MetaTrader 4 vs MetaTrader 5: The Ultimate MT4 vs MT5 Comparison Guide

MetaTrader 5 vs 4: a brief introduction

MetaTrader 4 vs MetaTrader 5, which is the better option? Forex traders worldwide have much to thank the MetaQuotes Software Corporation, the company behind these prominent charting platforms.

While plenty of other advanced and newer trading terminals exist, these two, particularly MT4, remain the most well-known. They are easy and free to use, cover tons of markets, and have extensive broker support thanks to cost-effective licensing.

It all began in 2005 with the release of MT4. It quickly became the go-to standard for currency trading due to its user-friendliness and flawless ability to create robots. Five years later, MetaQuotes came out with MT5 with greater features and many other non-forex markets. 

Visually, the differences between MT4 and MT5 are minimal. Although the colors may be a bit more vibrant and modern on MT5, the layouts are almost the same.

There is no learning curve when navigating either of the two since everything is pretty much in the same place. These platforms offer a familiar trading experience with a few subtle but noticeable distinctions. 

Here is a detailed MetaTrader 4 vs MetaTrader 5 guide covering every difference between the two charting terminals.

What is MetaTrader 4?

MT4 is MetaQuotes’ most successful electronic trading platform, first launched in July 2005. It is their fourth-generation product and a significant enhancement to the previous early 2000s MT versions.

Aside from better reliability and security, MT4 introduced the ability for traders to create their robots or expert advisors for automated strategies. In a few years, MT4’s popularity slowly grew to become synonymous with forex trading.

It is now used by nine out of ten forex brokers. Yet, depending on the dealer, you can trade other markets like stocks, metals and crypto (check out our guide about trading crypto on MT4 here).

MetaTrader 4 works in browser, web, and mobile formats on Windows, Android, Linux, and Huawei operating systems. While MT4 doesn’t run natively on Mac OS, a third-party platform like Wine and PlayOnMac does the trick.

What is MetaTrader 5?

MetaQuotes launched MT5 in June 2010 as a massive improvement on MT4 while keeping much of the same user interface that brought them success. 

In looking at Meta Trader 4 vs Meta Trader 5, the developers conceived the latter as a multi-market platform.

MT4 was and still is a forex-oriented software package, despite providing many alternative instruments. Yet, at the time, MetaQuotes looked to break into other markets like futures, stocks, options, and bonds.

MT4 is limited in its market selection, while this range is practically unlimited on MT5. So, what are the other differences between MT4 and MT5? MetaQuotes beefed up the speed, the number of technical tools, order types, and markets. It also introduced a new programing language and a few other little embellishments.

Like MT4, you can use MT5 on the Windows, Linux, Huawei, and Android operating systems. For Mac OS, you need third-party software like Wine and PlayOnMac to run MT5.

Despite having better features than its predecessor, MT4 remains the more widely adopted. Only some MT4 brokers offer MT5 as well (although this is slowly improving).

MetaTrader 4 vs MetaTrader 5 specifications

Here comes the ‘meat’ of this MetaTrader 4 vs MetaTrader 5 guide. The MT4 vs MT5 table below is a thorough comparison of the specs. Afterward, we will examine the most relevant differences affecting the trading experience.

Performance

The first observable difference between Metatrader 4 and 5 is the speed. On an MT5 broker, you can connect to a higher number of servers on your terminal than on MT4. Thus, there are fewer latency chances, which is particularly beneficial for high-frequency strategies like scalping.

Still, the system requirements for running either platform are not intimidating. You don’t need a high-spec computer when you’re looking at MetaTrader 4 vs 5. 

Number of markets

One of the primary creation reasons of MT5 was to include more exchange-based instruments like futures, equities, and ETFs (exchange-traded funds), along with options and bonds. 

Although MT4 offers more than just forex, it is generally limited overall. On the other hand, you have variety and obscurity on MT5, making it remarkable in this portion of the MetaTrader 4 vs MetaTrader 5 battle.

Programming languages

When looking at Metatrader4 vs Metatrader5, it’s natural that the programming language will be different. Yet, like the overall platform itself, MQL4 and MQL5 are similar, with the latter being a tad bit superior.

If you’ve been developing on MQL4 (or know C++), the learning curve on MQL5 is minimal. But what are the technical differences?

Firstly, there is the aspect of speed. As mentioned previously, the performance on MT5 is better as it’s running on a 64-bit platform instead of a 32-bit. MQL5 has more drawing styles, launch models, indicator buffers, and other features.

