One of the essential steps the trader needs to take when starting to trade forex is choosing the right trading platform. It can be either MetaTrader 4 or MetaTrader 5. Earlier, the traders would typically opt for the first one.
Today, however, the customers of an increasing number of brokers have the freedom of choice. You can download MT5 along with the regular, fourth version of the trading terminal on the trading websites. In our overview, we are going to throw light on the difference between these trading platforms and discuss whether it makes sense to switch to the new terminal.
1. MT5 is unlocking new opportunities for traders
2. Extended features in MT5
3. The Depth of Market: one of the differences between MT4 and MT5
4. New features for creating Expert Advisors with MT5
5. MT4 or MT5: Which one is better for trading?
For starters, it is important to note that MT5 is a trading terminal with a higher operating speed. This is a full-fledged 64-bit multi-threaded platform. In contrast, the previous MetaTrader version remains 32-bit single-threaded with a memory size of 2GB. If you install MT4 on a 64-bit OS, the amount of memory increases to 4GB.
In order to install the terminal (you can download MetaTrader 4 on the website of your brokerage company), you do not necessarily need a 64-bit OS. Many traders note that it can run well on 32-bit OS too.
What does this mean for traders? MT5 operates smoothly, quickly, and efficiently if you trade with a VPS server. Meanwhile, MT4 is not quite fit for these purposes due to its slow operation speed.
Aside from that, MetaTrader 4 uses one server only, while MT5 uses chiefly four: one for trading, one for history, one for access, and one for backup.
In addition, MetaTrader 5 has enhanced capabilities for reporting, while in MT4 reports are produced in HTML only. In contrast, MT5 offers the Open XML format as well.
Traders who are using trading indicators are aware that there are 30 indicators available in the standard MT4 panel. It also offers 33 analytical objects. In MT5, the number of indicators has been increased to 38. This, in turn, gives more room for creating trading strategies and performing better market analysis.
In the new version of the trading platform, developers increased the number of pending orders. Aside from market execution orders in MT4, you could open four pending orders i.e:
Today, if you decide to download and use MT5, you can open additional pending deals with buy stop limit and sell stop limit orders.
On top of that, to make traders’ work even easier and more efficient, MT5 offers a wide range of information services designed for market analysis. A tab with an economic calendar where you can learn about all essential events directly from the trading terminal was made available.
Plus, there are news section and data on when and what is going to be sold in the stock exchange.
As far as the tools designed for price chart analysis are concerned, their number in MT5 was increased to 44, enabling traders to draw levels, channels, use Fibonacci and Gann tools, support and resistance indicators, and even a template for wave analysis. MT4 has 31 tools available only.
In terms of order opening and execution, the updated version of the MetaTrader also has enhanced features. Traders can use partial orders and partial editing, as well as cancel out the remaining position volume.
It should also be mentioned that the number of timeframes was also expanded in the MT5 platform. On the one hand, it may seem like an insignificant advantage. On the flip side, however, the expansion of the technical capabilities of the trading terminal provides more information for analysis.
In the fifth version of the platform, the traders get their hands on the 2M, 3M, 4M, 6M, and 10M timeframes. Aside from that, M12 and M20, 2H, 3H, 4H, 6H, 8H, and 12H time frames are available as well. Those who had to choose between making technical analysis on H1 and H4 know well how much an intermediate time frame was needed.
There is another new thing in MT5. This is the Depth of Market or DoM tool. Previously, it could be found in trading terminals designed for trading in stock and commodity exchanges. However, it used to be unavailable for forex traders and when trading CFDs on stocks, metals, and commodities.
Now, you can check out the table with bids and asks for a particular instrument, as well as the full range of available prices which are displayed in a separate window in the MT5 terminal. This provides traders with additional information for analysis and helps make the right trading decision.
Those traders who create their own indicators can now write Expert Advisors for MT5 using the MQL5 programming language, the functionality of which has been improved as compared to MQL4.
Coding and developing trading robots that can trade automatically based on your own trading strategies has now become easier and faster too. The trading system that has proven to be effective and profitable can be switched to an automatic mode which is going to save time previously spent on trading.
We have examined the key differences between MT5 and the previously very popular fourth version of the MetaTrader trading terminal. Obviously, there are a lot of other features. However, the main difference between the terminals lies in the details.
There is no fundamental difference between trading platforms. This means that every trader, even a newbie who has figured out how MT4 works can easily switch to MT5 without experiencing any major difficulties.
That being said, there are aspects relating to trading strategies which should be factored in after you switch to the new platform. E.g. A hedging option is available in MT5 but there is no possibility to lock positions which may pose certain difficulties if you are used to averaging or pyramid strategies for position accumulation.
To sum up, let’s go through the key innovations in MetaTrader 5 once again so that you can draw your own conclusions and choose the platform that suits your needs best. So, here’s what MetaTrader 5 offers:
An increasing number of traders are switching to MT5. Gerchik & Co customers are no exception to this. You can download MT5 both in the personal account and on the company's website.