MetaTrader 4 vs MetaTrader 5. Understanding the phenomena of MT4 and the prospects of MT5.

Author: Alexey Kutsenko

Ever since its introduction, the MetaTrader 5 (MT5) platform has been on a journey to win over the hearts of the MetaQuotes clients. MetaTrader 4 (MT4) has been reigning since 2005, even though MetaTrader 5 was released in 2010. The popularity of MT4 is truly phenomenal. It quickly became an industry standard, and soon countless expert advisors, plug-ins, consultancy firms praising it followed.

MT4 has proven itself to be very user-friendly and highly customizable, but it has its limitations. MT5, counter to popular belief, is not a new version of MT4. It has been written from scratch, so it is fair to consider it an independent product with a wider variety of options, such as stock and commodities trading, netting, market depth, and an economic calendar.

Even though MT5 is undoubtedly more advanced and convenient, users worldwide seem to take their time with migration to this platform. This is quite a peculiar case for the technological world, which, more often than not, is happy to jump to all the latest and newest software available on the market.

So why are brokers reluctant to change?

When we talk to brokers, we often hear that they are reluctant to move to MT5 because some of the clients (traders) are unwilling to do it. The traders justify it with the advanced support system, such as countless strategies and expert advisors, that was naturally built around MT4 over the years, and that might not work with MT5. It’s common to be unsure about the new product and fear that it will be insufficient or cause difficulties. Yet, adapting the existing support products for MT5 is faster and easier than many think. The advantages of MT5 easily outweigh the hassle.

MetaTrader 4 is a powerful but aging platform. It is updated and maintained to meet the latest technical requirements, but it’s not always easy. Nevertheless, some believe that the market for MT4 is still big enough to compensate for any technological shortfalls of the platform.

Why should brokers make the change?

MT5 is a modern and feature-rich platform that is beneficial for both brokers and traders. There are many reasons why we believe brokers should migrate. Here are some of the key benefits that MetaTrader 5 is offering:

1. MetaTrader 5 is a multi-asset platform. The market requirements had long surpassed the times when Forex-only environments were enough. MT5 allows brokers to follow the trends and move forward as the world of trading evolves.

2. MT5 gives a whole new level of performance, much needed for brokers who want to keep up with the modern requirements. The MetaTrader 5 platform is much faster. It can process many more users, instruments, and quotes per second. Even the latest software products make an effort to maintain relevance with the current progress’ speed, much less the older products introduced years ago.

3. White Label (WL) service in MT5 is far wider compared to MT4. MetaTrader5 offers more flexibility by giving WL clients rights to independently set up commissions, swaps, groups, manage quote flows, and receive reports.

4. The distributed architecture of the platform ensures scalability, fault tolerance, and enhanced data security, protecting the broker both from accidents or malicious activities.

5. Brokers can offer hedging and netting trading systems via a single platform. Some of the traders are used to one system and completely deny the other. Therefore, MT5 is the best choice for brokerages looking to serve both trader types.

6. Much more flexibility in terms of customizing the platform for clients’ needs. MT5 lets you set up a perfect configuration for any trader: from small retail clients to big hedge funds and professional traders.

To conclude this article, it’s fair to say that although the MT4 still holds a big market share, the MT5 presence is growing rapidly. With the current trends and climate in the industry, MT4 will have to be replaced at some point. So if you ultimately need to migrate at some point in the future, why not do it now? In a highly competitive industry such as ours, it’s better to adopt the new technology early, reap the benefits, and lead the change. Not watch it happen without you.

Tools for Brokers offers a wide range of products for brokers that operate on MT4 and MT5. Please email us at sales@t4b.com for more information.