Generally, developers see MQL5 as an advanced object-oriented language where you can break things down into little complex boxes. However, despite this, MQL4 is still more widely used when observing Metatrader 4 vs Metatrader 5.

One reason is that, between MT5 vs MT4, brokers support the latter more. Yet, if you prefer something advanced, then you should learn MQL5 on MT5. 

Depth of Market (DOM)

The DOM feature is a notable difference between MetaTrader 4 and MetaTrader 5. Depth of market or level-2 data is simply an order book, a feature that shows you how much volume is being traded at incremental price levels.

DOM is beneficial if you understand order flow. However, it is not useful in trading forex for a few reasons. Firstly, FX is decentralized, meaning your broker volume doesn’t represent the entire market.

Also, not every broker offers volume data. Still, DOM may provide an edge if you’re speculating in exchange-based instruments, which usually offer real volume and prices. Yet, similarly, not all brokers provide this information.

Time frames

The time frame variety looking at MetaTrader 4 vs MetaTrader 5 is also noticeable. On MT4, you have the customary nine time frames: M1, M5, M15, M30, H1, H4, D1, W1, and MN.

MT5 boasts 12 more, which include M2, M3, M4, M6, M10, M12, M20, H2, H3, H6, H8, and H12. So, between MT5 vs MT4, MT5 is the clear winner.

Execution types

Here, MT4 has three execution types: instant execution, market execution/execution by market, and request execution/execution on request.

MT5 contains all three with an extra one called exchange execution. Before defining each of these, each mode is assigned once by the broker before creating your account, and you cannot modify it afterward. 

Also, you’ll only ever need market or instant execution on most occasions; no need to worry about the rest.

• Instant execution: Here, the broker aims to execute your order at the current price. However, the broker responds with a re-quote if there are changes above a defined deviation parameter during the processing.

You can decide whether to accept this new price or decline it. The one benefit of this mode is you can reject any unfavorable price. On the downside, you will have unfavorable entries considering that a move may have already begun without you being on it.

• Market execution: This mode is the most preferred among MT4 MT5 traders. Here, the broker executes your order at the current market price even when it’s different by the time they have processed it.

On the downside, the variance may be substantial to the point of slippage because the broker doesn’t offer a re-quote as with instant execution. So, it’s possible to get a worse price than requested.

Yet, the good thing is, assuming there are no volatility hiccups, the execution is faster and guaranteed.=

• Request execution: This mode is not common to see whether you’re using MT4 or MT5. Here, you get a list of prices for a certain order. Once you decide, the execution from the broker can be accepted or declined.

• Exchange execution: This is another rare execution type on MT5. The point of this mode is to receive raw, uninterrupted prices from an external liquidity provider. 

An FX broker either processes your orders internally (‘dealing desk’) or straight through (Straight Through Processing) to an external liquidity provider, most commonly a large commercial bank or forex dealer.

Many traders frown upon the first model because of the perceived conflict of interest. Effectively, the broker is trading against you. However, the second one offers the most transparency and zero chances for manipulation. 

Still, no one can ever verify where your orders are processed, whether you’re using MT4 or MT5. Quite frankly, it doesn’t matter. What’s crucial is that the broker offers the fastest execution and consistent pricing with minimal to zero slippage.

Order fill policy

The order fill policy is extra customisation to the execution types. In comparing Metatrader4 vs Metatrader5, MT4 only has the traditional Fill or Kill. On the other hand, MT5 includes this policy, along with Immediate or Cancel and Return.

In most cases, these only affect traders that trade high volume in the markets.

• Fill or Kill: The platform will fill your order at the requested volume. Should it be unavailable, it will ‘kill’ or not execute it at all.

• Immediate or Cancel: Here, rather than declining the entire order when the broker cannot fulfil the initial desired volume, the software will fill what is available and cancel the rest.

• Return: This order policy applies to market and pending orders, whereas the others don’t. Here, the platform will still fulfill the rest instead of cancelling the remaining volume when the broker cannot process all of it.

Order types

The order types are yet another easily observable difference between MetaTrader 4 and 5. Here, we’ll look at the available pending orders. MT4 has 4 (buy stop, sell stop, buy limit, sell limit), while its successor has 6 in total (4 plus buy stop limit and sell stop limit).

Despite the new additions, most traders do fine with the standard four.

• Buy stop: a pending order to execute a buy trade at a level above the current price. For instance, if GBP/USD was trading at 1.1600, you may decide to have a buy stop at 1.6030.

