MT4 vs MT5: Key Differences and Similarities Explained (2024)

1. While MetaTrader 4 (MT4) and MetaTrader 5 (MT5) share a core feature set and mobile trading apps with full functionality, MT5 sets itself apart by offering a wider array of tradable financial assets well beyond forex including stocks, futures, and bonds.
2. MT5 also provides more advanced charting, broader technical indicators, faster backtesting capabilities, and enhanced automation better suited for complex strategies.
3. MT4 retains the advantage of simplicity and intuitiveness catering well to beginner traders. Both platforms receive widespread broker support so traders can choose their preferred platform based on individual priorities around assets, tools, and ease of use.

MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are the world’s most dominant retail foreign exchange (forex) trading platforms. They are offered by most forex brokers and widely used by traders.

MT4 was originally released in 2005 by MetaQuotes Software for forex trading on the spot market. For many years, it has been the industry standard and go-to platform for retail traders. MT4 focused specifically on forex trading and contract for differences (CFDs) on major currency pairs.

MT5 entered the market in 2010 as the next generation platform designed to expand beyond just forex trading. In addition to forex and CFDs, MT5 supports exchange-traded stocks, futures contracts, bonds, and other assets. This diversification allows for wider market access within a single platform.

Both platforms were engineered to facilitate technical analysis, algorithmic trading, Expert Advisors (EAs), and copy trading. They aim to provide traders with advanced tools for executing trading strategies, automated trading bots, and signal services to support informed trading decisions.

The core purpose behind each platform is similar — to enable individual retail traders to effectively analyze the markets and execute trades through their brokerage accounts. MT5 built on MT4’s existing foundation with an expanded set of tradable instruments.

Trading Instruments

A key difference between the two platforms lies in the range of financial instruments available for trading.

MT4 focuses specifically on spot forex and CFD trading on major currency pairs (EUR/USD, GBP/USD etc.), global stock market indices (S&P 500, FTSE 100 etc.), commodities like gold and oil, and some cryptocurrency crosses.

MT5 significantly expanded the scope of tradable instruments beyond MT4’s offerings. In addition to all the assets available on MT4, MT5 also supports:

• Exchange-traded stocks (Apple, Tesla, etc.)
• Stock market futures (E-mini S&P 500, VIX etc.)
• Government bonds and treasury notes
• Cryptocurrency CFDs in addition to crosses

This gives MT5 traders more variety and opportunities for diversification or speculation within a single platform, without needing to use other trading platforms or brokers.

The wider range of instruments caters well to traders seeking expanded access beyond just forex. It also suits algorithmic traders who want to run EAs across multiple asset classes. MT5 provides that flexibility and convenience within an integrated charting and analytic framework.

Automated Trading

Both platforms support automated trading through Expert Advisors (EAs), custom indicators, and algorithmic strategies. However, MT5 comes with several enhancements for running advanced automated trades.

MT5 introduced the concept of Depth of Market (DOM) which provides traders instant access to the current bid/ask spreads, market liquidity, and volumes on currency pairs and instruments. This information facilitates building EAs that factor in live market depth analytics.

The MetaEditor on MT5 also makes EA programming easier with predefined code templates, integrated debugging tools with runtime errors notification, and an overall more robust coding environment.

Some other notable improvements:

• More complex conditional order types based on market events
• New block orders for stop losses and take profits
• Advanced risk management for automated strategies
• Automatic adjustment of stop levels when volatility changes

For quants and programmers, MT5 provides increased flexibility to deploy complex automated trading systems and algorithms. The platform effectively handles EA management, while providing the market data needed to optimize automated trades.

The integrated strategy tester also helps extensively backtest EAs across various market conditions over longer timeframes. This allows fine-tuning EAs to be more reliable in live markets.

Overall, MT5 comes packed with better tools for running EAs scalably and efficiently.

When MT5 was developed, MetaQuotes focused extensively on enhancing some core technological elements lacking in MT4:

Speed — MT5 was built on a newer, optimized codebase to significantly improve execution speeds, both in testing and live trading. Strategies compile faster with MT5’s new MetaEditor. The testing process is very quick which helps traders validate strategies rapidly.

Flexibility — Switching from MQL4 to MQL5 gave much more flexibility in designing complex trading systems. MQL5 adopted object-oriented programming for much cleaner code implementation. It made the language more flexible for quants.

Charting — MT5 revamped charting capabilities with the ability to load more bars and tick data over any timeframe without lag or delay. MT4 charting could slow down while applying multiple indicators. MT5 resolved this.

Multi-asset — As highlighted earlier, MT5’s framework supports seamless integration of different asset classes like futures, bonds, and stocks that expand beyond FX and CFDs.

Analytics — The newer platform offers 80+ advanced technical indicators (vs 30 on MT4) for deeper price and volatility analytics to inform trading strategies. An economic calendar is also nicely integrated providing news/event signals.

Functionality — Useful features like one-click trading directly from charts simplified trade execution. Other handy functions were added like an integrated Market tab for monitoring instruments, pending orders visible on charts, free historical data on symbols etc.

Overall, MetaQuotes focused MT5 development around addressing some of the bottlenecks experienced by advanced MT4 users at the time. The end outcome was a faster, cleaner, and more flexible platform.

Ease of Use

One widely held view is that MT4 provides a simpler user experience, especially for new forex traders. The toolsets and menus are relatively basic and easy to grasp compared to MT5’s more sophisticated interface.

