesting
• Cloud-based optimisation, allowing trading robots to run on hundreds of computers
• Internally handling orders 
• Upgraded file protection
• Code-performance detection 

One final thing to note is that MT5 has technical support, but MT4 does not. Therefore, if you have a potential issue with your flow, then it may be worth having MT5 in place for security reasons.

Alternatives to MT4 & MT5

For many traders, MT4 and MT5 are their choices because this is what most brokers also use. The success of MT4 was mainly due to the stability and functionality of the platform, as well as the ability to code custom trading applications in the native MQL4 language. MT4 and subsequently MT5 have quickly become the go-to option for new brokers, as this is the de facto industry standard. Often businesses are started with imitation of existing businesses, and using MetaQuotes’ software is a clear, reliable option.

Brokers will often only provide MT4 or MT5, so for this reason, retail traders will often use it too. 

MT4 and MT5 dominate the trading space, but there are some high-quality alternatives to MT4 and MT5 that are available, as well as some white-label alternatives. 

Some of the best alternatives to MT4 and MT5 include:

• cTrader
• TraderEvolution
• Devexperts
• Netdania
• Match-Trade Technologies
• Fortex
• FDCTech
• Unity
• Trading View

If you’re looking to sell your brokerage, then it could be worth developing your own technology, rather than simply renting MT4 or MT5. This can make your brokerage a lot more attractive to a potential buyer.

Another consideration for an alternative to MT4 and MT5 is that there is a lack of trust for both platforms. There are tools that can be installed in the back end which allow brokers to manipulate prices. However, this can sometimes be used legitimately as a response to what a broker may perceive to be toxic flow. other, less ethical brokers, can manipulate prices and execution in their favour, and not in the favour of their clients when the broker is taking the other side of the trade (B-booking the flow, and benefiting from the client's loss making position). 

MT4 & MT5 in the future

Daniel Skowronski, Chief Revenue Officer at Admirals said in an interview last year that they “wanted to come out with something that’s a bit more user-friendly for our customers. There’s a whole new generation of traders coming into the market and we wanted to give them a much simpler interface, something that’s easy for them to trade and understand.” This shift isn’t unique – many are starting to consider alternatives to the platforms.

Following the earlier point about MT4 and MT5 being the choice of many (simply due to its widespread use), the newer generation of traders is increasingly open to the idea of other platforms, and MetaQuotes’ status as the default platform is in decline. 

One trigger for this has been frustrations raised with MetaQuotes about user access to the products becoming harder, but also a lack of clarity on policies. Other questions have also been raised about MetaQuotes’ inconsistency – some brokers are approved immediately, others have experienced long delays. 

However, despite this, a large part of the market still uses MT4 and MT5 and will continue to in future. Although the dominance of the platforms is in decline, which is opening up traders to more options and flexibility, the benefits of MT4 and MT5 are still clear to see.

Conclusion

MT4 and MT5 are the most common platforms in the FX space, and likely your broker will offer the platform, meaning that you will be able to easily fit into their processes.

For those newer to the FX space, and only looking to trade FX, MT4 may be the best option for you. However, if you are looking to trade stocks, bonds, commodities or crypto, then you will need to upgrade to MT5. 

As stated earlier, there are also plenty of high-quality alternatives to MT4 and MT5, as well as some white-label alternatives. 

If you require any further assistance with your choice of trading platform, or liquidity, please get in touch with LiqudityFinder today.

Author

Caleb is a financial copywriter with a specialisation in fintech and forex. Former copywriter at Barclays and Paysafe. Contributing writer for LiquidityFinder. You can message Caleb here.