What is the Fundamental Difference between Metatrader 4 and Metatrader 5
Metatrader 4 and Metatrader 5 are platforms used by traders to trade futures products such as Forex, CFDs, Futures, and Stock Indices. Without using this application, people will find it difficult to make transactions because they cannot interact with sellers or buyers in a market.
What are the basic differences between Mt4 and Mt5? Maybe this is a question that is often asked by traders, especially for beginners who want to register through a certain broker. Currently, most brokers have provided two types of platforms, namely Mt4 and Mt5. So they are confused about which one to choose? Better Metatrader 4 or Metatrader 5?
On this occasion, JurnalForex would like to briefly explain the basic differences between the two platforms. So far, people think that Mt5 is the latest version or successor of Mt4, so they think that the latest generation is the best generation. Though not necessarily, why? Follow this discussion to the end.
What are the Most Fundamental Differences between Mt4 and Mt5?
When viewed from the outside, these two platforms seem to be the same and have no difference. Even people think why to switch to Metatrader 5 if it’s the same shape as Metatrader 4. Therefore, here are some differences between the two platforms.
#1. Types of Products Traded.
At this first point, I want to answer the public opinion that Mt5 was created as an upgrade or improvement from the previous version. But actually, it is not appropriate to use the terms Mt4 and Mt5 because Metatrader 5 was created for new products with the MQL5 database.
In Metatrader 5 there are new products that can be traded namely Forex, CFDs, Stocks, Bonds, and Futures. While Metatrader 4 only focuses on selling Forex and CFDs. So it is not wrong if forex traders still use Mt4 a lot.
#2. Pending Order System.
So far, when traders make transactions using Metatrader 4, they will choose from 4 main options, namely Buy Stop, Sell Stop, Buy Limit, and Sell Limit. However, through Metatrader 5, people can place 2 types of new pending orders, namely Buy Stop Limit and Sell Stop Limit.
This of course shows the difference between the two platforms. However, for an explanation of the use and benefits of Buy Stop Limit and Sell Stop Limit, JurnalForex will write in a separate article for clarity.
#3. Operating system.
For Metatrader 4, this platform can fit into both 32-bit and 64-bit Windows operating systems because it was specially created at a time when computers were still dominated by 32-bit windows operating systems.
While Metatrader 5, is more suitable if run using a 64-bit operating system because it can run more perfectly. In addition, the Mt5 database already uses MQL5 code.
#4. Hedging or Locking System.
This basic difference between the fourth Mt4 and Mt5 is the main reason why there are still many traders who use Metatrader 4 compared to Metatrader 5. This is because, in Mt5, traders cannot perform Hedging and Locking trading systems.
As we know, hedging is one of the most popular trading systems and is often used to secure positions that do not match predictions. As an illustration, here is an example of Hedging in Mt4, namely:
- When making a SELL transaction with Lots 2 on Mt4 and sometime later BUY on the same currency pair as Lots 1, then in the transaction window 2 open positions will be recorded, namely, Sell 2 Lots and Buy 1 Lot.
- However, when you SELL with Lots 2 on Mt5 and sometime later re-open a BUY position with Lots 1, the transaction window automatically reads only 1 open position, namely SELL 1 Lot.
For this reason, there are still many traders who do not want to change to using Metatrader 5. People still need hedging positions to seek profit.
#5. Economic Calendar.
As one of the drivers of a stock price, forex, or futures product, the fundamental news is always the center of attention of traders. People can read or view the schedule of the important news of a country’s policy through the economic calendar.
If all this time traders have been monitoring news through well-known sites such as forex factories, but through Mt5 traders can directly see the schedule of the economic calendar without having to leave the trading platform. This may be another advantage of Mt5 over Mt4.
Is Mt4 or Mt5 better for forex trading?
Both platforms are equally good, but for traders, it is necessary to learn the function or purpose of trading. If you want to use the Metatrader for buying and selling currencies or forex, then choosing MT4 is the right choice. Because the Hedging system that is allowed on this platform will be very influential in daily trading activities, especially keeping larger losses.
But if you want to trade on Stock Indices, Futures and Commodities then the Mt5 platform is the right choice. Because the Mt4 operating system does not yet support buying and selling stocks, futures, and commodities.
For those of you who are still starting to trade forex, maybe you should choose Metatrader 4 because the system used is very easy to learn, and the tools you have also meet the standards in forex trading. Many indicators and graphic tools are owned by Mt4 and that is enough to do technical analysis.
Okay, JournalForex friends, those were 5 basic differences between Mt4 and Mt5. Hopefully, this information can provide a new picture for choosing the most suitable platform. Do you use Metatrader 4 or Metatrader 5? It comes back to your choice.