MT4 VS MT5: KEY DIFFERENCES FOR FX AND CFDS

MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are electronic trading platforms developed by MetaQuotes Software. MT4 was launched in 2005 and became extremely popular for forex trading, while MT5, introduced in 2010, was designed as a multi-asset platform with broader market access. Though both platforms are widely used today, especially within the retail FX and CFD sectors, they have distinct features aimed at different types of traders.

MT4 is largely used for forex and CFD trading due to its simplicity, stability, and support from brokers and third-party developers. It allows for one-click trading, real-time quotes, and custom indicators, appealing primarily to discretionary traders and those using Expert Advisors (EAs).

MT5 offers broader functionality, supporting more asset classes including stocks, futures, and commodities. It introduces new order types, advanced charting tools, more timeframes, and an economic calendar, positioning itself more toward traders who require multi-asset support and advanced technical tools.

Key MT4 Features:

• Primarily focused on FX and CFD trading
• Easy-to-use interface ideal for beginners
• Supports automated trading via MQL4
• Wide support from brokers and third-party integrations
• Real-time charting and technical analysis tools

Key MT5 Features:

• Supports additional markets like equities and futures
• MQL5 language offers more advanced algorithmic capabilities
• Increased number of technical indicators and charting tools
• More timeframes (21 compared to MT4's 9)
• Built-in economic calendar and market depth

While MT4 remains dominant in the FX/CFD segment due to its lower resource requirements and extensive EA library, MT5 is gaining traction among traders looking for enhanced performance, more versatility and better backtesting capabilities.

When it comes to order execution and analytical tools, MT4 and MT5 differ in substantial ways. MT4 offers a simple execution model primarily tied to forex and CFD brokers that use the dealing desk or ECN models. It supports 4 order types: Buy Stop, Sell Stop, Buy Limit, and Sell Limit, which are sufficient for most retail FX strategies.

MT5, on the other hand, supports a total of 6 order types with the inclusion of Buy Stop Limit and Sell Stop Limit. This allows for more complex trading strategies and greater control over trade placement.

The MT5 platform also features more granular timeframes, including 2-minute, 3-minute, and 10-minute intervals, which can be essential for scalpers and day traders. Additionally, the presence of tools such as market depth (Level II pricing) and a built-in economic calendar allows traders to make more informed decisions directly on the platform.

Custom Indicators and Scripts:

• MT4 uses MQL4, a language tailored for easier development of scripts and EAs
• MT5 uses MQL5, which supports object-oriented programming and faster execution

Traders focusing on automation will appreciate the faster strategy testing in MT5—a result of the multi-threaded strategy tester capable of using all CPU cores. MT4’s tester is single-threaded, which can prolong backtesting for complex strategies.

Customisation is also an important point in the MT4 vs MT5 debate. While both platforms allow significant cosmetic and functional modifications, MT4 boasts more widespread third-party tools, indicators and libraries due to its longer market adoption and active online community.

Execution Speed and Latency:

• MT5 has an updated architecture that supports faster execution
• MT4 is lighter on system resources and still favours traders on lower-powered machines or slower internet

Overall, for retail FX/CFD traders whose strategies are built around speed and automation, MT5 offers more powerful tools—but for users content with a proven, stable environment, MT4 remains comfortably sufficient.

The choice between MT4 and MT5 greatly depends on the trader’s goals, strategy, and the instruments they intend to trade. For simple forex and CFD strategies, MT4’s familiarity and rich ecosystem may be more than adequate. However, traders seeking diversification, advanced tools, or access to additional markets may find MT5 far more versatile.

MT4 is best suited for:

• Forex-focused traders preferring a stable and lightweight platform
• Beginners and intermediate traders with straightforward strategies
• EA users with pre-built MQL4 systems and templates
• Traders with lower hardware/internet bandwidth capacities

MT5 is ideal for:

• Advanced traders who require multi-asset access (e.g., stocks, commodities)
• High-frequency traders, scalpers and algorithmic strategists
• Traders requiring enhanced analytics and backtesting
• Those wanting built-in market data features like calendars and indicators

Brokers also influence user adoption. While almost all FX brokers support MT4 due to its legacy demand, a growing number of brokers are making MT5 available, especially where regulatory environments require transparency or multi-asset offerings.

Migration and Compatibility Influences:

• MT4 and MT5 are not cross-compatible: Scripts, EAs and indicators need rewriting
• This has delayed mass migration to MT5 despite its superior performance
• Some proprietary trading tools or hedging methods are only MT4-compatible

In conclusion, there is no one-size-fits-all answer. Traders must evaluate their platform choice based on technical requirements, asset class preferences, and long-term trading goals. MT5 represents a more modern, powerful solution, while MT4 continues to serve the needs of millions of traders looking for simplicity and proven reliability in the FX/CFD domain.