Introduction
MetaTrader is a popular trading platform that is widely used by traders all around the world. The platform is available in two versions – MT4 and MT5. Both platforms offer advanced trading tools, but there are some significant differences between the two. In this article, we will explore the differences between MT4 and MT5.
What is MT4?
MT4 is short for MetaTrader 4. It was released in 2005 by MetaQuotes Software Corp. MT4 is a popular trading platform that is used by forex traders all around the world. It is known for its advanced charting tools, real-time quotes, and the ability to use automated trading strategies.
What is MT5?
MT5 is short for MetaTrader 5. It was released in 2010 by MetaQuotes Software Corp. MT5 is an upgraded version of MT4, and it offers some advanced features that MT4 does not have. MT5 is also designed to support trading in other markets, such as stocks and futures.
Differences Between MT4 and MT5
1. Programming Language
The programming language used in MT4 and MT5 is different. MT4 uses MQL4, while MT5 uses MQL5. This means that if you have an automated trading strategy written in MQL4, you will need to rewrite it in MQL5 if you want to use it on MT5.
2. Market Coverage
MT4 is primarily designed for forex trading, while MT5 is designed to support trading in other markets, such as stocks and futures. This means that if you want to trade in multiple markets, MT5 may be a better option for you.
3. Timeframes
MT4 supports nine timeframes, while MT5 supports 21 timeframes. This means that you have more options when it comes to charting and analyzing data on MT5.
4. Hedging
MT4 allows hedging, while MT5 does not. This means that if you want to open multiple positions in the same instrument in different directions, you can do so in MT4 but not in MT5.
5. Netting
MT5 supports netting, while MT4 does not. This means that if you have multiple positions in the same instrument, MT5 will offset them against each other, while MT4 will not.
6. Depth of Market
MT5 offers a Depth of Market (DOM) feature, which allows you to see the number of buy and sell orders at different price levels. This feature is not available in MT4.
7. Economic Calendar
MT5 has an integrated economic calendar, which allows you to see upcoming economic events that may affect the markets. This feature is not available in MT4.
8. Strategy Tester
The strategy tester in MT5 is more advanced than the one in MT4. It allows you to test your trading strategies using multiple currency pairs and timeframes. This feature is not available in MT4.
Conclusion
Both MT4 and MT5 are popular trading platforms that offer advanced trading tools. However, there are some significant differences between the two. If you are primarily a forex trader, MT4 may be a better option for you. If you want to trade in multiple markets, or if you want to use advanced features like the Depth of Market or the economic calendar, MT5 may be a better option for you.
Tips for Using MT4 and MT5
1. Learn the Basics
Before you start trading on MT4 or MT5, take some time to learn the basics of the platform. This will help you to use the platform more effectively and make better trading decisions.
2. Use a Demo Account
Both MT4 and MT5 offer demo accounts, which allow you to practice trading without risking real money. This is a great way to get familiar with the platform and test your trading strategies.
3. Use Automated Trading Strategies
If you are not comfortable with manual trading, you can use automated trading strategies on both MT4 and MT5. These strategies can be backtested and optimized to improve their performance.
4. Keep an Eye on the Markets
MT4 and MT5 offer real-time quotes and charting tools, which allow you to keep an eye on the markets and make better trading decisions. Make sure you stay informed about market news and events that may affect your trades.
5. Use Stop Loss Orders
Stop loss orders are an important risk management tool that can help you to limit your losses. Make sure you use stop loss orders on every trade you make.