MT4 vs MT5: Which Is the Best Forex Trading Platform?

MetaTrader4 (MT4) and MetaTrader5 (MT5) are a couple of the most used Forex trading platforms. Both options provide customizable dashboards with access to a variety of charts, technical analysis tools, and additional features.

As MT5 is the newer software, many people assume that it is the best option. However, there are pros and cons to both trading platforms. Whether you are new to Forex trading and looking for the right platform or an experienced trader considering switching to MT5, take a moment to compare the features of MT4 vs MT5.

How Do Trading Platforms Work?

Many Forex brokers, including Hugo’s Way (HUGOSWAY.com), allow you to conduct trades via a stand-alone program that you install on your computer. These trading platforms offer real-time technical analysis and access to helpful resources.

If you are not familiar with Forex trading platforms, MetaTrader4 and MetaTrader5 include two main components — the server and the client terminal. Brokerages operate the servers to handle user requests and perform trade operations.

The client terminal is what you download and install on your computer. It includes a dashboard and allows for real-time technical analysis and trade operations. You can download and install the client terminal for MT4 or MT5 but you still need to open an account with a brokerage.

For example, if you open an account with Hugo’s Way, you can conduct trades via a web-based interface or by downloading and installing MT4. After launching the trading platform, you sign in to your HUGOSWAY.com account and submit your requests using the client terminal interface.

Key Differences Between MT4 And MT5

MT4 and MT5 provide many of the same features, including the ability to trade all major currency pairs and review charts. However, compared to MT4, MT5 offers:

  • Additional types of pending orders
  • More technical indicators and graphical objects
  • Additional timeframes for charts
  • Hedging and netting
  • An economic calendar
  • The trading of stocks and commodities

While you may assume that these additional features give traders an advantage, MT5 may not be the right option for everyone. Here is a closer look at the MT4 vs MT5 debate:

MetaTrader4 Overview

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MetaTrader4, also known as MT4, was released in 2005. It was developed by MetaQuotes Software after previously releasing several other versions of the software. Within two years, MT4 had become one of the most popular trading platforms. A growing list of brokerages added the MT4 platform as an alternative to their existing trading interfaces.

One of the reasons for the success of MT4 was its ability to allow end users to develop open-source trading scripts. A large community of over 12,000 developers frequently adds new open-source software for use with MT4. MT4 uses a proprietary scripting language called MQL4. Individual developers can easily create custom indicators and scripts for the software, increasing the functionality of the trading platform.

Performing Trades On MT4

MT4 was designed to support trades across most of the Forex market. It can handle all major currency pairs. However, it does have a limit of 1024 symbols.

You can complete Pending Orders and Market Orders using MT4. It supports four types of Market Orders and four types of Pending Orders:

  • Buy Stop
  • Buy Limit
  • Sell Limit
  • Sell Stop

For the average trader, these options should cover most Forex trading strategies.

MT4 Technical Analysis

MT4 has a long list of options for market research and technical analysis. The default library includes 30 technical indicators and 31 different graphical objects along with access to over 2000 free custom indicators. You can also choose from nine timeframes, including one-minute charts and monthly charts.

Users can rely on a variety of tools for evaluating charts, including the relative strength index, Bollinger bands, Fibonacci wave drawing, and more.

MT4 Pros

  • Offers a streamlined interface for conducting trades and research
  • Works on 32-bit versions of Windows
  • Requires less RAM compared to MT5
  • Has a larger community of developers
  • Supports most trading methods and strategies
  • Is available from most major brokerages

MT4 Cons

  • Offers fewer technical indicators compared to MT5
  • Offers four types of pending orders instead of six
  • MT4 is no longer supported by the developer

Who Uses MetaTrader4?

Forex traders of all skill levels use MetaTrader4. However, it is especially recommended for beginners and novice traders. While it includes fewer features compared to MT5, MT4 allows traders to focus on developing their fundamental skills instead of overwhelming them with options.

The simplicity of the MT4 interface compared to MT5 may also appeal to seasoned traders who do not want to deal with hundreds of custom indicators. Download MT4 to explore the features for yourself!

MetaTrader5 Overview

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A few years after the release of MT4, MetaQuotes Software began working on the successor to the trading platform. Public beta testing of MetaTrader5 (MT5) began in 2009 and the first live release was launched in 2010.

MT5 includes a variety of upgrades compared to MT4, including additional indicators and types of pending orders. However, many traders and developers refused to make the switch. Several years after the release of MT5, most people still used MT4 for Forex trading.

Keep in mind that MT5 can perform a variety of functions that are unavailable on MT4. The developers created MT5 to support all types of markets, not just the Forex market. It includes the framework needed to support the trading of stocks, commodities, and other markets.

Performing Trades On MT5

While MT5 was designed to support trades in a variety of markets, it is still mostly used for trading currencies. Unlike MT4, MT5 can support unlimited symbols, increasing the potential scope of the platform.

When it comes to Pending Orders, MT5 supports two additional types of trades. You can set a pending order with a Buy Stop Limit or a Sell Stop Limit. This provides a little more flexibility for planning your trading strategies.

