Forex traders execute trades using a platform. A trader’s chosen platform can play a large role in the outcome of trades and should, therefore, be carefully considered before a decision is made. Each online broker offers a selection of platforms from which a trader can choose, with most only offering one to three platforms. Platform selection is an integral part of trading strategies and should be based on an analysis of the platform’s features.
MetaTrader 4 is one of the most widely used platforms among brokers. This software has set a standard in the realm of quality platforms and is, therefore, a reliable choice for forex traders. Also referred to as MT4, this platform was released in 2005 and continues to be used by brokers and traders across the globe.
MetaTrader 5 is closely linked to MT4 and was released in 2010. However, it is not an updated version of the original platform. It is true that these two platforms are fairly similar, performing at the same type of standard and being produced by the same company. Nevertheless, MetaTrader 5 was designed to complete different goals – ones that MetaTrader 4 couldn’t – and is therefore meant to be used for different reasons. This additional function of MetaTrader 5 is to provide services to those trading in other markets, such as stocks and commodities, rather than solely Forex.
There are several other differences that are worth noting when comparing MT4 with MT5. The original difference in the programming of the two platforms is that MQL5 is used to code MT5, while MQL4 is used for MT4. MQL5 is more developed and allows for a more advanced user and developer experience. While some of these advances were applied to MT4 in 2014, MT5 still has more advanced back testing functions than those of MT4. The back-testing program allows you to test strategies at an increased speed. It also allows you to back-test multi-currency pairs at the same time. This improves the entire strategy testing process.
Under US regulations, MetaTrader 5 does not meet the requirements to provide hedging to its users. The regulations stipulate that those trading with US Forex brokers must close their first trade before closing the second one. MetaTrader 4 complies with this method, known as a first-in, first-out (F.I.F.O) basis, but MetaTrader 5 does not, making the risk management strategy of hedging unavailable.
The two platforms are not linked to upgrade simultaneously and are not backwards compatible. This means an update made on MetaTrader 5 does not apply to MetaTrader 4, which is why this version cannot be viewed as an update.
A decision between these two platforms depends on your desired trading functions rather than which of the two has the best quality. MetaTrader 4 is well-suited for those in the forex trading industry who want a simple yet highly effective trading platform. It has some of the best software and can perform all essential functions in the Forex industry. MetaTrader 5 would be a better option if you are looking to complete vast amounts of back-testing or you want to trade on other markets, such as stocks and commodities.
Despite MetaTrader 5’s additional benefits, MetaTrader 4 remains a reliable option, can perform at an advanced level and is more readily available from brokers. Many highly successful traders use this platform to execute their trades and stand behind its abilities. Its fast performance, access on all devices, and easy navigation make it one of the best platforms in the industry.