MT4 Basics

Since its release in 2005, MetaTrader 4 (MT4) has become the default language of retail forex. Its longevity is no accident: MT4 delivers fast execution, readable charts, and a modular design that invites customisation without overwhelming the user. If you trade spot FX and CFDs and want a platform that “just works” on modest hardware, MT4 remains an extremely compelling choice. This section distils what matters most—architecture, charts, orders, automation, data handling, and day-to-day workflow—so you can judge MT4 on practical grounds rather than nostalgia.

Architecture and Performance

MT4 is a 32-bit, single-threaded desktop application that prioritises stability and low resource usage. In practice, that means it runs smoothly on older laptops and virtual private servers (VPS) with limited RAM and CPU. The trade-off is that MT4 cannot parallelise heavy tasks; a single terminal running multiple charts and Expert Advisors (EAs) shares one execution thread. Professional workflows accommodate this by launching several terminals—one per strategy or symbol cluster—so that a stalled EA or an overloaded chart does not freeze the entire operation. For most discretionary FX traders, MT4’s footprint is a boon: you can keep charts, news, and a browser open without grinding your machine to a halt.

Market Coverage and Symbols

MT4 was built first and foremost for spot FX. Many brokers also plug in CFDs on indices, metals, energies, and a handful of equities, but the core experience revolves around currency pairs. Contract specifications—lot size, tick size, min/max volume, trading hours—are broker-defined. Right-click any symbol in Market Watch → Specification to see exact parameters. Because FX is decentralised, price feeds vary slightly between brokers; MT4 takes the broker’s feed as the source of truth. If you run mechanical systems, always test with your broker’s data rather than a generic history.

Charts and Visual Workflow

MT4’s charting is deliberately simple. Timeframes run from M1 to MN, candlesticks are crisp, and drawing tools cover the essentials: horizontal lines, trendlines, Fibonacci retracements/extensions, channels, and shapes. The power lies in templates and profiles. Templates store the look and indicators for a single chart; profiles save the entire workspace. A disciplined MT4 user maintains a small set of templates (e.g., “Clean PA,” “MA-Momentum,” “Range Tools”) and flips between profiles for London majors, yen crosses, or commodity-linked pairs. This keeps cognitive load low and ensures you can recreate a broken workspace in seconds.

Indicators: Built-in vs. Custom

Out of the box, MT4 ships with the classics—Moving Averages, RSI, MACD, Bollinger Bands, Stochastics, ATR. For many strategies, that’s enough. The real draw is the ecosystem: thousands of community indicators and commercial tools written in MQL4. You install them by dropping .mq4/.ex4 files into MQL4/Indicators and restarting. The caveat is quality control. Vet sources, test on demo, and avoid duplication (e.g., five momentum oscillators telling you the same thing). A lean, well-understood stack beats a glamorous but incoherent dashboard.

Order Types and Execution

MT4 supports market orders, four pending order types (Buy/Sell Limit, Buy/Sell Stop), and protective Stop-Loss/Take-Profit. Most brokers offer Market Execution (you set volume, accept slippage) or Instant Execution (requotes if price moves). For fast trading—news or momentum—enable one-click trading (Alt+T) on the chart, but practise on demo to avoid fat-finger errors. MT4’s appeal here is predictability: order tickets are uncluttered, SL/TP lines are visible on the chart, and modifications are drag-and-drop. For anything spread-sensitive (scalping), an ECN/RAW account type tends to pair well with MT4’s speed.

Risk, Sizing, and Trade Levels

Volume in MT4 is expressed in lots (1.00 = 100,000 base units for most FX pairs). Because the platform does not include a native position-size calculator, many traders rely on scripts/EAs that read your stop-loss line and compute size for a fixed account risk (e.g., 0.5%–1.0%). Turn on “Show Trade Levels” so entries, stops, and targets are anchored visually on the chart. As spreads widen around rollover or data, you’ll see at a glance whether a stop is uncomfortably tight.

Automation with Expert Advisors (EAs)

Automation is where MT4’s influence is felt most. EAs, coded in MQL4, can scan markets, place and manage trades, trail stops, and export logs. Because MT4 is single-threaded, best practice is to dedicate one terminal instance per heavy EA to avoid contention. Robust EA operations typically run on a VPS near the broker’s server to minimise latency and downtime. The platform’s Strategy Tester supports backtesting and basic optimisation, but test quality depends on your broker’s historical tick approximation and spread settings. The golden rule still applies: forward-test on demo, then go live small; beware curve-fitting.