The two additional types of pending orders create a buffer by combining two standard types of orders. For example, a Buy Stop Limit combines the Buy Stop order with the Buy Limit order. If the quoted price reaches your Buy Stop Limit, the trading platform initiates a Buy Limit order.

Using MT5 unlocks these additional types of trades. However, most traders are comfortable sticking with the four types of pending orders available on the MT4 platform.

MT5 Technical Analysis

Along with providing access to additional types of pending orders, MT5 provides additional options for technical analysis and charting capabilities. Instead of 30 technical indicators and 31 graphical objects, MT5 includes 38 technical indicators and 44 graphical objects. You can also choose from 21 different timeframes. The additional timeframes include 2-hour, 8-hour, and 12-hour charts.

MT5 also adds an economic calendar tab with custom features for categorizing economic indicators into groups, such as news events, impact, forecast, schedule, and previous. The additional indicators, objects, and timeframes may appeal to some traders. The additional objects may help detect trends and support or resistance levels. However, as with the extra types of pending orders, the additional indicators and objects are not essential. You can still make successful trades without the extra bells and whistles.

MT5 Pros

  • Offers additional technical indicators
  • Allows you to initiate “Buy Stop Limit” and “Sell Stop Limit” pending orders
  • Includes additional timeframes for charts that may help day traders
  • Comes with a built-in economic calendar tab
  • Provides support for more markets, including stocks and commodities
  • Provides technical support

MT5 Cons

  • The desktop version only works on 64-bit Windows OS
  • The variety of options may be overwhelming
  • Not as many brokerages support MT5 compared to MT4

Who Uses MetaTrader5?

MetaTrader5 is mostly used by Forex traders with years of experience who need the additional insight provided by the newer software. The additional indicators and features may be overwhelming to most traders but they can also help detect support or resistance levels that you may go unnoticed when using MT4. Day traders may also prefer the additional timeframes available for charts.

MT4 vs MT5: Compatibility With Forex Broker

Now that you know more about the features of MT4 and MT5, you still need to explore one more detail to find the right trading platform. You need to determine which trading platforms are supported by your chosen brokerage.

For example, HUGOSWAY.com allows you to use the MT4 trading platform. Users have access to the Windows, iOS, and Android versions of the software. If you want to use MT5, you need to find a brokerage that supports the platform. As MT4 remains the most popular trading platform, fewer brokerages provide access to MT5.

MT4 vs MT5: Compatibility With Your Device

The next consideration is how you plan on using the trading platform. MT4 and MT5 are both available for the Windows operating system (OS). Unfortunately, there is not a native version for Mac OS.

If you plan on installing one of these trading platforms on a Windows desktop, you may need to determine whether you have a 32-bit or 64-bit version of Windows. MT4 is a 32-bit program that requires at least 2GB of RAM. However, you may need 4GB of memory if you run MT4 on a 64-bit OS.

MT5 is a 64-bit program, which means that you need to have a 64-bit version of Windows. It also requires at least 4GB of RAM but may require more to run smoothly. MT4 is also a smaller program. It requires fewer resources from your computer and should run well on older desktops that meet the minimum technical requirements.

If you prefer to conduct trades on your smartphone or tablet, both options are available for iOS and Android devices. Almost all the features found on the desktop versions are available on the mobile versions of the software.

Should You Worry About MT4 Being Phased Out?

MT4 was originally released in 2005 and MT5 was released in 2010. A few years ago, MetaQuotes Software stated that they would stop supporting MetaTrader4. Technical support has ended for MT4 but the company still supports MT5. This leads some traders to wonder whether MT4 will be phased out.

The truth is that MT4 is likely to remain the preferred choice for the average trader for the foreseeable future. Almost every major Forex brokerage still supports MT4. It also has a much larger community compared to MT5. If you experience any technical issues, you have multiple ways of finding solutions.

Depending on the situation, you may be able to contact the brokerage that you use. However, thanks to the size of the MT4 developer community, you can often find solutions by searching for answers online. While MetaQuotes Software stopped providing technical support for MT4, it is not at risk of being phased out by major brokerages.

Takeaway: Which Trading Platform Should You Use?

MT4 is simpler to use, making it a suitable option for beginners and those who want a streamlined trading platform. It includes a customizable interface with charts and a variety of resources and notifications.

MT4 includes technical analysis tools with 30 built-in indicators and 2000 custom indicators. However, MT5 provides a wider range of features for advanced traders. It offers 38 technical indicators and 44 analytical objects for greater technical analysis.

Unlike MT4, MT5 includes market depth and economic calendar features. You also gain access to six types of pending orders instead of four. The variety of extra features makes MT5 more robust and geared toward experienced Forex traders. If you are just getting into Forex trading, you may want to start with MT4.

The simplicity of MT4 compared to MT5 does not mean that experienced traders should avoid using the older software. In fact, the complexity of MT5 may decrease the success of your trades. You have an increased risk of overanalyzing your trades, resulting in fewer profits.

The bottom line is that MT4 includes everything you need to successfully trade currencies on the Forex market. It is also supported by most brokerages. Instead of getting lost in the variety of indicators available on MT5, make smarter decisions with the help of MT4.

Download the MT4 client terminal and open an account at HUGOSWAY to start trading.

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