MT5 vs MT4: The differences between trading platforms

mt5-vs-mt4-featured-image-704x350

MT5 and MT4 trading platforms have quite a lot of things in common, but they are different at the same time. In this article, I will explain those differences in detail.

Comparison of MetaTrader 5 and MetaTrader 4

Below are MT5 and MT4 trading platforms compared.

Feature metatrader-5-logo-170x45 metatrader-4-logo-171x45
Execution Modes
Number of order execution modes supported in the platform
4 3
64 Bit Version
Native support for the 64-bit architecture
green-check-mark-true-64x64 red-cross-false-64x64
Server Architecture
The underlying server architecture of the platform
Distributed Single
Account groups
The number of trader account groups that can be created in the platform
Unlimited 512
Security Groups
The number of groups of financial instruments supported in the platform
Unlimited 32
Built-in order routing
The native routing option, which allows managing trade request processing rules
green-check-mark-true-64x64 red-cross-false-64x64
Orders database size
The maximum order database size without compromising the performance of the platform
Unlimited Up to 10M orders
Reports
Formats of platform supported internal reports for back and middle offices
Charts (HTML5)
+ tables
Tables only
Balance transaction types
Balance transaction types supported in the platform
Balance, Credit, Correction, Charge, Bonus, Commission, Agent, Interest Balance, Credit
Log-files ZIP compression
ZIP compression of statistic log-files, in which the server records all executed operations and events
Automated red-cross-false-64x64
SQL Export
Native realtime export to an SQL database
Native (MySQL, MSSQL, Oracle) Limited (MySQL)
Manager API
Supported programming languages for Manager API, which enables integration of the platform with broker system
C++, ASP.Net, PHP C++
Gateway API
Support for Gateway API which enable platform integration with trading systems
green-check-mark-true-64x64 red-cross-false-64x64
Report API
Access to the Report API allowing to enhance the functionality of trade server reports
green-check-mark-true-64x64 green-check-mark-true-64x64
Partial Order Filling Policies
Availability of the partial order filling option, in which a trade with the maximum volume that is now available in the market is executed, not exceeding the volume requested in the order, while unfilled volume is canceled
green-check-mark-true-64x64 red-cross-false-64x64
Order Fill Policy
Order fill policy — you can set additional order execution conditions
Fill or Kill
Immediate or Cancel
Return
Fill or Kill
Pending Order Types
Types of pending orders requesting a broker to buy or to sell a financial security under pre-defined conditions in the future
6 4
Depth of Market
The Market Depth option, which features bids and offers for a financial security at different prices depending on the volume
green-check-mark-true-64x64 red-cross-false-64x64
Time&Sales (Exchange data)
Ability to receive data on Time & Sales from the Exchange
green-check-mark-true-64x64 red-cross-false-64x64
Technical Indicators
The number of technical indicators, which can automatically detect patterns in the financial instrument price dynamics and help users to make trading decisions
38 30
Graphical Objects
The number of analytical objects that help to identify financial instrument price trends, to detect cycles and support/resistance levels, to build channels and more
44 31
Timeframes
The number of timeframes — time intervals in which quotes of financial instruments are grouped
21 9
Economic Calendar
Availability of the Economic Calendar — the fundamental analysis tool featuring publications on various countries’ macroeconomic indicators, which can affect financial instrument prices
green-check-mark-true-64x64 red-cross-false-64x64
Email System
The features of the built-in email service, which enables users to receive important information from a broker straight in the platform
green-check-mark-true-64x64with attachments green-check-mark-true-64x64no attachments
Transfer funds between accounts
A possibility to transfer funds between accounts within the same trade server
green-check-mark-true-64x64 red-cross-false-64x64
Embedded MQL5.community chat
Possibility to chat with other traders directly in the platform
green-check-mark-true-64x64 red-cross-false-64x64
Strategy Tester
Trading robot testing and optimization modes supported by the built-in Strategy Tester
Multi-threaded
+ Multi-currency
+ Real ticks
Single thread
Multilingual Unicode
Support for the Unicode character encoding standard that ensures the correct display of characters and symbols in any language
green-check-mark-true-64x64 red-cross-false-64x64
Netting
Support for the netting accounting system, which only allows having one open positions of a financial instrument
green-check-mark-true-64x64 red-cross-false-64x64
Hedging
Support for the hedging accounting system, which allows having multiple positions of a financial instrument, both in the same and opposite direction
green-check-mark-true-64x64 green-check-mark-true-64x64
Symbols
The number of financial instruments that can be traded in the platform
Unlimited 1024
Supported Markets
Financial markets, on which the platform users can trade
Forex / CFDs / Futures /
Options / Stocks / Bonds
Forex / CFDs
Exchange Trading
Support for Exchange Markets, offering stock, futures, bond and option trading
green-check-mark-true-64x64 red-cross-false-64x64

