If you are into forex trading, you may already be aware of the MetaTrader 4 and MetaTrader 5 platforms. These two software solutions are among the top trading platforms that cater to a number of traders and advisors. This is majorly because of how efficient their tools and resources are for assessing positions and acting in line with the market trends. Visit multibankfx.com
Despite the fact that the names might indicate that MT5 is simply an upgrade from MT4, these are two very different solutions with varying functions and features suited to different audiences. Out of MT4 and MT5, which one you should pick is something you should decide on the basis of your background and your financial goals.
MetaTrader 4 is commonly used by forex traders. It was rolled out in 2005 and since then, numerous users have been able to access the financial markets through this online trading platform. Though it’s true that MT4 was created particularly for Forex trading, it can also be used to trade different assets like stocks, indices, and commodities via CFDs.
Both beginners, as well as seasoned traders, find MT4 useful because of how multi-functional, user-friendly, and customisable it is. One can also access advanced trading tools which makes it easier to use your favorite strategies.
MetaTrader 5 is an online trading platform on which you can grade multiple assets. It was released five years after MT4 in 2010. that was released in 2010. Though it is faster and much more efficient than MT4, it has not made MT4 redundant. Using MT5, traders are able to work with more financial instruments such as Forex, stocks, indices, commodities, and even cryptocurrencies.
MT5 allows access to all the key tools required for successful trading such as advanced technical and fundamental analysis, trading signals, algorithmic and copy trading, and even trading robots.
Assets being traded
The key difference between MT4 and MT5 is the types of traders who come to these platforms. MT4 was created to meet the needs of forex traders which can be seen in its features and functionality. This is why MT4 is popular among forex traders and is widely used in the currency market.
MT5 has various different applications in contract-for-difference (CFD), stock, and futures trading. This also implies that it has a much wider range of features that may not be significant for all traders. However, if you trade multiple types of assets, you may find it more useful for achieving your trading goals. Do bear in mind that even though it is possible to use MT5 for forex trading, the features and tools that can be used for assessing forex charts are not the best and might affect your efficiency if you use MT5.
Access to the FIX API
The Financial Information eXchange (FIX) API is a robust tool for traders who wish to obtain real-time information about financial securities. Market regulators as well as traders use FIX API to exchange relevant information with regard to before and after trades. It is also used for information that confirms new orders and executed trades.
There are plenty of advantages of a FIX API integration. A key aspect of this integration is that it offers a higher degree of financial information. The information is also formatted in a standardized way to ensure that there is no language barrier obstructing clear communication. The FIX API has also simplified the way in which black-box strategies or private algorithms are used to analyze forex trades.
Remember that FIX API only works via MT4 and not MT5.
Chart Time Frame
MT4 was created to simplify the trading process. Traders who are just starting out, do not need access to detailed and complicated time frame data. This is where MT4 turns out to be better as it equips you with all the resources you need but doesn’t overwhelm you with complex features.
MT4 allows traders to pick from nine different time frames in chart analysis. MT5 on the contrary allows access to 21 different time frames which depicts a clear expansion on MT4’s offerings. However, a majority of traders would find this unnecessary for particular trades like CFDs—these can be advantageous. For the more seasoned traders with a very diverse portfolio, this information may seem useful.
MT4 has four basic order types: buy stop, buy limit, sell stop, and sell limit. These are sufficient for a majority of traders as it helps in executing trading strategy while cutting down risk exposure and giving you better control over your trade entries and exits. Besides these, MT5 offers two more order types: buy stop-limit and sell stop-limit orders. This is better suited to seasoned traders who would find the increased flexibility useful in assessing the way price movement triggers buys and sells.
MT4 and MT5 have their own tailor-made programming languages that allow you to easily access a variety of trading capabilities and customize the tool on the basis of your trading requirements. On MT4, one may assume that traders want a platform that is quick and easy to install and set up.
This is why MT4 is ideal for new traders who are not yet looking toward building their own scripts or algorithms for their trading strategy.
Less Commonly Used Features
When choosing between MT4 and MT5 make sure you look at the nuances that could play a huge role in your trading experience. For instance, hedging certain trades is an option that both MT4 and MT5 offer, netting is possible only in MT5, which is a key tool for many traders to reduce risk.
MT5 even offers a few more technical indicators than MT4, along with different types of tools like an economic calendar where you can track important news from different markets around the world. However, remember that the more tools offered the more complex the software gets and the bigger the learning curve.
MT5 offers plenty of features like a multithreaded strategy tester, transfer of funds from one account to another, and an embedded community chat. You would not find these on MT4. These are some features that may not be relevant to all but you should assess your requirements to see if they add any value in your case.