Data, Spreads, and Slippage Reality

There is no central tape in FX; MT4 simply renders your broker’s feed. Expect spreads to compress during the London–New York overlap and widen at rollover (around 5 p.m. New York) and during high-impact releases. If your strategy’s edge relies on sub-pip precision, design assumptions around the worst-case spread, not the best. Slippage—positive and negative—is part of life. ECN accounts plus sensible trade timing do more to improve net fills than any indicator ever will.

Housekeeping: Files, Logs, and Backups

Use File → Open Data Folder to reach MQL4/ (Experts, Indicators, Scripts, Files) and back it up regularly along with templates and profiles. The Journal and Experts tabs in the Terminal explain 90% of platform mysteries—order rejections, EA halts, network hiccups. Export Account History weekly to CSV/HTML for journalling. A tidy MT4 installation (no abandoned indicators, no mystery EAs) is cheaper than any risk add-on.

Strengths and Natural Use Cases

MT4 excels when you trade mainly spot FX, value execution speed and simplicity, and want access to a gigantic library of third-party tools. It shines for discretionary trend, swing, and intraday approaches, and for lightweight automation (alerts, trailing stops, semi-systematic scripts). If your workflow depends on multi-asset coverage, multi-threaded backtesting, or additional pending order types, you will feel the ceiling—and that is where MT5 starts to pull ahead. But for a huge share of FX traders, MT4’s balance of speed, stability, and ecosystem remains hard to beat.

MT5 Basics

MetaTrader 5 (MT5), released in 2010, was designed as the successor to MT4—but it is not just “MT4 plus one.” It is a multi-asset platform built to handle forex, stocks, futures, and options, with a more modern 64-bit, multi-threaded architecture. While MT4 remains entrenched in forex trading, MT5 is increasingly adopted by brokers who want a single platform for broader market access. This section covers the essential characteristics of MT5: architecture, asset coverage, order types, charting, indicators, automation, and why its advanced testing tools matter.

Architecture and Speed

MT5 is a 64-bit, multi-threaded application that takes advantage of modern processors. Unlike MT4, it can run heavy backtests and multiple Expert Advisors without locking the terminal. Large portfolios of charts, complex indicators, and parallel strategy optimisations are handled more smoothly. This performance gain matters if you run algorithmic strategies, conduct portfolio-level research, or need to test thousands of parameter sets. For discretionary traders with modest chart needs, MT5’s power is not strictly necessary—but it does future-proof the setup.

Multi-Asset Coverage

MT5 was built to support exchanges and centralised markets. Beyond forex and CFDs, it covers equities, ETFs, futures, and options depending on your broker. This makes it attractive for traders who want to consolidate under one platform rather than juggle FX on MT4 and equities on a separate terminal. Market depth (Level II order book) is native in MT5, showing liquidity layers for exchange-traded products where brokers provide access. This opens possibilities for strategies sensitive to order-flow dynamics that MT4 cannot provide.

Order Types and Execution

MT5 expands the order menu. In addition to the four pending orders of MT4, it adds Buy Stop Limit and Sell Stop Limit, allowing greater control in breakout and retracement scenarios. Execution models include Market, Instant, Exchange, and Request, depending on broker setup. The order window itself is more detailed, with depth-of-market integration where available. For traders who structure entries precisely around price zones, MT5’s extra order types reduce the need for workarounds via scripts or EAs.

Charting and Analytical Tools

Charting on MT5 is an upgrade from MT4. Timeframes increase from nine in MT4 to twenty-one in MT5, covering everything from M1 to monthly, plus in-betweens like M2, M3, and H2. Built-in indicators exceed 80, with additional graphical objects for detailed technical analysis. Economic calendars are integrated directly into the platform, meaning key data releases appear contextually on charts. For traders who rely on multi-timeframe confluence or calendar awareness, these are welcome quality-of-life improvements. Templates and profiles remain, ensuring workflow consistency.

Automation and MQL5

Automation in MT5 uses MQL5, a more advanced language than MQL4. It supports object-oriented programming and offers broader standard libraries, which enable more complex EAs and indicators. For developers, MQL5 is powerful but less forgiving—porting code from MT4 requires rewriting rather than copy-pasting. The payoff is flexibility: sophisticated multi-asset systems, advanced order management, and fine-tuned risk controls are all possible in MQL5. The integrated Market for EAs and indicators is also more polished, offering user reviews, demo versions, and direct purchases inside the platform.

Strategy Tester

MT5’s Strategy Tester is arguably its strongest selling point. It supports multi-threaded, multi-currency backtests using real ticks with variable spreads. You can run forward optimisation, visual mode, and walk-forward analysis, all features absent or limited in MT4. For algorithmic traders, this drastically reduces the time needed to validate ideas and improves robustness checks. Distributed cloud computing is also available, letting you rent external processing power to accelerate backtests. This transforms MT5 into a research tool rather than just a trading terminal.

