Trading Platforms and the modern world of online trading
As early as the 1990s, trading platforms started surfacing and even up until ten years ago, Forex and CFD trading has seen a lot of change, growth and development as technology has improved and evolved.
‘Back in the day’, so to say, developers were producing special software to be utilized with trading. These trading platforms were known as trading terminals and they have played their part in paving the way towards more modern ways of trading Forex and CFDs.
In more recent years, the trading of cryptocurrencies have been offered increasingly by brokers and trading platforms. These include Bitcoin, Ethereum and Ripple, amidst others.
Trading platforms are vital due to the way in which they connect traders with the servers of brokers and the access provided to trade CFDs and financial markets. Through this, traders are provided with an array of financial instruments.
Overview of MetaTrader 4 and 5
Both MetaTrader 4 and 5 were developed and launched by MetaQuotes Software Corp. Established in 2000, the first product was released within the same year of the company’s inception.
MetaTrader 4 was released in 2005, marking it as a milestone for MetaQuotes and since the launch of the trading platform, it has grown significantly in popularity, being offered by hundreds of brokers, and used by millions of traders.
MetaTrader 5 was developed after the great success attained through MetaTrader 4 and MetaTrader 5 was launched in 2010. This new trading platform offered traders not only options to trade in the Forex Market, but in stocks and futures as well.
MetaTrader 5 also came with several additional features and functions along with increased speeds and reliability in addition to added convenience when compared to its predecessor.
MetaTrader 5 may not yet hold the same popularity and utilization as MetaTrader 4, but it has grown to be more appreciated through its functions and features which have led most brokers to replace previous versions.
Comprehensive comparison
Both MetaTrader 4 and 5 are widely successful, each in its own way, there are core differences between the two pertaining specifically to:
- The number of markets that traders have access to
- Timeframes
- Indicators
- MQL4 vs MQL5
- Economic Calendar
- Lack of backward compatibility
Number of Markets
MetaQuotes Software Corp. has absolutely dominated the Forex Market through the development and launch of MetaTrader 4, but the limit with this trading platform is that traders are only able to trade Forex while making use of this trading platform.
MetaTrader 5 on the other hand, has extended that list by offering traders the opportunity to trade not only in Forex Markets, but also in stocks and futures.
MetaTrader 4 is more designed for traders who only want to trade on Forex Markets and thus it competes with a variety of other trading platforms where accessibility to other markets is concerned.
MetaTrader 4 is not designed to connect directly to exchanges but instead has utilize integration with gateways to gain access to exchanges.
By using integration with gateways, MetaTrader 4 is able to obtain quotes and market news in addition to allow traders to perform operations in trading. MetaTrader 5, however, allows for seamless connection to exchanges without much hassle.
Timeframes
Both MetaTrader 4 and 5 provide traders with the ability to view charts in a variety of timeframes, but MetaTrader 4 is limited to only nine timeframes whereas MetaTrader 5 provides 21.
This provides traders who use MetaTrader 5 as their trading platform with a significant amount more edge pertaining to analysis of the market.
Traders using MetaTrader 4 who have some experience in programming can however use MQL4 to rebuild the timeframes provided in MetaTrader 4 using period converter script.
But unfortunately for traders who are unable to program, this is an issue as they are faced with limited options, unless they move over from MetaTrader 4 to MetaTrader 5.
The difference in timeframes comes in specifically with minute and hourly views and MetaTrader 4 only provides M1, M5, M15 and M30 along with H1 and H4.
MetaTrader 5 on the other hand provides M1 – M5, M6, M10, M12, M15, M20 and M30 along with H1-H4, H6, H8 and H12. Both platforms provide daily, weekly, and monthly views.
Indicators
MetaTrader 4 has 30 indicators and 24 analytical objects which come standard and built into the platform in addition to traders having access to over 2000 free custom indicators along with 700 indicators which can be purchased.
MetaTrader 5 has 38 technical indicators, 44 analytical objects in addition to offering an unlimited number of charts. MetaTrader 5 also provides traders with access to download (or purchase) more from either the Code Base or The Market.
Traders can also make use of the Freelance Service to order more indicators from independent developers.
MQL4 vs MQL5
Both MQL4 and MQL5 programming language provide traders with the ability to create their own custom indicators, but MQL5 is a lot more comprehensive and advanced than MQL4.
MQL5 makes provision for object-oriented program, or OOP, which is incorporated into algorithmic trading and allows traders to break the program down into blocks.
Similar to the black box found on aircraft, these blocks have information entering and results or actions exiting based on the input. OOP can be coded for an EA which can in turn be cloned and used in the next system the trader develops.
This allows traders to collaborate with developers in having one developer work on one set while the other developer works on another. When this is completed, the trader can combine them into one final program seamlessly.
Although MetaTrader 4 is still available for use and download, the shortcut that is installed in addition to the MetaTrader 4 application is for MQL5.
This would suggest a phased transition or migration from MQL4 to MQL5 with several changes taking effect, such as:
- MQL5 eliminates certain functions such as start(), init() and deinit().
- There is no limit pertaining to the number of indicator buffers.
