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MetaTrader 4 vs 5: Which One? [2020 Review]
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IlseM4n
3 years ago
Because Metatrader 5 was released in 2010, five years after the release of Metatrader 4 and at a time when Metatrader 4 was already very popular, and due also to the number sequence in the platform names, there is a common misapprehension that Metatrader 5 was a new improved version of Metatrader 4, designed to do the same job better. This is not really true at all, although it is a trading platform and backtesting machine just as Metatrader 4 is, and the graphical user interfaces look and feel fairly similar.
Essentially, MetaTrader 5 was designed to be able to trade markets other than Forex, such as stocks and commodities, essentially because it is better able to plug into a centralized trading exchange. Forex is a completely decentralized market, with a number of major players providing liquidity into this huge market at slightly different prices, in an uncoordinated fashion. Stocks and commodities, the latter of which is traded largely as futures contracts (in fact several contracts with different expiry dates), must usually be traded through a centralized process before ownership can change hands with full legal effect. At the time of the MT5 development and release, it can be assumed that Metaquotes foresaw a retail stocks and commodities trading boom, and designed the software to fit that market.
The other major differential design factor was its compliance with the U.S.A.’s “no hedging rule”, which states that clients of Forex brokers in the U.S.A. must deal on a F.I.F.O. (first-in, first-out) basis. So in a nutshell, MetaTrader 5 was developed to attract non-Forex markets and U.S. markets and to meet the inherent needs of those markets better than Metatrader 4 could. That is the true story of MT4 vs. MT5.
Metatrader 5 uses a programming language called MQL5 as opposed to the MQL4 used by Metatrader 4. The exciting thing about MQL5 is that it allows “black box” programming which, in a nutshell, means that it is easier to program and so will logically be a better framework for users and developers of trading robots and other expert advisors. However, MetaQuotes expanded this capability into MQL4 in 2014, so it is not a difference between the platforms anymore, although there is a likelihood that if the language is upgraded at some time in the future, MetaQuotes will not extend any upgrades into MQL4 as well as MQL5
It should be noted that there is no backward compatibility. Programs written for Metatrader 4 cannot run on Metatrader 5. This can be a serious drawback for traders who were wishing to “upgrade”, and is a key reason why such a change shouldn’t be seen as an upgrade.
Metatrader 5 retains two key programming-related advantages over Metatrader 4. Firstly, it's backtesting functions where you can test programmed trading strategies execute at a much faster speed. Secondly, it also allows simultaneous multi-currency pair backtesting.
Essentially, MetaTrader 5 was designed to be able to trade markets other than Forex, such as stocks and commodities, essentially because it is better able to plug into a centralized trading exchange. Forex is a completely decentralized market, with a number of major players providing liquidity into this huge market at slightly different prices, in an uncoordinated fashion. Stocks and commodities, the latter of which is traded largely as futures contracts (in fact several contracts with different expiry dates), must usually be traded through a centralized process before ownership can change hands with full legal effect. At the time of the MT5 development and release, it can be assumed that Metaquotes foresaw a retail stocks and commodities trading boom, and designed the software to fit that market.
The other major differential design factor was its compliance with the U.S.A.’s “no hedging rule”, which states that clients of Forex brokers in the U.S.A. must deal on a F.I.F.O. (first-in, first-out) basis. So in a nutshell, MetaTrader 5 was developed to attract non-Forex markets and U.S. markets and to meet the inherent needs of those markets better than Metatrader 4 could. That is the true story of MT4 vs. MT5.
Metatrader 5 uses a programming language called MQL5 as opposed to the MQL4 used by Metatrader 4. The exciting thing about MQL5 is that it allows “black box” programming which, in a nutshell, means that it is easier to program and so will logically be a better framework for users and developers of trading robots and other expert advisors. However, MetaQuotes expanded this capability into MQL4 in 2014, so it is not a difference between the platforms anymore, although there is a likelihood that if the language is upgraded at some time in the future, MetaQuotes will not extend any upgrades into MQL4 as well as MQL5
It should be noted that there is no backward compatibility. Programs written for Metatrader 4 cannot run on Metatrader 5. This can be a serious drawback for traders who were wishing to “upgrade”, and is a key reason why such a change shouldn’t be seen as an upgrade.
Metatrader 5 retains two key programming-related advantages over Metatrader 4. Firstly, it's backtesting functions where you can test programmed trading strategies execute at a much faster speed. Secondly, it also allows simultaneous multi-currency pair backtesting.
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