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General MT4 vs MT5: The differences between trading platforms

Ruben JR

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MT4 vs MT5: The differences between trading platforms mt5-vs-mt4

MT5 and MT4 trading platforms have quite a lot of things in common, but they are different at the same time. So let’s compare MT4 vs MT5 now.

MetaQuotes Software Corporation is a Russian company and is the owner of MT4 and MT5 trading software. The software has many differences in terms of the functionalities and features. Below is a detailed explanation of the differences.

Execution Modes
MT4 and MT5 have different execution modes. The MT4 has three execution modes whereas the MT5 has four execution modes from the client’s terminal. The following are the execution modes offered: market, instant, request, and exchange execution.

64 Bit Version
The operating system that is supported by these two different forex trading platforms is not the same. MT5 being the latest version of the software runs well on 64-bit operating systems whereas the MT4 is ideal for a 32-bit operating system.

Orders database size
The database that would host MT4 platform was only restricted to accept 10 million trades. This looked a relatively smaller figure by then. However, as the popularity of forex trading has grown overtime there was the need to develop a platform that would allow more trades. With MT5 the numbers of positions are unlimited.

Reports
Reports that you can pull from MT4 software are only in HTML format. With MT5 the reports are both in HTML format and Open XML table format.

Order Fill Policy
MT5 allows for partial orders, if for instance the maximum volume of a trade is met and the trade is not filled, traders can select partial edit to allow for the remaining volume to be canceled.

Pending Order Types
Pending orders allow for a trade to be executed in the future time whenever a preset condition is met. MT4 allows for 4 types of pending orders whereas the MT5 has 6 pending option types; buy limit, buy stop, sell limit, sell stop, “buy stop limit” and “sell stop limit”. MT4 doesn’t have “buy stop limit” and “sell stop limit”. The images below show the different pending order types.

Depth of Market
The depth of the markets gives a picture of the best prices which are a representative of the market prices. This allows traders to also execute trades at best prices. This functionality isn’t there in MT4.

Time and Sales / Exchange data
Time and sales data provides traders with an outlook of the price levels. An increase in bullish positions will be seen same as bearish. This change in volumes helps intraday as well as long-term traders with speculation of price movement. Time and sales data is not only visual but can also be exported to spreadsheets such as MS Excel.

Technical Indicators
Technical indicators are used to detect price patterns based on Dow’s theory. Use of Dow’s theory has seen traders come up with models that are used in price prediction using patterns, lines, and mathematical calculation that are assumed that they will repeat themselves over time. MT4 has 30 technical indicators whereas MT5 has 8 additional bringing the total count to 38.

Graphical Objects
Graphical objects are a set of tools that help in the analysis of prices. They are purely built by MetaQuotes and they are purely non-patented tools. They help to build resistance levels on charts, channels and much more. They would be considered as basic working tools to any trader. Examples of this are cross-hair, trendline and much more. MT4 has a count of 31 graphical objects whereas the MT5 has 44.

Time-frames
MT4 and MT5 have different timeframes that traders can use. MT4 has 9 timeframes whereas MT5 has 21 timeframes giving room for more analysis of the market. Images below show the different time frames.

Economic Calendar
MT5 has the economic calendar embedded in it. The economic calendar is a fundamental analysis tool that helps in getting real-time news that has an impact on the market in terms of volatility. The economic calendar lists news releases from central banks, political news are also featured. This calendar shows brief information about the past, forecast, impact and schedule. The economic calendar is not available on MT4.

Email System
MT4 and MT5 both have the email system that can send notifications from the trading terminal. The difference is that with MT5 the email system allows sending the emails with an attachment whereas with MT4 there is no attachment functionality.

Transfer of funds
Depending on the terms and conditions of a broker, MT5 has the feature that allows transfer of funds between accounts that are within the same trade server. This is not the case with MT4. In MT4, funds transfer is handled by the broker and separate from the MetaQuotes software. Different brokers usually have different funds transfer platform. For example, FxPro uses the vault as a wallet to transfer funds while InstaForex uses the trader’s cabinet tool for funds transfer.

Inbuilt MQL5.community chat
MT5 has an inbuilt MQL5 community chat whereby traders can chat with freelance programmers of expert advisors, indicators, and scripts. With MT4 this functionality is not there. You will have to log into the MQL5 website from the browsers in order to interact with other community members.

Hedging
Hedging is whereby you open multiple positions of a similar financial instrument using same lot size. This will nullify each other, for instance having a bearish and bullish position of silver at the same time. This works with MT4 and wasn’t available in MT5 until early 2016. The latest MT5 version allows to hedge, but before 2016, if one tried to hedge on MT5, the position opened in order to hedge will automatically cancel the initial position. Hedging on MT4 still depends on the rules and regulations of the brokers. For example, U.S. brokers are not allowed to support hedging because of NFA rules.

Netting
Netting is a feature that is allowed in MT5 and not present in MT4. Netting works in the sense that only one position is held instead of multiple trades of the same lot size. For instance, if a trader opens two bullish positions of silver of 2 lots, then with netting this will become one position of 4 lots. This works by weighting the average price for the position.

However, after major MT5 updates in 2016 netting is no longer available in “hedge enabled” accounts and this is why programmers now love MT5 more. Netting was very inconvenient for many traders and programmers. Now order management on MT5 “hedge enabled” accounts is the same as with MT4.
Netting is no longer available in hedge enabled accounts on MT5.

Supported markets
MT4 has Forex, Futures, and CFD as the only supported markets, whereas the MT5 has Options, Stocks, and Bonds as additional markets. Additional markets give traders convenience of trading from the same platform and same broker. Unlike MT4, if a trader had to trade Options or Bonds, he would need to trade from another different platform or probably with another different broker.

Strategy Tester
MT4 and MT5 strategy testers are completely different. The MT4 Strategy Tester uses a single CPU thread, whereas with the MT5 the strategy tester uses multi-threads. MT5 Strategy Tester also allows testing for multiple currencies using real ticks.

Conclusion
In conclusion, though MT4 is an older version, it is not phased out and it has its advantages over the MT5. It is still popular among traders and it will likely to stay that way for quite a while. Even after MetaQuotes announced they will no longer support MT4, probably many traders and brokers will not rush to switch to MT5.


 

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