For those that are new to the world of forex, MT4 and MT5 are little more than collections of letters and numbers.
There’s no meaning attached to them, or else you vaguely recognise that they symbolise different platforms, but have little understanding of the differences between them.
To clarify, MT4 and MT5 are two platforms for trading the foreign exchange. The latter was formulated as an upgraded and improved successor to the former. However, since its introduction in 2010, many experienced traders have failed to transfer from MT4 to MT5. Indeed, many claim to prefer the older version to its newer counterpart.
Some commentators claim that this is because MT5 was not an improvement on MT4, but only an alternative to it. Others argue that it is simply because investors are reluctant to switch from a platform they know and understand to one that they don’t.
If it’s time for you to make a decision between the two, here are a few differences that you ought to know about…
Although MT5 was simply intended to be a new and improved version of MT4, there are actually some major differences between them. This page on Metatrader MT4/MT5 was a very useful resource when we were putting together this article.
Many experienced traders claim that MT5 is easier to navigate, as the buttons are larger and more widely spaced.
However, despite being easier to use, MT5 does have its downsides, and one of the most frequent complaints is that it has a smaller charting area.
Another criticism of MT5 is that the Fibonacci retracement tools don’t always work precisely.
However, it should also be borne in mind that the MT5 offers a greater variety of graphs and analytical tools to use, and they’re often far more advanced than those available for users of the previous version.
Hedging and Multi Hedging
Strangely, when the new and improved MT5 platform was released, it failed to allow for hedging and multi hedging. These were key features behind the decision of many investors to use MT4, and are one of the main reasons that so many traders are unwilling to switch from the older version to its newer counterpart.
However, despite a common misconception, hedging is still possible – it just requires the use of plug-ins.
MT5 offers more timeframes than its predecessors, including two minutes and eight hours.
Ways to Trade
MT5 offers a further boon in terms of ways of trading. It has a wider variety of investment instruments and trade methodologies, making it far easier to develop strategies that complement your individual trading style.
Another criticism of the MT5 is that it requires a lot more space than its predecessor – around three times more RAM capacity, according to some figures. This means that downloading and installing takes longer than it does for its MT4 alternative.
Which Should You Choose?
Many brokers, such as FxPro, will offer you a choice of the two platforms, leaving you with a decision to make. In truth, it is one with no easy answer. When it comes down to it, both MT4 and MT5 have their advantages. Although the former remains more popular, this really is largely down to investors’ familiarity with it, as opposed to any inherent inferiority. Different systems thus suit different traders to varying degrees, and there is no straightforward solution when it comes to advising you on which would be best. In the end, it comes down to a simple game of weighing the two one against the other, and picking the option that best suits your aims.