Data Management and Reporting

MT5’s data handling is more granular. It supports tick-by-tick history for more accurate backtests, and its trade reporting is richer, with detailed breakdowns of profit factors, drawdowns, and recovery ratios. Trade history can be exported with full metadata, making journalling and third-party analysis easier. For traders who track performance seriously, MT5’s reporting offers immediate advantages over MT4’s more limited account statements.

Strengths and Adoption

MT5’s strengths lie in multi-asset capability, extra order types, advanced charting, and world-class backtesting. Adoption has been slower because MT4 is entrenched, and many brokers and traders resist switching due to existing indicator libraries and habits. However, MT5 adoption is rising, particularly among brokers that want one platform for both forex and exchange-traded assets. For new traders without legacy dependencies, MT5 may represent the cleaner long-term choice.

Key Differences

Although MetaTrader 4 and MetaTrader 5 share a common look and feel, their core differences run deeper than the interface. These differences affect everything from execution models to custom coding, and they influence which platform suits particular traders. Understanding the distinctions helps in making a deliberate choice rather than sticking to MT4 out of habit or adopting MT5 blindly. Below, we break down the key areas of divergence.

Market Coverage

MT4 is forex-focused, designed during a time when retail traders were largely confined to currencies and CFDs. MT5, by contrast, is multi-asset, supporting stocks, bonds, options, and futures in addition to FX. For traders who intend to branch into equities or trade exchange-listed derivatives, MT5 is better suited. For those who plan to stick purely with forex, MT4 remains sufficient, with its simplicity serving as a strength rather than a weakness.

Execution and Order Types

MT4 offers four pending order types, while MT5 expands this to six, adding Buy Stop Limit and Sell Stop Limit. MT5 also integrates market depth features for brokers offering exchange connectivity. The broader order functionality enables more complex strategies, but for traders who rely on basic market and limit orders, MT4 covers the essentials. Execution models also differ—MT5 supports Exchange execution alongside Market, Instant, and Request, which is necessary for centralised assets.

Programming Languages

MQL4 and MQL5 are not interchangeable. MQL4 is procedural, easier to learn, and has an enormous library of scripts, indicators, and Expert Advisors developed over two decades. MQL5 is object-oriented and closer to C++, allowing more sophisticated systems but requiring greater programming skill. Traders who rely on custom tools must weigh the cost of migrating to MQL5 or being locked into the MT4 ecosystem. Over time, MQL5 offers more flexibility but less immediate compatibility with legacy resources.

Strategy Testing

Backtesting and optimisation are perhaps the starkest differences. MT4 provides single-threaded testing with limited accuracy, adequate for rough checks but insufficient for institutional-level research. MT5 introduces multi-threaded, tick-level testing across multiple instruments simultaneously. It also allows forward optimisation and cloud computing. For systematic traders, MT5’s Strategy Tester is a decisive advantage. For manual traders, the added complexity may be unnecessary, making MT4’s simpler tester more approachable.

Data and Timeframes

MT4 limits traders to nine standard timeframes, while MT5 offers twenty-one, including unusual ones like M2, M3, and H2. Historical data handling is also improved in MT5, with access to more granular tick data for precise modelling. This makes MT5 better suited for traders who employ multi-timeframe analysis or data-heavy research. However, for those who use mainly daily and intraday charts, MT4’s simpler setup suffices without overwhelming options.

Community and Adoption

MT4 has a massive community, a deep library of free and paid add-ons, and widespread broker support. MT5, while growing, still trails in adoption. For traders who value a mature ecosystem with countless resources, MT4 is more convenient. MT5’s community is younger but expanding, especially with brokers increasingly defaulting to it for new accounts. Over the long run, the balance may tilt in favour of MT5 as legacy support for MT4 wanes.

Regulatory and Broker Support

Regulation also shapes the divide. Some regions require brokers to use platforms that accommodate asset classes beyond FX, pushing them toward MT5. Others maintain entrenched MT4 infrastructures. As regulators demand more transparency and reporting, MT5’s more detailed analytics may prove more compliant with evolving standards. Traders need to check which platform their broker prioritises, as this often dictates available account types, spreads, and even asset access.

Choosing Between MT4 and MT5

Ultimately, the choice between MT4 and MT5 comes down to trading style and horizon. Manual forex traders who rely on simplicity, existing indicators, and a proven interface often prefer MT4. Algorithmic traders, multi-asset investors, and those who demand advanced backtesting gravitate toward MT5. Both remain viable, but as brokers and regulators shift towards broader asset integration, MT5 may increasingly become the default, even if MT4 continues to be a staple for years to come.