As the trading industry continues to gain popularity, innovative trading platforms remain in demand.

Considered one of the world’s leading designers of trading software, MetaQuotes Software Corp offers several applications. Established in 2000, although having developed a series of popular software products, MetaTrader 4, or MT4, and MetaTrader 5, or MT5, symbolise clear milestones for the company.

The software is licensed to the majority of forex brokers, then offered to retail traders.

The question then arises, which platform offers you the most benefit?

MetaTrader: The Beginning

In July 2005, MetaQuotes launched MT4, a revolutionary trading platform for the forex market – a breakthrough for MetaQuotes Software Corp, boasting ground-breaking tools, testing facilities, and optimisation of trading robots.

Five years later, MetaQuotes Software Corp launched MT5, a multi-asset platform, offering the use of algorithmic trading applications and copy trading. Despite this, though, the MT5 interface has a similar layout to MT4. The revolutionary factor of MT5 is its ability to offer trading for almost all financial markets, including forex, stock exchanges, as well as futures.

MT4 and MT5 deliver rapid execution for users, provides real-time prices, allows clients to place orders and manage accounts. Both platforms offer cutting-edge automated trading functions.

Timeframes

An important consideration for many is the capability of assessing price action from numerous angles.

MT4 offers 9 traditional timeframes on each currency pair – ranging from as low as the 1-minute timeframe through to the long-term monthly chart. Comparing the two, MT5 blows MT4 out of the water, providing users 21 different timeframes on any financial instrument.

MT5 provides the choice of viewing the 2-minute timeframe and 3-minute timeframe, for example. It also has 7 different hourly charts. The extra timeframes allow for more exhaustive analysis, particularly for price action-based traders. Supply and demand traders examine different timeframes to avoid entering into a position against opposing higher-timeframe zones.

Trading Orders

Having the ability to enter the market at desired levels, unhindered by the trading platform’s order system, is a necessity for all traders.

The Metatrader 4 (MT4) platform offers 2 market orders, 4 different pending order types (buy stop, buy limit, sell limit and sell stop), 2 stop orders, and trailing stop.

The Metatrader 5 (MT5) platform offers 2 market orders, 6 pending order types (buy stop, buy limit, buy stop limit, sell stop, sell limit and sell stop limit), 2 stop orders and trailing stop.

A market order is an order that permits entry/exit at the next available price. The execution price is not guaranteed as available bids/offers may be limited at the time of execution.

Sometimes referred to as a limit order, a pending order affords the option of selecting the purchase (or selling) price. In times where the market fails to reach the pre-determined limit value, the order remains in situ, unfilled. Bear in mind, though, thin liquidity may result in the limit order still remaining unfilled, despite having tested the level.

Protective stop-loss orders help retain profits and reduce losses. These orders are used in combination with market or pending orders, as well as with trade positions.

Trailing Stop effectively tails price if the position trades favourably. An unfavourable market move will see the trailing stop suspend movement until either price recovers, or tests the stop-loss order.

MQL4 and MQL5

MQL4 and MQL5 are programming languages (MetaQuotes language) designed to develop algorithmic software.

With MQL4 you can develop various trading tools for MT4, such as automated trading robots, Expert Advisors (EAs), and technical indicators. Essentially, MQL4 is in place to create trading programs based on the order system, while MQL5 is used to implement a positional system.

MQL4 requires multiple functions for performing each operation. MQL5, on the other hand, is more efficient and easier to use.

Another key point to bear in mind is programmed for MT4 cannot run on MT5.

Mobility and Compatibility

Mobile versions via iOS, Android-powered smartphones and tablets, allows account access 24 hours a day. The functionality offered on mobile versions includes interactive charts, trading orders, analytical tools, account status and buy/sell functions.

MT4 and MT5 WebTrader trading platforms are compatible with Google Chrome, Mozilla Firefox, Apple Safari and IE 10+.

MT4 and MT5 for Windows are available on Windows 7 or higher. It is also supported on Mac OSX.

Technical Analysis

MT4 technical analysis tools comprise 30 built-in indicators, over 2,000 free custom indicators, and 700 paid ones. MT4 offers 24 analytical objects: lines, channels, the Gann and Fibonacci tools, shapes, and arrows.

MT5 provides 38 technical indicators and 44 graphical objects, which are available for comprehensive market analysis.

Traders who prefer their trading interface a certain way are able to customise their platforms on both MT4/5.

Setting alerts is common practice in trading; both platforms permit this function. This allows the trader to either do something else at the desk or step away and focus on things outside of trading.

MT5 also has an economic calendar, there to warn traders when macroeconomic news and key central bank speeches are due.

MT4 allows only hedging. The MT5 platform, though, allows both hedging and netting.

MT4 or MT5?

MT5 was released in 2010, five years after MT4.

MT4 was and remains to this day, a popular forex trading platform.

Which trading platform to select, of course, comes down to personal preference.

Newer traders, with a focus on foreign exchange trading instruments, may find MT4 more appropriate as its simpler to use. Those with an interest in more adaptable software, MT5 could then be a valid contender.

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