Among the most popular platforms are MetaTrader 4 (MT4) and MetaTrader 5 (MT5). These two platforms, developed by MetaQuotes, are widely used by traders across the world.
However, they differ in features, capabilities, and user experience, which may be quite confusing for any new trader to decide upon one.
In this article, we will look at the key differences between two trading platforms: MetaTrader 4 (MT4) and MetaTrader 5 (MT5) helping you determine which platform is best suited for your trading needs as a beginner.
MT4 vs MT5
MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two of the most popular trading platforms in the world, each offering unique features and capabilities. Below aligns the key differences of boths
1. What is MT4 and MT5?
MetaTrader 4 (MT4) was launched in 2005 and quickly became the go to trading platform for Forex traders worldwide. It is known for its simplicity, speed, and ease of use, making it an ideal choice for novice traders. MT4 offers a wide range of tools and resources for executing trades, including technical indicators, charting tools, and automated trading options.
MetaTrader 5, launched in 2010, is the more recent platform and successor to MT4. While it retains many features that made MT4 a favorite, MT5 adds new tools, expanded capabilities, and a more advanced interface. Its added complexity may overwhelm a complete beginner initially, while it offers more flexibility regarding trading instruments and market analysis.
2. User Interface: Which One is More Beginner-Friendly?
One of the key considerations for beginner traders is the platform’s user interface.
MT4 is known for its straightforward and easy to navigate interface. It’s a no frills platform that allows you to focus on the essentials without unnecessary distractions. The layout is simple, with easy access to charts, indicators, and other essential tools.
MT5 presents a more complicated interface. With the presence of advanced functionality, it is somewhat confusing for users who have just taken up the trading profession within Forex. The increased quantity of tools and the greater advanced charting capabilities may translate to a more considerable learning curve for beginners. However, for those who invest some time in learning, the extended features may be useful over time.
3. Charting and Technical Analysis: MT4 vs MT5
Both MT4 and MT5 boast advanced charting capabilities, but there are some significant differences between the two.
MT4, you get the standard set of charting tools, including various chart types (line, bar, and candlestick), technical indicators, and drawing tools. While this may suffice for many traders, the lack of advanced charting features can be limiting for some.
MT5, on the other hand, offers more advanced charting tools. In addition to the standard chart types, MT5 allows for more customization, including more timeframes (21 compared to 9 in MT4) and more technical indicators. This provides a more robust platform for traders who need advanced charting tools for technical analysis.
For beginners, however, it is better to start working with MT4 since it provides all the basic charting tools that are needed and does not overwhelm the user with advanced options.
4. Order Types: Flexibility in Trading
Performing different types of orders is crucial in Forex trading for managing your risk and maximizing your potential profits.
MT4 offers a standard range of order types: market orders, limit orders, and stop orders. These types of orders are generally good enough for a beginner trader who’s just starting to get into the markets.
MT5 further develops it with the inclusion of more order types, like “Buy Stop Limit” and “Sell Stop Limit” orders. This added flexibility can be useful for more advanced trading strategies, especially for traders looking to fine-tune their entry and exit points.
For beginners, the default order types present in MT4 will be sufficient. As you develop and grow as a trader, you might find the additional order types in MT5 useful.
5. Market Coverage: Trading Instruments and Asset Classes
MT4 will be an excellent choice for those traders who would like to specialize in currency pairs trading. MT4 does support some commodities, indices, and CFDs, this software generally features Forex as its powerful trading solution.
MT5 is enabled with a wider range of asset classes, including stocks, commodities, futures, and indices besides Forex. This makes MT5 more versatile for those traders who want to diversify their trading portfolio beyond Forex.
But for the case of Forex starters, MT4 would, respectively, do the better job. At the same time, for those traders who would later continue with other classes once getting experience, MT5 could be taken into consideration.
6. Speed and Performance: MT4 vs MT5
MT4 is renowned for its speed and stability, especially in the execution of trades. It can handle multiple trades simultaneously without showing much lag or performance degradation. This makes it a very good platform for beginning traders who need a reliable and quick execution system.
