Metatrader has been at the top for a long time. This product has a history of introducing some of the most reputable tools in the forex trading industry. MetaQuotes, the organization behind the Metatrader brand, has been in the financial software realm for an extended amount of time and it has a vast experience. This company’s two most common programs are Metatrader 4 (MT4) and Metatrader 5 (MT5). Most traders readily know that they are bound to use either MT4 or MT5 at some point during their trading business.
Forex traders also know that the kind of broker they team up with will also determine their success in the market. What is not commonly known to most traders is the difference or similarities between these two programs. Metatrader 4 is popular among traders and it is often considered the industry standard. If you are planning to get into trading, you need to know how these two programs work so as to choose the right one for you. We will start by looking at Metatrader 5.
A lot of traders tend to think that MT5 is an upgrade to MT4 owing to the fact that it was released a couple of years after MT4. While the interface that the two programs have is fairly similar, any person who has used these two programs will immediately point out their differences. To start with, MT5 was not designed as an upgrade of the first program. Instead, it was developed to achieve its own objectives. As a forex trading software, MT4 was already doing an impressive job in the market. There was thus no reason to create a program similar to it and introduce it with a different name.
MT5 was designed more like a complementary program when compared to MT4. The platform was specifically created because there were certain aspects of trade that were not covered by MT4. The stock and commodities market was for instance not covered by MT4. This is why the new program was created to specifically serve the market of stocks and commodity traders. Essentially, MT5 is functionally different from MT4. It is thus not possible to do a comparison between this program and its progenitor as they were designed to cater for different markets. The focus should be more about what a particular trader will choose to focus on.
Apart from these functional differences, MT5 was also designed to comply with the changing trading policies in the US. There was a rule introduced by the US regulatory against hedging. Metatrader 5 was thus designed to handle trading positions in a unified manner as opposed to MT4 which handles positions separately. Since the law in the US was not applicable for traders in the rest of the world though, MT4 became the go-to program for those interested in hedging. In summary, MT5 was introduced to the market by MetaQuotes to cater for compliance issues and to also cater for a market that was previously uncatered for.
The Difference Between MT4 and MT5 Platforms
Having covered the key features of MT5, only a few other notable differences exist between the two MetaQuotes platforms. One of the major differences that the two programs had, especially after the launch of MT5, was that only MT5 could handle developer options well. This was as a result of the different programming languages used by the company – MQL5 for MT5 and MQL4 for MT4. In recent years though, major changes have been made to MQL4 and thus MT4 can also handle developer programs well too.
Another major issue to note is that the different development backgrounds means that the programs between the two platforms cannot be shared. Also, since MT5 had the benefit of using the latest tech, it is usually a much faster and efficient program compared to MT4.
Which One Should You go For?
As illustrated by the various points above, there is not much debate on the platform to choose. Stock and commodity traders will find the services of MT5 to be suitable for them while forex traders will find MT4 to be built for them. While Metatrader 4 is the older program of the two, it is in no way inferior when it comes to forex trading. In any case, experienced traders will also indicate that the choice of a broker is one issue that determines the success of traders.