With the increasing adaptability of technological advancements in forex trading, multiple platforms have emerged in recent years. MT4 and MT5 are two trading platforms that allow traders to get the advantage of automated trading approaches along with several advanced instruments.
But as much as it is important to identify the best MT5 brokers or MT4 brokers in the market, to leverage your trading outcomes noting the differences of these platforms is also equally critical.
Understanding MT4 and MT5 platform
Although MetaTrader 4/5 facilitates traders to execute a trade, they do not act as a broker to be precise. These two third-party platforms are rather used to forward trading orders to brokers instantaneously.
After downloading the interface to your machine, you can easily connect the platform to your broker in order to analyze the market, conduct research and most importantly execute a trade. The popularity of these platforms owes majorly to the abundance of advanced tools they have to offer. Due to the wide range of instruments, many veteran traders prefer these third-party platforms over the ones provided by the broker.
While there are many similarities between these two major trading platforms, addressing the key differences is also crucial to determine which one will be the right platform for you.
1. Tradable assets
It is crucial to understand that neither MT4 nor MT5 can define which securities you have exposure to when it comes to trading assets; instead, the brokerage with which you link MT4/5 determines this. For instance, a trader can only use the specific pairs of currency that are offered by their chosen MT4 broker. If a broker markets on USD/GBP and EUR/TRY, their clients will be able to open a position using these pairs through the MT4 platform. MT5 brokers also work in the same manner that lets traders trade specific assets that are offered by the broker itself.
The basic difference in terms of tradable instruments is that the MT4 platform is mostly preferred by forex traders. Individuals interested in non-forex CFDs like stocks, expensive metals, and more, on the other hand, are inclined towards MetaTrader 5 platform.
2. Tools and features
Evaluating which features or tools might get along with your financial objective is crucial to understand which platform will be best for you.
- Technical indicators: As a professional technical investor, it is necessary to check which indicators are featured in these platforms. MT4 allows traders to access more than thirty pre-installed indicators for technical analysis along with over a thousand custom indicators. MT5, on the other side, provides a couple of more pre-installed technical indicators than the MT4 platform, as well as a dedicated market to buy personalized indicators suitable for specific requirements.
- Charting tools: In terms of charting tools, both of these platforms have multiple advanced features that enable traders to get a better experience in analyzing charts. Where MT4 features about 20 analytical objects, traders can access more than 40 objects with MT5.
Apart from these two aspects, other trading instruments like alert systems, research tools, and demo trading facilities are quite similar in both of these platforms.
3. Algorithmic trading
The ability to use an automatic bot or FX EA on a third-party trading platform like MT4 or MT5 is among the most enticing features. To put it another way, your preferred bot will operate on your behalf 24 hours per day, without usual human intervention. As the large percentage of third-party bot providers will create software specifically for MT4, it is the finest alternative available, if you want to use a third-party platform primarily for algorithmic trading, MT4. Both of these platforms do, however, have a centralized market that is controlled by MQL5.
4. Programming Language
The basic difference in this aspect is that MQL4 is used to develop the MT4 platform, whereas MQL5 is used in MT5. The primary distinction is that MQL5 allows for ‘black box’ coding that offers an excellent foundation for developing and deploying trading bots and FX EAs.
In conclusion, both MT4 and MT5 platforms are excellent for extensive technical research and the deployment of customized trading methods. MT4 is unquestionably the best alternative when it comes to professional forex trading, but if you are more into investing in non-forex CFDs – MT5 will be a better choice for you.