Notes

MetaTrader 4 or MetaTrader 5? A Guide for New Online Traders


If you start trading and investing online, whether that's experimenting with buying some stocks or crypto for the first time or fancy trying your hand at some real trading of stocks, forex, and commodities, sooner or later, you will come across MetaTrader 4 (MT4) and MetaTrader 5 (MT5). fxcm markets They are trading platforms; software packages that allow traders to execute their trades. These platforms are usually accessible through an online broker platform.





MT4 or MT5 is not the only trading platform available. There are many others, but MT4 and MT5 remain the most popular amongst both retail and professional traders. MetaTrader 5 was supposed to be the successor of MetaTrader 4. You might think that it is like choosing between an iPhone 14 or an iPhone 15; an upgrade. Yet, it is not just that simple. A better way of thinking about it is that the two platforms have different target markets, designs, and features. The short answer is that neither platform is objectively superior to the other.

Trading Platforms Overview
The fintech revolution of the 2000s saw a mass movement of trading activity online. Online brokers began to offer services for both retail and professional traders. These brokers used to offer their clients their proprietary trading platforms, many of which still exist. Platforms are software suites that allow traders to access charts, data and educational resources.

MetaTrader, first released by MetaQuotes Software back in 2002. It went through several versions before MT4 was released. By the late 2000s, many online brokers added MT4 to their platforms due to its popularity and the fact that it had a keen focus on algorithmic trading. MT5 launched in 2009. It, too, was hugely popular, and it was picked up by brokers. Almost all major brokerages will offer MT4 as well as MT5.

From the above, you will note that MT4 is almost two decades old (predating the iPhone) and MT5 is 15 years old. But it's important to note that they are not clunky old software packages; they have evolved in that time through updates from MetaQuotes Software and third-party developers through open-source architecture. MetaTrader 6 is not yet available for a number of reasons.


MetaTrader 4
As mentioned, MT4 was released in 2005 and soon became the world's most popular trading platform. It held that title for many years. However, in 2021, MT5 overtook it as far as the number of brokers that offered it. MT4's main focus is forex trading, and it was designed for that purpose. It is also a superb choice for those who wish to trade CFDs (contract for difference). With MT4, you can trade commodities, metals and energy assets as well as indices. It is easy to use and is popular with those who prefer automated or algorithmic trading. One of the key attractions is MT4's vast community, which has been built over the years through millions of users.

MetaTrader 5
MT5 is, in a nutshell, broader in terms of scope and tools than MT4. On the surface, using MT5 is just as easy as MT4. Both platforms have a similar UX. MT5 offers a broader choice of assets, with stock trading a particular highlight that is lacking on MT4. More charts and chart drawing tools, built-in and customisable indicators than MT4, and it has more advanced order types and execution models. It is, as such, an upgrade on MT4. Although, as we shall argue below, that does not mean it is objectively better. MetaQuotes is also more focused on updating MT5 compared to its predecessor.



The Community Aspect
We mentioned MT4's community earlier, and that is the difference-maker for many traders. When we talk of community, we mean the body of traders, fintech programmers, and other experts that maintain that enrich and inform the trading experience. Each platform uses a different programming languages (MQL4 or MQL5). While The MQL5 community is also vast, the MQL4 community is larger and more established. MT4 is more popular because of the support it receives from users and third party programmers. The resources, such as trading ideas, technical support, etc., can be invaluable for any trader.

Which Is Better?
As we said, there is no objectively better platform. MT5 has more features and a broader range of asset classes to choose from, but MT4 has certain elements that distinguish it, notably its focus on the multi-trillion-dollar forex markets and the support of a more established community. Overall, we would say that MT4 is a better option for new forex traders, whereas MT5 is superior for those who are more experienced. Most of the best online brokers offer both free to their new clients. Moreover, you can practice on both MT4 and MT5 with a demo account before making a decision as to which you'd like to use for your primary trading account.


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