The trading landscape has greatly evolved over the last 15 years. Indeed, the advent of trading platforms began in the late nineties. At the time, developers were working on specialized software solutions called trading terminals. These were the early tools that surfaced and revolutionized the world of trading. The digitization of trading paved the way for the democratization of Forex. Nowadays anyone can have access to platforms and choose to trade. This accessibility and freedom might be taken for granted today, but back then, it was a turning point.
More recently, the trading platforms adapted their features to allow the introduction of digital assets. The growing popularity of cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, and the like, meant that a new audience is joining the ranks of traders and using trading platforms.
In fact, trading platforms are a trader’s workstation. While the digital aspect offers freedom to trade from anywhere in the world and at any time, the tool itself is where traders spend most of their time.
Therefore, the broker of choice and the platform they use is of vital importance to the success and effectiveness of a trader’s experience. The role of a broker is to provide different trading instruments. This means that traders can trade Forex, cryptocurrencies, indexes, shares, bonds, as well as commodities. As such, the two main tools available are MT4 and MT5 platforms. However, it’s not always clear which one is the best and what the differences are between them. In this article, we go over the features that separate these popular trading platforms.
MT4 offers traders the flexibility to trade from anywhere, this means they can use their mobile devices as well as their computers and tablets. The platform is optimized for 3 formats on both iOS and Android. In addition to that, the Webtrader platform is fully compatible with desktop terminals. All your orders can be managed across devices and the data will be displayed correctly. The independence this brings to traders is very valuable.
The MetaTrader 4 combines different trading and analytical technologies as well as additional services for traders. Those who trade Forex benefit a lot from using the platform. As such, one of its key characteristics is the ability to automate trade moves. In addition to that, a personal digital advisor from the platform can be activated to notify you about changes you may have missed. Finally, a library with all the technical indicators, scripts, and everything you need for effective trading.
Safety and data protection are very important aspects of the MT4 trading platform. Indeed, the exchange of information between traders, the terminal, and servers is encrypted with 128-bit keys. The effective security system is based on an asymmetric encryption algorithm.
You’ve heard that the trading industry is shifting towards MetaTrader 5 (MT5). So here’s the breakdown of the platform’s features and those that differentiate it from its successful predecessor, the MT4.
- Hedging allowed
- No FIFO rule
- Fundamental calendar integrated
- Commerce Integration
- Improved charting and time frames
- Exclusive first-class indicators
- Multiple market order ability
Traders get more options because they are no longer restricted by built-in analytical resources. The high-performance programming language MQL5 allows traders to design their own technical indicators. This simple method of coding brings forth the age of trading automation and Expert Advisors known as trading robots. Thus traders can digitize the implementation of strategies according to various inputs. Consequently, they can obtain highly accurate market analyses and forecasts.
Hedging and Enhanced Capabilities
Similar to its predecessor, MT5 allows hedging. This feature enables traders to conduct multiple trades even in the opposite direction. In addition to this, Metatrader 5 has enhanced order management capabilities. Therefore if a trader has an open position at a symbol and does a new deal, a new position is automatically opened. That’s the main idea behind the MT5 hedging system. Of course, traders can then set stop-loss and take-profit levels for each position.
Opening up to new audiences, the MetaTrader 5 is a multimarket platform. This means that you can trade both in centralized and non-centralized markets.
Tick History Download
In Metatrader 4, traders can save tick data manually. While available, this process still has many limitations. Thus making it very difficult to figure out what the most traded price or cluster in a selected range was. However, in the Metatrader 5, traders can download and consult real tick history as well as real volume-traded data directly from the broker. This is considered an advantage, especially to those who practice backtesting.
There is no objective answer to which of the MT4 or MT5 is better. The real question is: which trading platform is best suited for you? After reading the above comparison between the two solutions, you can decide the answer according to your own needs. If you need to do backtesting offline or would like to access stock and commodities exchanges that are tricky to reach via MT4, then perhaps Metatrader 5 is the right choice for you.
Otherwise, the Metatrader 4 remains a tried-and-true trading platform that is still more popular than MT5. Technically there may be small differences between the two versions and added features in the newest platform. Nevertheless, there is no clear-cut advantage to either. Basically, the MT5 was created to cater to new markets and audiences in the trading industry.
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