For many years Forex traders have been wondering when will MT5 replace MT4 platform and how this process will look like. Well, this day has come and in November 2016 MQ announced that MT5 is about to replace MT4 client terminal. They will no longer provide support for MT4.

MetaQuotes Software Corporation is a Russian company with offices in Limassol, Cyprus. It is the owner of MetaTrader 4 and 5 trading software that is used by many traders for forex trading and other online trading business. MT4 was developed on 1st July 2005 while MT5 was released on 1st June 2010. The software has many differences in terms of the functionalities and features. Below is a detailed explanation of the differences between MT4 and MT5.

Execution Modes

MT4 and MT5 have different execution modes. The MT4 has three execution modes whereas the MT5 has four execution modes from the client’s terminal. The following are the execution modes offered: market, instant, request, and exchange execution. The extra execution mode of MT5 is the “exchange execution“.

64 Bit Version

The operating system that is supported by these two different forex trading platforms is not the same. MT5 being the latest version of the software runs well on 64-bit operating systems whereas the MT4 is ideal for a 32-bit operating system. You will need the set-up execution file in order to install the software. It is important to note that MT5 can run on the 32-bit operating systems too.

However, when it comes to running MT4 on 64-bit systems you will notice that it does not work that fast as on 32-bit systems. It’s not always the case, but if you use MT4 on a VPS server with multiple CPU cores, it will not work efficiently. If you use MT4 on a VPS server and it is slow then follow these steps to improve MetaTrader 4 speed.

Server architecture

MT4 and MT5 have different server built ups. The MT4 has only one dedicated server that is restricted in its communication with other servers. The MT5, on the other hand, deploys jobs to other servers and they work together giving synergy and are able to achieve hardware utility as well as improving results because of the different servers communicating and working together leading to resource optimization. There are four main servers that MT5 uses; Access server, trade server, history server and backup server. This is unlike the MT4 that use only one server engine.

Account groups

The limitation with MT4 is that the max number of terminals on the same computer has been set to 32 whereas for MT5 is unlimited. However, I have not tested this personally myself yet with MT5.

Built-in order routing

The MT4 had a limit in which forex brokers would be required to develop their systems that would be linked to liquidity providers such as banks and financial institutions such as JP Morgan and Citi bank. With the new MT5, it has an in-built functionality that integrates with the liquidity providers system whenever a trade is placed.

Orders database size

The database that would host MT4 platform was only restricted to accept 10 million trades. This looked a relatively smaller figure by then. However, as the popularity of forex trading has grown overtime there was the need to develop a platform that would allow more trades. With MT5 the numbers of positions are unlimited. This literally means even if all the forex traders would place 100 trades the database wouldn’t go down because of the number of trades.

Reports

Reports that you can pull from MT4 software are only in HTML format. With MT5 the reports are both in HTML format and Open XML table format. See images below.

mt4-save-report-html

Balance transaction types

The kinds of balances that will appear on MT4 are only balance and credit with MT5 having a wider coverage and breakdown of the balances. To be precise MT5 has 6, commission, balance, interest, correction, charge, bonus, agent, and credit.

