If you have been planning to start your very own forex brokerage for sometime now, one question which must have definitely come to your mind is whether you should use MT4 or MT5. While the names might look similar, a common misconception within the industry is that MT5 is just an upgrade to the previous MT4. However, this is not the case.
To be very specific, both platforms allow traders to trade on the global forex market, and each of them arrives with a wide range of functionalities; however, they both serve very different purposes. While the MT4 platform has mainly been constructed to give traders access to the global forex market, the MT5 platform is an upgrade, and it lets traders access financial instruments such as CFD, futures, and stocks.
But there is more difference between these two platforms than meet the eye, and in today’s article, we will explore exactly that and help you understand which platform would be better suited for your needs. Without further ado, let’s get started.
One of the first and most important aspects we need to understand before we dive into the differences between the platforms is their essential definitions.
In simple terms, MT4 or MetaTrader 4 is an electronic trading platform first launched in 2005, and it allows forex brokers to participate in the global forex market. It is one of the most popular trading platforms within the community and is offered by most brokers around the world. The MT4 platform arrives with Expert Advice, Trading Signals, Mobile Trading, and the Market section, all of which are integral components of the platform and are designed to enrich the experience of the modern trader.
On the other hand, MT5 is also a trading platform for forex traders; however, it was specifically designed to allow traders to access futures, stocks, CFDs alongside the regular forex financial instruments. The MT5 platform was launched in 2010, and contrary to popular belief, it is not an upgrade to the MT4 platform. Till date, it is offered by very few brokers as compared to the MT4 platform, and one of the specialties of this platform is the fact that it complies with the US FIFO (First In, First Out) policy and thus suits the widely popular no hedging rule.
Additionally, one of the main specialties of the MT5 platform can be found in its design and functionality, which allows traders to trade in commodities, options, stocks, and futures, all of which are inaccessible through the MT4 platform.
Thus, in a way, it can be understood that the MT4 platform is much more preferred by traders outside of the US, while the MT5 platform is more popular among US traders due to its underlying compliances.
Key Differences Between MT4 and MT5
Now that you know the basic definition of the MT4 and MT5 platforms shared, below is the list of key differences between them.
|Partial Order Filling Policies
|Order Fill Policy
|Fill or Kill
|Fill or Kill Immediate or Cancel, Return
|Pending Order Types
|Depth of Market
|Times & Sales ( Exchange Data )
|Transfer Funds Between Accounts
|Embedded MQL5 Community Chat
|Multi-threaded + Multicurrency + Real ticks
|Symbols / Securities
|FOREX / Futures / Options / Stocks / Bonds
Now that we understand the key differences between the MT4 and MT5 platforms let us understand the two major differences in detail.
- The MetaTrader 5 platform uses a language architecture known as MQL5, which allows for a feature known as black box programming. In simple terms, black box programming is a feature which allows developers and users to create more advanced robot traders, which are also known as Expert Advisors, and ensure that they run smoothly on the platform.
- Along with this, developers and users who work with MT5 have also noted that MQL5 is much easier to learn, use and program, thus adding to its charm and user experience.
- However, in 2014, MetaQuotes extended the black box programming feature to the MT4 platform as well, but it is not sure if there will be any future upgrades. Thus, if you are planning on creating expert advisors, MT5 will be a better choice due to the presence of programmable features.
- Along with this, it should also be noted that the MQL5 language doesn't feature any backward compatibility, meaning that a feature which was programmed in MT5 might not run in MT4. Additionally, since the pace of backtesting is slower in MT4, you might consider using the MT5 platform, especially if you are someone who needs to run multi-pair currency backtests at the same time.
Conclusion: Which One Should You Choose?
After understanding all the differences between both the platforms, the decision of choosing one over the other, comes down to your needs. If your brokerage serves traders outside of the US and do not require fast backtesting and programmable features, along with being able to trade with no technical support from the developer, go with the MT4 platform.
On the other hand, if your brokerage serves traders who need constant technical support, requires fast backtesting capabilities, designs and creates expert advisors, and resides within the US, then choose the MT5 platform.
The facts are in front of you; all you need to do is make a choice and along the way, if you come across any trouble, make sure you reach out to us at Starting Brokerage, and our team of experts will be more than happy to assist you along every step of the way.