- DLLs are loaded immediately after an Expert Advisor has been loaded
- The time involved with checking logical conditions is shortened, and more.
Economic Calendar
MetaTrader 5 provides traders with an economic calendar which can be accessed on the platform as opposed to MetaTrader 4 which does not provide an economic calendar and traders would have to make use of the Forex Factory Calendar.
Lack of backward compatibility
When traders move from using MetaTrader 4 to MetaTrader 5 and thus transitioning from using MQL4 to MQL5, the process involved with moving MQL4 codes over to MQL5 is not only costly, but also time-consuming as well.
In addition to this, MetaTrader 5 is superior to MetaTrader 4 in the following ways:
- MetaTrader 5 provides a multi-currency strategy tester for algorithmic trading
- MetaTrader 5 is significantly superior where testing and optimization are concerned in addition to providing improved speeds as well.
Which one is better choice and why?
MetaTrader 4 is a lot more popular than MetaTrader 5 and it has been around for a lot longer and is used by millions of traders, but despite this, and although it is a slow transition, more brokers and traders are leading towards MetaTrader 5.
MetaTrader 4 is advanced, highly customizable and it is reliable in every way, but so is MetaTrader 5, and it has a far more advanced offering.
Both MetaTrader 4 and MetaTrader 5 are available on various platforms such as desktops that use either Windows, Linux, or Mac OS (although the download and installation process can be time-consuming and tedious) in addition to mobile devices.
MetaTrader 4 and 5 can either be obtained from broker websites, directly from the download pages for each, or from Google Play and the App store for smartphones, tablets, iPhones, and iPads.
MetaTrader 4’s APK can however not be downloaded directly from the website, which would have been the safest and most trusted way, in which case traders who have no other option other than using the APK, will have to trust third-party websites.
The MetaTrader 5 APK however, can be downloaded from the website itself so traders who have to make use of the APK can be assured that it is from a safe, secure, and reliable source when installing it onto their Android devices.
MetaTrader 4 has an extensive array of functions and features, but MetaTrader 5 simply has a lot more. Some of the additional features include, but is not limited to:
- Hedging is allowed
- No FIFO rule
- Fundamental calendar (economic calendar) integrated into the platform
- Commerce integration
- Improved charting and additional timeframes
- Exclusive indicators and additional indicators and analytical tools
- Ability to order on multiple markets
- MT5 supreme edition plugin is integrated
Traders are not only limited by the tables, indicators and graphs that come standard with MetaTrader 5, traders can make use of the updated and advanced MQL5 programming language to create their own and it can seamlessly be imported into the platform.
The coding used in MQL5 is a lot simpler than that of MQL4 and this allows traders to create their own EAs which may cater more accurately and efficiently to their trading needs when conducting market analysis.
The MetaTrader 5 supreme edition plugin, or MT5SE also allows traders access to the following:
- Easy Order Ladder Trading – which allows traders to open and manage their positions faster in addition to being able to open both pending and market orders by using this tool.
- Expanded Mini Terminal with various features – the mini terminal can be expanded into a fully featured control panel when using the MT5SE
When looking at the features of each version individually as well as holistically, MetaTrader 5 is truly an upgrade from MetaTrader 4 in every way, although there will still be brokers and traders who prefer MetaTrader 4 for their own reasons.
Brokers and MetaTrader 4 and 5
Amidst the hundreds of brokers out there of which to choose from, should traders wish to make use of the MetaTrader trading platforms, it is necessary that the broker supports such use in conjunction with the accounts that they offer.
In some cases, brokers may not offer traders a choice in trading platforms and the broker may either offer their own in-house proprietary trading platform, or the trading platform will depend on the type of account that the trader chooses.
There is a vast majority of brokers who only offer MetaTrader 4 while others only offer MetaTrader 5, but more brokers have started making provision for both platforms based on the traders needs, demands and simply also their preference between the two.
Some popular brokers who offer both MetaTrader 4 and 5 trading platform include, but is not limited to:
Conclusion
MetaTrader 4 and MetaTrader 5 are both extremely advanced, comprehensive, and powerful trading platforms and it makes sense why MetaTrader 4 is still high in demand, but with a digital world that is continuously evolving, MetaTrader 5 is more dominant.
The features, functions, and capabilities of MetaTrader 5 make it the ultimate multi-market trading platform that can cater for traders who are more versatile in needing access to more markets than just Forex.
Traders who would like to take matters into their own hands with regards to developing their own indicators and EAs will find endless possibilities with MQL5 in addition to being able to use MetaTrader 5’s strategic tester for algorithmic trading.
MetaTrader 5 still has a way to go to gain the amount of popularity among brokers and traders alike, but as the needs of traders increase to have access to a lot more at faster speeds than MetaTrader 4 provides, a lot may transition to MetaTrader 5.
Despite the addition in functions and features, MetaTrader 5 is still user-friendly when taking beginner traders into consideration and navigating MetaTrader 5 along with using it is just as simple as with MetaTrader 4.
MetaTrader 5 is bursting at the seams with possibilities for traders to not only develop different components to personalize and master their trading strategies, but also to test their strategies on a comprehensive and advanced trading platform.
Top 4 Brokers
