Should MT4 Remain the Most Popular FX Trading Platform?

Meta trader 4 is the most dominant trading platform in the world of forex trading. Though cTrader and NinjaTrader are also popular with a section of forex traders and they also offer good features, their use by retail traders is not as widespread as the usage of MT4. MT4 has proven to be a very popular platform among retail traders and brokers. Indeed, it is so popular that Metaquotes Inc has had a very difficult time pushing the adoption of the MT5 platform, built to be the successor to MT4. 

The adoption of MT4 by retail forex brokers has been so widespread that it is hard to come across one that does not offer MT4 to its clients. This is not really because of the wide range of functionalities and features found on  MT4. Rather, it has more to do with brokers not wanting to lose their market share to other competing brokers that offer what the market wants. For now, traders across the world continue to prefer MT4, even when there is enough evidence to show that it is fast becoming a relic of the last decade and should really have no place heading into the beginning of the 3rd decade of the new Millennium.  

Despite the popularity of MT4 among traders and brokers, it has several shortcomings. Many of these shortcomings have been addressed with the MT5 platform. There is a general misconception about MT5; many people feel it is simply an upgraded version of MT4, whereas it is a whole different software from MT4. These differences can be seen when MT4 is compared with MT5.  

  1. MT4 was designed as a 32-bit application, which means that the total RAM that it can use has a limit of 3GB. Industry-standard software, especially the cybersecurity protocols for trading platforms, is built on 64-bit and 128-bit technology. Therefore, MT4 is an obsolete trading platform which cannot compete with the modern demands of the financial markets of today.  
  2. MT4 was primarily built as a platform to trade currency pairs only. That was the original concept. MT5, in contrast, was designed to trade multiple assets which include not only forex pairs, but also CFDs on indices, commodities, stocks, and lately, cryptocurrencies.  
  3. There are subtle but significant differences in the interfaces of the two trading platforms. MT5 contains additional features such as an increased number of time frames, more technical indicators, and additional features. For instance, MT4 has 9-time frames, while MT5 has 21-time frames. Additional time frames give the trader more opportunity for in-depth market analysis.  
  4. Perhaps the most significant difference between MT4 and MT5 is the presence of the Depth of Market (DOM) in MT5. The Depth of Market tool indicates the various prices at which there is buying and selling interest, and the corresponding trade volumes at each price. This tool is critical in understanding the market flows which ultimately dictate where the price will head to.  Meanwhile, look at the historical prices of several stocks and trading assets on Tradingview’s charts.
  5. Strategy testing on MT5 is multi-threaded, as against that on MT4 which is single-threaded. What does this mean? Multi-threaded strategy testing allows full deployment of computer resources, which makes the process more efficient. An infinite number of remote agents can be connected to the computer.  
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Here are some other features that are found on MT5, which are absent on MT4.  

  • An embedded community chat function. 
  • An Economic Calendar
  • Ability to transfer funds between accounts.  
  • Partial order filling. 
  • Immediate fill or kill. 
  • Exposure netting function (an advanced hedging strategy). 
  • Automated log file ZIP compression. 

These are all advances in MT5 which are compatible with the demands of today’s financial markets. With MT4, it will be quite difficult for retail traders to keep up with performances that will make them sustainably profitable.  

Conclusion 

It is safe to say that MT5 is not an upgrade of  MT4, but is actually a trading platform which is more advanced than MT4. The advances in MT5 should make this platform the go-to platform for retail forex and CFD trading. Perhaps if Metaquotes and its partner brokers are able to showcase the improvements that are found on MT5 and the positive impact they will have on trading outcomes, perhaps we may see more adoption of MT5 across the board. 

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