The MT4 vs MT5 – What you need to know

The forex market is one of the largest financial entities in the world, and one that sees an estimated $6.6 billion traded globally every single day. However, the way in which investors access the market has changed markedly during the digital age, with brokerage firms now established as online platforms that facilitate orders virtually.

At the heart of online trading is two connected platforms; namely the MetaTrader 4 and the MetaTrader 5. But what exactly are these platforms, and why have they come to dominate the forex marketplace?

General Risk Warning: 74–89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Exploring the MT4 and the MT5 – What do You Need to Know?

Both of these platforms have been developed and written by the Cyprus-based MetaQuotes Software Corporation, with the MT4 being released back in 2005 and its successor hitting the market in 2020. In the case of the MetaTrader 4, this platform has emerged as the standard-bearer for forex traders across the globe, having been primarily designed for the trading of derivatives and CFDs. The popularity of this platform is reflected by the fact that it’s offered by a vast range of forex brokerage sites, while this app also broke the mould in terms of the analytical tools that it offers to traders and its capacity for customisation.

The MT4 is also renowned for its intuitive nature and ease of use, and these are qualities that it shares to some degree with its successor. However, despite being marketed as an upgraded app when it was launched in 2010, it remains much less popular than the MT4 and continues to be far less widely used (we’ll touch more on this later in the piece). However, you can still access the MT5 through some online brokers, while it’s interesting to note that this platform complies with the US FIFI “no hedging” rule. This means that it naturally lends itself to the activities of North American traders, but less relevant to those in Europe and the UK. This at least partially explains its lack of popularity amongst UK traders, who continue to favour the MT4 as a general rule.

What Else Sets the MT4 Apart?

While we’ve already touched on the fact that both platforms are relatively intuitive, it cannot be argued that the design and single-minded nature of the MT4 makes it particularly easy for forex traders to use. Conversely, the MT5 boasts a wider range of trading options and actively empowers users to access assets such as futures and stocks, creating a slightly more complex layout that takes a little more time to navigate.

This is one of the key drivers of the MT4’s popularity amongst forex traders of all descriptions, particularly when you also consider its customisable nature and the fact that it provides technical indicators that are ideal for identifying forex trends. Of course, the capacity for customisation also enables MT4 traders to tailor how charts and data are presented visually, which underlines the platform’s core of ease of use and its deserved reputation for excellence amongst forex traders.

So, while it would have been hard to envisage the popularity of the MT4 when it was launched in 2005, it remains the forex trader’s tool of choice throughout the UK and Europe.

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Mathematician and physicist, Winner of Nobel Prize in Physics