The forex market has seen the creation of many trading platforms. However, the MT4 trading platform continues to stand out amongst the rest. This article looks at the reasons why MT4 is better than MT5.
Evolution in technology and innovation has birthed a paradigm shift in trading the foreign exchange market, especially when it comes to the various trading platforms that are available to traders. Although, it should be noted that this choice of a trading platform is directly linked to the type of forex broker involved, as not all trading platforms are a “one-size-fits-all” type of platform.
However, the MetaTrader 4 platform –or the MT4 platform— has come to redefine the concept of forex and CFD trading in recent times. Due to the widespread fame of this trading software, MT4 has become a favorable substitute for the in-house developed platforms of many forex brokers. Although buying the license from MetaQuotes —the Russian developer of the software— is quite expensive, it is better to find the company’s authorized provider such as MTrading broker.
MetaQuotes has provided two online trading platforms for forex brokers —MT4 and MT5. The MT4 is commonplace amongst traders and provides ease of trading through its compatibility with both desktop and mobile devices.
The MT4 allows traders to follow the price fluctuations of instruments in real-time. It also enables the trader to analyze charts across different time frames, among a host of other features.
The MT5, on the other hand, was developed five years after the MT4. It encompasses certain additional features, although these features are not available to traders that engage the MT4 platform. The MT5 gives the traders the leverage to use 38 technical indicators and 44 graphical objects that ensure accurate technical analysis.
These two platforms may pose a difficulty for the trader when it boils down to choosing the most suitable platform. Therefore, this article seeks to highlight some of the reasons why MT4 is a more suitable platform for trading than MT5.
The Differences between MT4 and MT5
- The use of each platform
One of the biggest differences between the two platforms is the traders each platform attracts. Therefore, while MT4 was designed towards the needs of the traders –with its features and functionality also tailored towards this— the MT5 features a wider range of applications, including contract-for-difference (CFD), stock, and futures trading. Thus, the features imply that they may not be functional for a trader unless such a trader is trading various types of assets at the same time. Further, the MT5 does not allow for robust technical analysis as its predecessor does, thereby sacrificing performance when you use the MT5.
- The FIX API
Another important difference between the two platforms lies in the Financial Information Exchange (FIX) API. This is a vital tool for traders on any trading platform, as it gives the traders real-time information related to several financial securities. This API serves both market regulators and traders as a means of sharing crucial information before and after certain trades and even provides information that certifies new orders and executed orders.
The FIX API further allows traders to initiate private algorithms that assist in forex traders’ analysis. But for you to access this feature, a trader must use the MT4 instead of the MT5. This is another crucial feature of the MT4 that has made various web trader platforms stay loyal to it.
- Time Frames
An additional feature is that the MT4 was built with simplicity as the end goal.
This aids beginners in the forex market, who don’t need to be burdened with complex time frame data. The MT4 allows traders to choose nine different time frames when such traders conduct analysis. On the other hand, the MT5 offers 21 different time frames which —to many customers—are quite unnecessary.
- Number of Order Types
Also, the MT4 offers the four basic order types: buy stop, sell stop, buy limit and sell limit. These orders are quite sufficient for the average trader in executing any strategy that minimizes risk and helps the trader to gain control and entry and exit positions in the market.
- Programming Language
Further, each platform possesses its individual programming language, which provides distinct trading abilities and customizations, in line with each trader’s needs. MT4 is better than its successor because it was built with the assumption that traders need a platform that can be quickly installed and launched, needing minimal fuss about setting up its functionality. This makes the MT4 ideal for beginners.
MT5, on the other hand, has a more complex programming language.
Further, the MT4 takes up less space than the MT5 does. This is one selling point that has made traders very familiar with and loyal to the trading platform.
Also, unlike MT5, the MT4 allows nearly all kinds of trading methods, including hedging and LIFO (Last In First Out). Also, the Expert Advisors (EA) on the MT4 platform make it more suitable for traders. This is in addition to the very crucial fact that the programming codes of both MT4 and MT5 are not compatible.
Therefore, most traders that are already used to MT4 cannot transfer their customized accounts to MT5.
Picking out the best online trading platform —whether you’re a beginner or a seasoned trader— is a no-brainer! MT4 offers the simplicity and functionality that every trader requires, with extra fluff that makes the whole idea of trading seemingly complex and difficult to comprehend.