Log-files ZIP compression

There is a difference in log files in that with MT5 the log files are automatically compressed whereas with MT4 the log files are not even compressed. In MT5 you can get codes from the code base as compressed zipped folders which you can store on your local drive.

SQL Export

There is a difference between the database programming languages that MT5 and MT4 use. With MT4 it is limited only to Microsoft MySQL whereas with MT5 the database languages for retrieving information from the server has an extension of Oracle’s PLSQL, MySQL, and MSSQL making them three instead of only one.

Manager API

The manager API helps to build additional functions within the MT4. This interface can allow you to build your own terminal that would fuse with the MetaQuotes software.

The interface language will help in the flexibility of integrating with other systems. The programming language that MT4 uses is C++. With MT5 there are new programming languages have been incorporated these are ASP, .Net and PHP.

Gateway API

A gateway allows brokers to build an interface of their system to others. This allows a gateway that would accept multiple providers. This would be ideal if you wanted to connect to a stock exchange or a liquidity provider remotely. With MT4 there are no gateways and therefore forex brokers are forced to hire their own technical team to build them the gateway API.

Partial Order Filling Policies

With MT4 there was only two order filling policy, fill or kill. This simply means that if an order is placed by a trader then its execution is supposed to be immediate (fill), otherwise kill the order if it is not executed. With MT5, traders are given a reprieve in that an order would be given immediate cancel or return. With immediate cancel implying that if part of an order is not filled, then the broker should cancel. And return implying that if part of an order is not filled, the broker can allow MT5 to create a limit or market order to fill the remaining volume.

mt4-fill-or-kill-mt4

Order Fill Policy

MT5 allows for partial orders, if for instance the maximum volume of a trade is met and the trade is not filled, traders can select partial edit to allow for the remaining volume to be canceled. This is ideal when purchasing contracts and you have placed a certain contract as an order. If at the execution the order it is not filled, the order will not be killed, rather it will pick/fill whatever the contracts that have been able to fill the rest would be returned. This functionality is not there in MT4.

Pending Order Types

Pending orders allow for a trade to be executed in the future time whenever a preset condition is met. MT4 allows for 4 types of pending orders whereas the MT5 has 6 pending option types; buy limit, buy stop, sell limit, sell stop, “buy stop limit” and “sell stop limit”. MT4 doesn’t have “buy stop limit” and “sell stop limit”. The images below show the different pending order types.

Pending orders on MT4

Pending orders on MT4

Pending orders on MT5

Pending orders on MT5

Depth of Market

The depth of the markets gives a picture of the best prices which are a representative of the market prices. This allows traders to also execute trades at best prices. This functionality isn’t there in MT4. To see the depth of market window you hit the ALT+B buttons. Below are images showing the depth of market.

Depth of Market on MT5

The depth of Market on MT5

Time and Sales / Exchange data

Time and sales data provides traders with an outlook of the price levels. An increase in bullish positions will be seen same as bearish. This change in volumes helps intraday as well as long-term traders with speculation of price movement. Time and sales data is not only visual but can also be exported to spreadsheets such as MS Excel.

Time and sales data tool is only found in MT5 build 1375 and it’s not in MT4.

Technical Indicators

Technical indicators are used to detect price patterns based on Dow’s theory. Use of Dow’s theory has seen traders come up with models that are used in price prediction using patterns, lines, and mathematical calculation that are assumed that they will repeat themselves over time. MT4 has 30 technical indicators whereas MT5 has 8 additional bringing the total count to 38.

Graphical Objects

Graphical objects are a set of tools that help in the analysis of prices. They are purely built by MetaQuotes and they are purely non-patented tools. They help to build resistance levels on charts, channels and much more. They would be considered as basic working tools to any trader. Examples of this are cross-hair, trendline and much more. MT4 has a count of 31 graphical objects whereas the MT5 has 44.