MT5 is also a very fast and efficient platform; it is designed to handle more complex tasks, though. It is optimized for handling more data and a wider range of instruments, which occasionally creates minor delays in very heavy market conditions. While these usually go unnoticed, a beginner may feel them at the start of working with MT5.
7. Backtesting and Automated Trading
MT4 pioneered the concept of automated trading using Expert Advisors. These allow traders to create automated trading systems that will automatically execute a trade once their predefined criteria are met. For beginners, this is an excellent way to learn about trading automation and test strategies without having to constantly monitor the markets.
MT5, backtesting becomes even more powerful since one can do multi-currency pair testing with faster execution of test strategies. The additional testing options make optimization easier, though possibly a bit over-the-head of a complete beginner trader who has not mastered the ABCs yet.
8. Mobile and Web Platforms: Ease of Access
Both MT4 and MT5 have mobile and web-based platforms, which enable the trader to access his account from anywhere.
However, MT4’s mobile app has been around longer and is more polished for mobile traders. It is a lightweight application that contains all the basic functions for trading on the go.
MT5’s mobile platform retains all the advanced functionality of its desktop counterpart, and it can be more cumbersome to operate with additional tools and more complex structure on small screens. Anyhow, MT5’s mobile application offers much more functionality and can be useful for users who are accustomed to the desktop application.
9. Community and Resources: Support for Beginners
One of the major plus points about using MT4 is its well established community of traders. Because of the age of the platform two decades almost all kinds of resources, guides, and forums to help beginners abound. From MT4 video tutorials to comprehensive written guides about it, a user will find everything online with ease.
MT5 is the newer platform, and its community is smaller, though growing. The resources available to MT5 are increasing, but not as extensive as with MT4. For a beginner who needs reliable, accessible resources, MT4’s larger community offers a significant advantage.
10. Security: Which Offers Better Protection?
First, both MT4 and MT5 are fairly equal in terms of security, offering similar abilities like encryption to two-factor authentication. However, MT5, being newer in technology, has more advanced security protocols and, therefore, is considered slightly more secure than MT4. This added layer of security can be crucial for traders looking for an extra level of protection.
Both of them provide an adequate security level for a beginner. As you gain more experience in trading, you may look into MT5 for its more advanced options in terms of security.
11. MT4 vs MT5 Which One Should Beginners Choose?
Your final choice between MT4 and MT5 is mainly based on your goals for trading, your experience level, and how much you want to learn.
MT4 is very straightforward, easy to use, and concentrated on Forex, making it perfect for a starting point into the world of Forex. The large community and all its teaching possibilities will make you a great trader.
However, if you want to trade beyond Forex later on, or you don’t mind investing some time into learning about more advanced tools and features, MT5 may be a better fit. It is more flexible, has more asset classes, and more functions that might be helpful in your further development as a trader.
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Frequently Asked Questions (FAQs)
Can I trade stocks on MT4?
- MT4 supports, above all, Forex trading, with partial support for CFDs and commodities. It does not support direct stock trading. If the trader wants to trade stocks or any other financial instrument, such as futures or indices, MT5 is a better choice because it offers more market coverage.
Can I use both MT4 and MT5 simultaneously?
- Yes, you can use both MT4 and MT5 simultaneously. Actually, many traders use MT4 for Forex trading, while using MT5 for other asset classes. Yet, they are two different platforms and you need to install them separately.
Which platform is better for mobile trading, MT4 or MT5?
- Both of them have mobile applications for trading, but MT4’s mobile platform is generally more sleek and user-friendly for the beginning trader. MT5’s mobile app offers more advanced features, but those can be a bit more complicated for beginning traders to navigate.
Can I migrate from MT4 to MT5 in the future?
- Yes, you can easily migrate from MT4 to MT5 when your experience and strategy expand. At the same time, note that MT5 looks differently and has a lot more features, which will need some time to get used to. Most brokers allow you to trade with either of these platforms, so you can transition at your pace.
