Things You Need to Know About Choosing Between MT4 and MT5

Things You Need to Know About Choosing Between MT4 and MT5

Things You Need to Know About Choosing Between MT4 and MT5

If you trade forex, you are likely at least somewhat familiar with the MetaTrader 4 and MetaTrader 5 systems. Because of the usefulness of its tools and resources for assessing positions and taking action, these software solutions are among the most widely used trading platforms for a variety of traders and advisors. 

The truth is that these two solutions offer various features and functionalities that cater to various trading audiences, even though their names can give the impression that MT5 is simply an updated version of MT4. Your history and trading objectives, among other things, will influence whether you choose to utilize MT4 or MT5. 

Have no idea which platform to use? Journey with us as this article discusses all you need to know about these platforms and other valuable information. 

What is MetaTrader 4?

Most online traders utilize MetaTrader 4, which is the most popular platform for trading forex. Since its 2005 release, it has made the financial markets accessible to millions of individuals. MT4 pc was designed particularly for forex trading, but it may also be used to trade other assets via Contract for Difference (CFD), including stocks, indices, and commodities. 

Because of MT4’s versatility, user-friendliness, and ability to be customized to the needs of the user, both novice and seasoned traders value it. Additionally, it provides sophisticated trading tools that let traders use their tactical approaches. 

What is MetaTrader 5?

The multi-asset trading platform MetaTrader 5 was introduced in 2010. Although MT5 is quicker and more effective than MT4, it doesn’t replace the earlier platform because it is unique and simply provides more than MT4 does. Thanks to Metatrader 5 pc, nearly all financial markets, including those for forex, equities, indices, commodities, and even cryptocurrencies, may be traded using more instrumentsus 

All the instruments required for profitable trading are available with MT5: sophisticated technical and basic analysis, trading signals, algorithmic and copy trading, as well as trading robots.  

MetaTrader 4 versus MetaTrader 5

Types of assets you are trading

The main distinction between MT4 and MT5 is the type of traders each platform tends to attract. The features and functionality of MT4 are in line with the fact that it was created exclusively for Forex traders. Because of this, traders who are primarily interested in the forex market use the MT4 software platform. 

Trading of stocks, futures, and contracts for difference (CFD) can all be done using MT5. It has a wider range of features as a result, which may not be important to every trader. However, if you trade a variety of assets, it might be more beneficial for your trading objectives. While you can utilize MT5 to trade forex, keep in mind that the features and tools required to examine forex charts aren’t as powerful, so performance will probably suffer while using MT5 for this type of trading. 

Open entry to the FIX API

The Financial Information eXchange (FIX) API is a valuable resource for traders looking for real-time financial securities information. Market regulators and traders utilize the FIX API to share critical information before and after deals, as well as data confirming new orders and completed trades. 

Traders profit from FIX API integration in a variety of ways. Most significantly, when trading on a platform with a FIX API connection, traders have more access to financial information, and the layout of this information is standardized to ease interactions across any language boundaries. The FIX API also facilitates the development of black-box methods or proprietary algorithms to aid in forex trading analysis. 

You must use the MT4 trading platform to access the FIX API. However, MT5 does not support FIX API integration. 

Programming Language

MT4 and MT5 each employ their own unique programming language, which enables varied trading features and modifications depending on your trading needs. With MT4, however, there is a larger assumption that traders will be looking for a platform that can be swiftly installed and launched, with minimal steps required to set up functionality or establish a trading program. 

This makes MT4 suitable for new or inexperienced traders, as well as those who do not want to develop their own scripts or algorithms to assist their trading plan. MT5, on the other hand, has a more difficult programming language, but it also allows you to write and modify scripts. 

Unlike the user experience provided by MT4, transactions on MT5 can also be conducted with a single function. 

Netting and hedging

Hedging is a risk management approach in which you open a position opposite to your present position to counter any potential losses. Netting, on the other hand, is the practice of lowering financial risks in contracts by merging multiple financial responsibilities to arrive at a net obligation amount. 

You can hedge your trades with MT4 to protect yourself from any losses. In any case, MT5 allows you to hedge and net your trades, shielding you from any losses and lowering your financial risks.