Time-frames

MT4 and MT5 have different timeframes that traders can use. MT4 has 9 timeframes whereas MT5 has 21 timeframes giving room for more analysis of the market. Images below show the different time frames.

9 time frames on MT4

9 timeframes on MT4

21 timeframes on MT5

21 timeframes on MT5

Economic Calendar

MT5 has the economic calendar embedded in it. The economic calendar is a fundamental analysis tool that helps in getting real-time news that has an impact on the market in terms of volatility. The economic calendar lists news releases from central banks, political news are also featured. This calendar shows brief information about the past, forecast, impact and schedule. The economic calendar is not available on MT4.

Email System

MT4 and MT5 both have the email system that can send notifications from the trading terminal. The difference is that with MT5 the email system allows sending the emails with an attachment whereas with MT4 there is no attachment functionality.

Transfer of funds

Depending on the terms and conditions of a broker, MT5 has the feature that allows transfer of funds between accounts that are within the same trade server. This is not the case with MT4. In MT4, funds transfer is handled by the broker and separate from the MetaQuotes software. Different brokers usually have different funds transfer platform. For example, FxPro uses the vault as a wallet to transfer funds while InstaForex uses the trader’s cabinet tool for funds transfer.

Inbuilt MQL5.community chat

MT5 has an inbuilt MQL5 community chat whereby traders can chat with freelance programmers of expert advisors, indicators, and scripts. With MT4 this functionality is not there. You will have to log into the MQL5 website from the browsers in order to interact with other community members.

Hedging

Hedging is whereby you open multiple positions of a similar financial instrument using same lot size. This will nullify each other, for instance having a bearish and bullish position of silver at the same time. This works with MT4 and wasn’t available in MT5 until early 2016. The latest MT5 version allows to hedge, but before 2016, if one tried to hedge on MT5, the position opened in order to hedge will automatically cancel the initial position. Hedging on MT4 still depends on the rules and regulations of the brokers. For example, U.S. brokers are not allowed to support hedging because of NFA rules.

Hedging positions on MT5

Hedging positions on MT5

Netting

Netting is a feature that is allowed in MT5 and not present in MT4. Netting works in the sense that only one position is held instead of multiple trades of the same lot size. For instance, if a trader opens two bullish positions of silver of 2 lots, then with netting this will become one position of 4 lots. This works by weighting the average price for the position.

However, after major MT5 updates in 2016 netting is no longer available in “hedge enabled” accounts and this is why programmers now love MT5 more. Netting was very inconvenient for many traders and programmers. Now order management on MT5 “hedge enabled” accounts is the same as with MT4.

Netting is no longer available in hedge enabled accounts on MT5

Netting is no longer available in hedge enabled accounts on MT5

Supported markets

MT4 has Forex, Futures, and CFD as the only supported markets, whereas the MT5 has Options, Stocks, and Bonds as additional markets. Additional markets give traders convenience of trading from the same platform and same broker. Unlike MT4, if a trader had to trade Options or Bonds, he would need to trade from another different platform or probably with another different broker.

Strategy Tester

MT4 and MT5 strategy testers are completely different. The MT4 Strategy Tester uses a single CPU thread, whereas with the MT5 the strategy tester uses multi-threads. MT5 Strategy Tester also allows testing for multiple currencies using real ticks.

Conclusion

In conclusion, though MT4 is an older version, it is not phased out and it has its advantages over the MT5. It is still popular among traders and it will likely to stay that way for quite a while. Even after MetaQuotes announced they will no longer support MT4, probably many traders and brokers will not rush to switch to MT5.

About the author

Rimantas Petrauskas

First I am a father, a husband and then the author of the book “How to Start Your Own Forex Signals Service”. I am also a Forex trader, a programmer, an entrepreneur, and the founder of ea-coder.com Forex blog. I have created two of the most popular trade copiers and other trading tools for MT4 that are already used world wide by hundreds of currency traders.

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