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MetaQuotes Software Corp., a well-known company that develops financial trading software, released the MetaTrader 4 (MT4) platform in 2005 and has become one of the most popular trading platforms for Forex brokers. Today, it is difficult to find a Forex brokerage that does not support MT4’s platform.
MetaTrader 5 (MT5), MT4’s successor, was released in 2010. Despite having more functionality and up-to-date features compared to its predecessor, MT5 has yet to dethrone MT4 as the number 1 Forex trading platform.
Given MetaQuotes has discontinued support for MT4 versions below 1065 in 2017 and the MT4 platform is more than 15 years old, there is growing concern the company will axe MT4 in the near future to further promote MT5. However, some claim MetaQuotes is giving mixed signals due to it releasing the latest version of MT4 in 2019.
The question remains, should MT4 users switch to MT5?
MetaTrader 4: A Forex Trading Platform Here to Stay?
MT4 utilises MetaQuotes Language 4 (MQL4).
There is a broad consensus that coding MT4 programs to MT5 is problematic and is one of the primary reasons for many remaining with MT4.
According to MetaQuotes, MQL4 is an integrated programming language for developing trading strategies allowing you to create trading robots, technical indicators, scripts, and function libraries for use on the MetaTrader 4 trading platform. All these instruments significantly enhance traders’ abilities when trading Forex.
MT4’s strongest feature is its ability to facilitate automated trading systems (custom indicators – Expert Advisors [EAs]) using revolutionary tools, not only for the development, but also for back testing and optimisation. EAs are often referred to as trading robots. Many experienced traders recommend testing an EA’s performance in the financial markets before unleashing it on the live market and trading real money. This is where a demo account is invaluable. Demo accounts offer a simulated trading platform using real-time market prices. Once an EA has proven itself, many traders operate a small live account and work from there, gradually building the account’s equity.
In addition to MT4’s coding functionality, the terminal boasts a multitude of technical analysis trading tools, serving the needs of most technical analysts. Traders are free to select any combination of technical indicators to formulate trading strategies (trading systems). The demo account feature can be used to forward test any interesting trading ideas.
Like MT5, most Forex brokers enable access to mobile trading on MT4, allowing traders to trade on the go. Traders no longer need to remain glued to their computers, which was the case a couple of decades ago. With MT4, traders are able to monitor active positions and pending orders from any Android or iOS device.
However, the most important thing is MT4 has proven a stable platform over the years. Glitches and bugs are rare.
MetaTrader 5: A Future Trading Platform?
MT5 utilises MQL5 programming language. MQL5 is considered more user-friendly than MQL4 and boasts higher efficacy. End-users are able to alter and redraft scripts. The programming language also does not require various functions to run in the background when executing an operation.
More fundamental analysis can be conducted on MT5 than on MT4. MT5 features a built-in economic calendar, in place to provide data on macroeconomic events. The calendar may also be arranged to suit personal preferences, including setting the calendar according to a specific currency (USD or AUD, for example) or importance.
Advanced depth of market (DOM) features are available (MT4 comes with basic DOM) on MT5. You can access market depth by right-clicking on the financial instrument (via the Market Watch feature) of choice and selecting Depth of Market (Alt+B).
MT5 also allows both netting and hedging, whereas MT4 only permits the latter. For traders who like to ‘lock’ their positions while keeping them open, they will of course choose hedging. Traders who prefer netting have no choice but to use MT5.
On a micro level, MT5 offers more order types than MT4 (2 market orders, 6 pending orders (buy stop, buy limit, buy stop limit, sell stop, sell limit and sell stop limit, 2 stop orders and a trailing stop loss). On a macro level, MT5 offers trading access to more markets as well. MT5 was designed to add new markets beyond Forex, through a centralised exchange.
In a nutshell, MT5 can do all the things MT4 can do, and more. However, this is not necessarily better for some traders. A useful analogy to draw on is TV can do all the things radio can do and more. Nonetheless, radio remains popular because the appeal of radio lies in its simplicity.
Likewise, the appeal of MT4 also lies in its simplicity. For Forex traders who just want to trade the Forex market, MT4 is adequate. Some traders also choose to remain with MT4 due to algorithmic trading strategies having been coded with MQL4, which, of course, are not compatible with MQL5.
For traders who want the added features MT5 brings, as well as access to other financial markets such as the stock market, it could be time to switch to MT5.
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