When it comes to automated trading platforms, MetaTrader has long been a popular choice among traders. However, with the release of MetaTrader 5 (MT5), some traders find themselves questioning whether to stick with the tried-and-true MetaTrader 4 (MT4) or switch to the newer version. In this article, we will compare MT4 and MT5 to help you determine which platform is better suited for your trading needs.
- Market Coverage:
One of the primary differences between MT4 and MT5 lies in their market coverage. MT4 is mainly designed for forex trading, offering access to various currency pairs. On the other hand, MT5 expands on this by providing access to multiple markets, including stocks, commodities, and cryptocurrencies. If you are solely focused on forex trading, then MT4 may suffice. However, if you have a broader trading strategy and want access to additional markets, MT5 would be the better choice.
- Hedging and Netting:
Another notable difference between the two platforms is their approach to position handling. MT4 uses a hedging model, allowing traders to open multiple positions in the same instrument, both long and short. On the contrary, MT5 employs a netting model, where positions in the same instrument are aggregated into one net position. This means that if you prefer hedging strategies, MT4 is the platform for you. But if you lean towards netting positions, MT5 offers more flexibility.
- Programming Language:
Both MT4 and MT5 have their proprietary programming languages, MQL4 and MQL5, respectively. While MQL4 has been widely adopted by traders and developers over the years, MQL5 offers more advanced programming capabilities. It is important to note that MQL4 indicators and Expert Advisors (EAs) are not directly compatible with MQL5, meaning that migrating from MT4 to MT5 may require some additional coding. If you heavily rely on custom indicators or EAs, it might be worth considering the programming differences between the two platforms.
- Backtesting and Optimization:
MT5 outshines MT4 when it comes to strategy testing and optimization. MT5 offers a more robust and accurate backtesting engine, supporting multiple currency pairs and providing more parameters for testing. Furthermore, MT5 allows for distributed optimization across multiple computer cores, making the process faster and more efficient. If backtesting is a crucial component of your trading strategy, MT5’s advanced capabilities are likely to be more appealing.
- Community and Support:
As MT4 is the older and more established platform, it has a larger and more active community compared to MT5. This means that finding resources like tutorials, indicators, and EAs for MT4 is generally easier. Additionally, many brokers still offer MT4 as their primary trading platform, ensuring broader support and familiarity. However, with the growing popularity of MT5, this gap in community and support is gradually narrowing.
In conclusion, choosing between MT4 and MT5 ultimately depends on your trading preferences and strategy. If you primarily focus on forex trading, prefer hedging, and rely heavily on existing MT4 indicators and EAs, sticking with MT4 might make more sense. However, if you desire access to multiple markets, prefer netting positions, and value advanced programming capabilities and backtesting features, MT5 is the platform to consider.