• Sell stop: a pending order to short a forex pair at a lower level than its current value. For example, if GBP/USD was trading at 1.1600, you could place a sell stop at 1.5970.

• Buy limit: a pending order to go long on an FX market at a price below the current one. For instance, you could have a buy limit at 1.5970 if GBP/USD is trading at 1.1600. 

• Sell limit: a pending order to short a currency pair at a price above the present one. For example, you could have a sell limit at 1.6030 if GBP/USD is trading at 1.1600.

The remaining two pending orders, as we compare MetaTrader 4 vs MetaTrader 5, are quite advanced, combining the functions of stop and limit orders.

• Buy stop limit: this will add a buy stop above the current price and a limit order below it.

• Sell stop limit: this will add a sell stop below the current price and a limit order above it.

Hedging/netting

In our MetaTrader 4 vs MetaTrader 5 review, this is one of the biggest distinctions. MT4 is hedging-based, while MT5 can either be hedging or netting-focused, depending on the chosen broker.

Hedging is a protective strategy where you simultaneously buy and sell the same or correlated markets to offset losing positions between the two. For instance, you go long on USD/JPY and then, at the same time, go short with the same lot size.

If either of your positions runs into a loss at a certain point, you may decide to close it, leaving the other order in a floating profit. Here, a trader could eventually exit this position, too, (resulting in a net change of zero) or let it run.

As with most strategies, hedging isn’t dangerous if you know how to implement it correctly. Still, after the 2008 Great Recession, American financial regulators sought to prevent so-called risky trading practices, with hedging being one of them.

In 2009, the National Futures Association (NFA) introduced the ‘first in, first out’ or FIFO policy. While this rule stemmed from the States, trading platforms like MT5 and cTrader developers incorporated it before launching their respective software.

FIFO simply states that you should close the oldest position first in scenarios where several orders of the same pair are open. In simple terms, you cannot hedge (open two opposing orders on the same pair) with FIFO.

For example, let’s assume you execute a short position on EUR/USD with a 0.5 lot size. After a day, you enter into a long position with a 0.2 lot size. 

Netting-based charting software would automatically close the first order and aggregate your total positional exposure to 0.3 (0.5 – 0.2). Furthermore, the remaining order would be a long position as it prioritizes the highest-sized trade (the 0.5 buy).

Let’s go over a visual example as we compare MetaTrader vs MetaTrader 5. The image below shows a buy (0.50 volume) and sell (0.20 volume) order. You would see this on a broker that allows hedging.

Conversely, you would see this on a netting broker for the same orders.

This is what netting is when looking at a significant difference between MT4 and MT5. It’s an accounting system where the software consolidates all your orders into a single net value. Netting also applies where you open multiple trades of different sizes in the same direction. 

So, for example, if you execute three 0.5 positions on EUR/USD, MT5 would net these as 1.5 (0.5 X 3), adjusting your stop loss and potential profit based on the sum of all orders. In your transaction history, the trader would only see a single 1.5 position. However, the platform would reflect all three orders on a hedging-based account individually. 

Hedging and netting are noteworthy things traders consider when deciding between MetaTrader 4 or 5.

Indicators

So, what’s the difference between MT4 and MT5 when it comes to technical tools? The former has 30, while the latter has 38 (of course, you can add tons of custom ones). 

Let’s look at this Meta Trader vs Meta Trader 5 indicator list below:

Graphical objects

For this category, between MetaTrader 4 or 5, of course, MT5 wins. Let’s look at the graphical objects on each. 

MetaTrader 4 vs MetaTrader 5: which should you choose?

As we conclude our MetaTrader 4 vs MetaTrader 5 discussion, let’s look at quick-fire reasons why someone would choose MT4 or MT5. 

MT4 is best:

• If you’re a beginner trader or MQL programmer
• If you only trade FX and nothing else
• If you have a slightly older OS
• If you incorporate hedging strategies

MT5 is best:

• If you are looking to trade currencies and a different market (or just a non-FX instrument alone)
• If you’re an Elliott Wave trader
• If you prefer the best smoothest execution and performance
• If you’re an advanced developer looking to build the best robot
• If you’re looking to use the DOM feature

Ultimately, both MT4 and MT5 are not worlds apart in difference. It’s a bit like what EA Sports does when releasing new FIFA games; just tiny changes here and there but nothing entirely new.

Similarly, it boils down to which features you need most in deciding between MetaTrader 4 vs MetaTrader 5.