As a dedicated forex trading platform, MT4 remains focused specifically on currency pairs and CFDs. The workflows are optimized just for these assets. So traders find it intuitive even with little trading knowledge beforehand.

The learning curve is undoubtedly steeper on MT5 with more features and analytical tools layered throughout the platform. New users can get overwhelmed initially by the greater complexity that caters more toward technical traders.

Even experienced MT4 traders who may consider migrating to MT5 face some challenges adjusting to an unfamiliar workspace and charts setup. Replicating their old MT4 strategies on MT5 takes some work. The MQL4 to MQL5 transition also creates programming hurdles for coders as the languages differ.

So MT4 certainly appears better suited for beginners, while MT4 provides more upside for advanced manual and automated trading — albeit with a learning curve.

Analysis Tools

The integrated MetaTrader platforms provide charting and analysis tools directly built-in for convenience. MT5 however edges out MT4 in the depth of analytics available.

Added technical indicators in MT5 like Klinger Oscillator, Accelerator/Decelerator, Alligator, Fractals etc. provide traders more insight into momentum, support/resistance levels, trend swings and reversals. More choice benefits complex strategies.

MT5’s strategy tester also analyzes trades more deeply by incorporating actual historical spread and liquidity conditions to simulate close-to-real results. This provides greater reliability.

For quants and EAs developers, MQL5 delivers execution speed improvements for indicators. Combined with new Object-Oriented code structures, it facilitates cleaner implementation of complex algorithms.

So while MT4 covers basics well, MT5 better equips manual and automated traders alike with more indicators, faster backtesting, superior analytics, and an improved programming framework.

Testing and Optimization

One area where MT5 really shines over MT4 is strategy testing and optimization. The integrated tools give traders immense capabilities to build, test, and refine strategies under different market conditions.

The testing suite on MT5 allows traders to assess strategy performance across a wide range of historical data with variable trading conditions including:

• Different market instruments
• Longer testing timeframes (up to years)
• Various periods (trending, sideways, volatile)
• Changing liquidity and spreads

This flexibility helps evaluate strategy robustness and consistency across stocks, futures etc. — not just forex pairs.

The visual Strategy Tester interface makes it very simple to set up different testing scenarios and parameters. Results can be filtered on metrics like profit factor, drawdowns, sharpe ratio etc for quick analysis.

MT5 also provides one-click optimization for input values like indicators, risk ratios, stop loss, take profit etc. to create variations. This simplifies fine-tuning strategies for improved performance without manual coding.

The advanced backtest capabilities combined with simplified optimization delivers a strong framework for developing reliable automated systems — from EAs to complex neural networks.

Through robust out-of-sample testing on historical data, MT5 gives traders added confidence to deploy strategies in live market conditions. This extensive evaluation capability is a major differentiator from MT4 for quants.

Given its long legacy status, the MetaTrader 4 terminal still dominates the industry landscape even 10+ years after MT5’s release.

MT4’s user base spans millions of retail traders globally based on its first-mover advantage and having more than 15 years to build adoption since 2005. Multiple generations of traders have used MT4 for learning and trading over the years to establish its place.

However, MT5 adoption has gradually kept rising as brokers expand support and advanced traders migrate for more features. Most major brokers today provide both MT4 and MT5 access to let clients choose the better fit for their needs.

So traders now have the flexibility to opt for either continuity of their familiar MT4 workspace, or upgrade to MT5’s advanced offerings for stocks, futures etc. This caters to different trader types within the same brokerage.

Providing dual platforms does create some tech overhead for brokers in maintaining infrastructure, operations and liquidity for both. But the user choice and appeal for technical traders makes it an essential offering.

As MT5 adoption expands further, we can expect more traders to switch over despite the transition cost and learning curve based on the tangible platform benefits for automation and diversification.

Mobile Trading

MetaTrader also offers free mobile applications on iOS and Android devices enabling traders to execute trades while on the go.

The MT4 and MT5 mobile apps provide full charts, analysis, trade orders, and account management functions identical to the desktop experience. Real-time push notifications on price alerts or new trade orders also help traders monitor positions.

Between the two apps, MT5 mobile has a slight edge in terms of navigation and utilities based on its newer framework. But MT4 mobile also delivers core trading capabilities reliably across devices.

The ability to run automated strategies or copy signals while travelling without laptop access has made mobile solutions vital for active traders and investors. Both apps achieve that to maintain access and portability.

For traders considering whether to stick with MT4 or migrate to MT5, there are some key factors to weigh when making the decision:

Stay With MT4 If:

• You are an active forex trader and happy with your current MT4 setup and strategies
• Employ simple trading strategies and EAs on currency pairs and global indices
• Prefer to retain platform familiarity and avoid MT5’s learning curve
• No need for trading other assets besides spot forex and CFDs

Switch to MT5 If:

• You wish to expand trading beyond just forex into stocks, futures etc. within the same platform
• Utilize complex algorithmic trading strategies and custom indicators
• Seek more advanced analytical tools, faster backtesting and optimized strategy building
• Want latest technology updates and mobile trading enhancements

MT4 and MT5 share the same developer, many similar features, and broker support. But MT5 differentiates itself on technology, advanced analytics, automated trading, mobile apps, and multi-asset access.

MT4 remains simple and deeply entrenched. But MT5 presents a compelling case for traders wanting sophistication and diversity of instruments.

Brokers now universally support both to leave the choice to clients based on individual preferences. MT4 will likely retain majority market share but MT5 adoption is steadily rising.

For quants and forex traders wanting expanded access within a high-powered platform, MT5 is clearly the way forward.