When it comes to forex trading, there are a number of important choices you will have to make. These will include picking which currency pairs to begin trading, what level stop losses to set and what type of trading platform to use. As the world’s largest market there is a plethora of choice when it comes to this, with the MetaTrader 4 and MetaTrader 5 (MT4 and MT5) two of the most popular options. It is essential you know the differences to decide on which one is best for your trading requirements.
MT4 Trading Platform
Firstly, the MT4 platform is not simply the predecessor for the MT5, even though it may have come into existence first. They are both separate platforms that are still being developed and updated all the time, and it is proof that newer isn’t always better here. It offers many advantages over the MT5, depending on your trading style.
Advantages
Simplicity is the main advantage that the MT4 holds over other platforms, yet it can still perform all kinds of trading methods, from hedging to quick exchanges. It takes up a lot less memory space, almost a third of the RAM compared with MT5 platforms, but can also allow for many powerful trading applications. It remains the most widely used platform by traders and brokers, so there is a lot of support behind it.
Disadvantages
Even though it allows for many different trading applications, there are still limitations in place depending on the broker and region. Its simpler stylings will not suit everyone either, with the lack of an inbuilt forex calendar, lower number of timeframes, inbuilt indicators and analytical tools not as helpful for advanced traders. Still, for beginners it is a much better option due to the easier to navigate interface and reduced number of options.
MT5 Trading Platform
The MT5 platform is a newer version, released in 2010, which does include a number of improvements on the MT4. A more advanced model, it does provide a number of advantages for certain traders, while others will prefer the MT4 platform.
Advantages
As well as forex trading, the MT5 platform has the capabilities to offer a lot more markets, including commodities, indices and more, depending on the broker. This allows traders to diversify their portfolios a lot easier without the hassle of using many different platforms. An increased number of timeframes, inbuilt forex calendar, the ability to place more orders are all other advantages. In essence, the MT5 platform is a lot bigger and more complex.
Disadvantages
Yet being bigger and more complex has its downsides, especially for the part-time or beginner trader. It takes up a lot more memory to install and run too, nor does it support hedging methods. With so many options it can be a little overwhelming and complicated for amateur traders, despite the increased number of analytical tools and charts it provides.
Consider the advantages and disadvantages of MT4 and MT5 platforms and your trading style and ability before deciding which one is best for you.
