Although MetaQuotes Software presented MetaTrader 5 almost 7 years ago, most traders still prefer to use MetaTrader 4. Market participants often criticize MT5 pointing out that MetaTrader 4 is more functional compared to MT5. What is the main difference between MT4 and MT5?
MetaTrader 4 was designed for “over the counter” Forex instruments, such as CFD, while MetaTrader 5 was created for the stock instruments, such as shares, futures and various derivatives.
MetaTrader 5 platform for the index of RTS stock exchange
MT4: hedging - a trader can open counter transactions (multidirectional) for the same instrument and at the same time place additional, one-direction trades. This method is popular among traders, as it helps to reduce trading risks.
МТ5: netting — A trader can trade an instrument only in one direction, multidirectional positions are not allowed.
A trader can open a hedging account in МТ5 and trade instruments; however, stock assets on this account will not be available.
MetaTrader 5 provides market depth for the instruments traded at the exchange, while MT4 only gives a trader a chance to deal with the assets in ECN system, such as OTC. Both platforms give a trader a chance to evaluate orders to buy or sell, assess volumes of the instruments, and carry out two types of trading operations:
- sell/buy financial instrument at the current price
- place trading orders — pending orders to sell/buy a trading instrument at the fixed price
Market depth in MetaTrader 5
Market Depth is useful for scalpers, traders who prefer high risky intraday trading, as market depth allows to speed up presentation of lots. Experienced traders often use special trading robots for such operations
MT5 has a multi-functional and efficient tester, which can implement a function of testing a portfolio, which can be interesting for traders dealing with stock market instruments. The history of quotes can be downloaded in the terminal.
Results of testing are displayed as a chart
MQL Cloud Network provides MetaTrader 5 testers with the endless possibilities of calculations using tens of thousands interconnected computers. In order to get this function a trader shall install a special application Strategy Tester.
The major difference between MQL4 and MQL5 is the level of the programming language platform. Language MQL4 (MetaQuotes Language 4) has been used for robots, scripts and indicators in MetaTrader 4. This language is significantly limited compared to many modern programming languages, as it is used for simple commands and calculations.
In MetaTrader 5, a language MQL5 has been used, which is new, more efficient and close to the well-known object-oriented C++. Developers used syntax, which made the program easy to use: a trader can write and adjust scripts, indicators and trading robots using MQL5 language in the special environment of MetaEditor, as the language provides almost unlimited possibilities.
MetaEditor — multifunctional editor for developing and adjusting trading robots and indicators
Custom scripts and trading advisors have learned to track the activity of a computer mouse and keyboard, and even interact with the external devices thanks to the program of event processing in the MQL5. You can find all templates, libraries, and popular functions on the official website of MQL5.
|MetaTrader 4||MetaTrader 5|
|Professional standards||Over the counter trading, hedging system, spread orders||Exchange listed instruments (shares, futures and derivatives), Netting system, pink sheet stocks|
|Market depth||Market depth of the pink sheet stocks||Updated function of the market depth for the orders to buy shares and futures and pink sheet stocks.|
|Strategy tester||A tester includes a large number of supplements and advisors||A tester does not contain supplements, but it interacts with the complex trading advisors and indicators and supported by the computing clouding service.|
|Programming languages||Program MQL4 allows to create relatively simple scripts, indicators and trading advisors. Effective optimization of trading and analytical processes largely depends on good coding.||Object-oriented MQL5 is based on the complex, but popular and efficient programming techniques, and interaction with external devices and networks. In comparison with MQL4, its possibilities are almost unlimited.|
|Conclusion||Relatively easy, time tested platform with many supplements, designed for trading Forex instruments, CFDs and other OTC derivatives||Professional platform for trading at the exchange markets with the functions of testing of strategies and portfolios and cloud testing and with the improved development environment and programming language, stock market depth, more time frames, built-in economic calendar|
A trader can decide which terminal to use depending on his/her goals. MT5 - is a cross-market platform, which can be used for trading Forex instruments, exchange stocks and assets, while MT4 is a platform for trading in the Forex markets, it has many custom applications and supplements. MetaTrader 5 has strong potential for further development; however, a trader needs experience and interest in exchange operations and high investment culture to use this platform and in this case MT5 will serve as an indispensable Swiss army knife for exercising both the trading and analytical tasks.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.