Trading forex usually involves signing up to a platform, adding money into your account, and then using the given trading software to buy and sell currencies.
Many of the most reputable platforms in the world offer MetaTrader 4 or MetaTrader 5 as the software options for buying and selling in the forex market. Even if you’ve read a little bit about these programs, you may be unsure about which one to choose.
Both trading platforms enable you to trade forex, but the nuances of each may not be apparent to someone who is starting out in this sector.
Below is an outline of the pros and cons of MetaTrader 4 and MetaTrader 5, along with an analysis of which software may be the best option in your circumstances.
MetaTrader 4 is a forex trading platform that first launched in 2005 and is offered by nearly every major forex broker in the world. If you’re assessing a website for its suitability for trading forex, it’s a significant red flag if it’s not offering MetaTrader 4.
Most experts agree that even though more advanced and feature-filled software does exist, MetaTrader 4 is still the industry gold standard. It’s an extremely easy-to-use, versatile, and popular platform. Security on MetaTrader 4 is also state of the art, despite it being almost 20 years old as a program.
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In comparison, MetaTrader 5 launched five years later in 2010. Even though it does have many overlapping features with MetaTrader 4, its popularity is not quite on the same level.
Most reputable forex brokers do offer MetaTrader 5, but there are many sites where you only have the option of using MetaTrader 4. One factor to remember is that MetaTrader 5 does comply with the United State’s “no hedging” rule with respect to forex, which means that this program may be more suited to traders based in America.
The name MetaTrader 5 may lead people to think that it’s merely an updated version of MetaTrader 4, but that’s not the case. Despite the similar names, MetaTrader 5 is an entirely unique program that was designed to trade markets beyond forex in a centralized manner.
MetaTrader 5 facilitates trading stocks, commodities, futures, and options, along with regular forex trading.
MetaTrader 4 uses the MQL4 language for its code, while MetaTrader 5 uses MLQ 5. You only have the option of slow single backtesting in MetaTrader 4, while fast multiple backtesting is possible on MetaTrader 5.
While there is no technical support available for MetaTrader 4, there is a huge community of forex traders around the planet that use the program daily. If you do run into issues, finding the solutions online is fairly easy. In contrast, MetaTrader 5 does provide technical support, and it also supports more time frames compared with MetaTrader 4.
As you trade forex during market hours around the world, you may want to engage in many trades simultaneously. MetaTrader 4 has four types of pending orders, while MetaTrader 5 provides six types.
Another difference between the programs is that MetaTrader 4 does not show any depth of market data, while such DOM data is available as part of MetaTrader 5. You can also check the economic calendar on MetaTrader 5 for relevant information as you are trading, while you would have to find a separate source for such information if you use MetaTrader 4.