Pepperstone clients can choose between the MetaTrader 4 or MetaTrader 5 platform with the Pepperstone MT4 platform more suited to forex traders based on the interface and automated EAs functionality while the Pepperstone MT5 platform is suited for CFD traders who want to trade currency, indices, shares and more.
View the full MT4 vs MT5 Pepperstone review below.
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If you are looking for an online forex trading platform, you are likely to have come across the following platforms by MetaQuotes Software Corp: MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Along with cTrader, these form the main trading platform offerings by Pepperstone. Since its release in July 2005, MT4 has become the most popular platform in the world for trading forex. Not only is MT4 Pepperstone’s most popular platform, but Pepperstone is also one of the world’s largest MT4 brokers. MT4’s straightforward and intuitive interface and broad functionality have made it a much-loved trading platform for both beginner and advanced traders.
In June 2010, MT5 was released. MT5 platform not only allows you to trade more financial instruments than MT4, but offers more technical analysis and analytical tools. In a nutshell, this means more trading information at your disposal when making trading decisions. Despite MT5 having its appeal as a new and improved platform over MT5, MT4 has continued to maintain popularity in its own right. This review compares MT4 and MT5 when using Pepperstone’s MetaTrader platforms so you can decide which platform is the right one for you.
The overall rating is based on review by our experts
When it comes to making trading decisions, generally speaking, the more information and the more precise the information you can get, the better your trading decisions can be.
Technical indicators help you detect price patterns. Each platform offers patterns, lines and calculations which try to predict future prices. MT4 offers 30 technical indicators including all the essential indicators that will satisfy the needs of most traders including:
In addition to the above, there are a further 2000 free custom and 700 paid ones available through code base and MT4 Marketplace.
MT5 however offer offers an additional 8 indicators for even more advanced price prediction. MT5 separates these forex indicators into 5 different groups – ‘Trend’, ‘Oscillators’, ‘Volumes’, ‘Bill Williams’ and a custom one where you can store your own developed or imported indicators.
New indicators for MT5 include:
Like MT4, you can access additional indicators through the MetaTrader code base and Market place.
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Tools such as Analytical objects are great for identifying price trends, support and resistance levels when defining cycles and platting channels. Also called graphical objects, these differ from indicators as they are plotted manually.
MT4 offers 31 analytical tools. MT5 improves on this offer 44 graphical objects you can use. Analytical tools include:
MT5 not only offers more tools for analysis but also connects directly to trading exchanges. What this means is you can view historical and real-time volumes, something MT4 cannot do.
MetaTrader allows you to break down your charts into different timeframes. This allows you to see trends and patterns over different periods. MT4 offers 9 different timeframes while MT5 more than doubles this, offering some 21 different timeframes. MT5 timeframes include:
With a ‘pending order,’ your order will open once your pre-defined price level is triggered.
MT4 offers all the essential pending order type you will when trading, however, aims to improve on this as it offers two new types of pending order types. These are ‘buy stop limit’ and ‘sell stop-limit’. Both are useful to help reduce the occurrence of slippage.
Unlike a ‘pending order’ which is automatically actioned when a set price is triggered, ‘order execution‘ is when you manually action your order.
While MetaTrader 4 and 5 have a range of ‘order execution’ types, Pepperstone only offers ‘market execution’. Market execution is simply a request to fill your order at the nearest available market price. In this type of order, you specify only the volume when you place an order. The final big/ask price will be determined during the execution process.
The execution mode is defined by the broker, not the user. Our Pepperstone vs FXCM and OANDA review found that Pepperstone uses market execution because, in ECN style trading, where quotes are rapidly changing, the broker fills your order despite changes in price. This is different from a market maker broker which has fixed spreads and its liquidity. These brokers will usually use instant execution.
MT5, unlike MT4, allows for partial orders. With MT4, a trade will be filled or not at all. MT5, on the other hand, allows for orders to be partially filled. If only part of the full volume of a trade can be completed, forex traders can select for part of the volume to be carried through and the rest cancelled.
In MT4 you only have a choice of two different types of order policies, these are filled or killed. This means if the order cannot be completed, then it will be terminated.
With MT5, orders can be partially filled. This means if an order is not able to be executed, then the order can be given an immediate cancel or return. In the event of an immediate cancellation, if some of an order is not filled then the broker should cancel the order. In the event of a return, if the order is only partially filled, then the broker can create a limit or market order so the remainder of the order can be filled.
One of the main reasons MT4 continues to be a popular choice for traders at the interface. MT4 interface is known for being very user friendly, which makes it good for beginner users. This is because the platform is designed for forex trading, which makes it very quick and easy to use.
One good feature of the MT4 interface is that it can be customised according to your needs coupled with basic MetaQuotes language, a programming language enabling MetaTrader Software to create automated trading robots and financial market indicators.
MT5 has a similar interface to MT4 however contains more information. Some people (especially advanced traders) like this, however, others find it can result in too much information being crammed onto the screen. For example, the charting area is smaller and some of the retracement tools in the charts may not work as precisely as you would like.
When trading financial instruments, there are two types of markets you can trade in: centralised and non-centralised.
The forex exchange market is the largest and most liquid market for trading in the world. With a volume of over $5 trillion, it is so large that it cannot operate through a central exchange. Forex markets operate in a decentralised over the counter (OTC) manner where a huge range of different liquidity providers including banks, hedge funds, multinational corporations and even wealthy individuals are offering quotes to buy or sell currency pairs and leveraged products.
MT4 is built specifically for trading in decentralised markets. It would not be wrong to say MT4 is built for forex traders however you can also trade other contracts for difference (CFD) Pepperstone offer such as:
As MT4 is limited to decentralised markets only, MT5 was introduced to overcome this limitation. MT5 is a multimarket platform, which means both centralised and decentralised asset classes are available for trade. With MT5, in addition to CFDs available on MT4, Pepperstone offer Shares CFD. Pepperstone offers the following share CFDs:
While MT5 certainly offers more trading instruments than MT4, If you do not intend to trade Shares CFD (or other centralised derivatives which Pepperstone may or not offer in future such as futures) then there may not be a strong need to choose MT5 over MT4 when it comes to trading instruments.
MT4 is built to run only on 32-bit operating systems. MT5 can run is built for 64-bit operating systems. This means MT5 is faster than MT4. MT5 is a multi-threaded platform while MT4 is a mono-threaded platform. You can use MT5 on the 32-bit platform provided you have at least 4GB memory. If you are planning to use a virtual private system (VPS) then you will get significant benefits using MT5.
MT4 being mono-threaded has only one dedicated server, which means it has restrictions in its communication with other servers. MT5, on the other hand, can communicate with multiple other servers. These include trade server, backup server, access server, and history servers. MT5 works seamlessly with other servers which improve speeds, hardware efficiency and resource optimisation.
While MT5 is more efficient with its use of resources, it still can take up to 3 times more RAM space when we compare with MT4, which can mean a longer installation process.
MT4 being only 32-bit and mono-threaded means it is ideal if you have more basic hardware infrastructure. If your desktop has low memory or is using a windows version lower than Windows 0, then you may be better to use MT4 despite MT5 having the better capability.
MT4 has one of the largest marketplaces and codebases in the forex platform market. This is because of the high number of brokers that offer MT4 and many traders using the MT4 platform. Here traders can find a large number of EAs, add-on analytical tools and graphical tools which can help your trading experience.
MT5 marketplace and codebase, on the other hand, may not be as large as that on offer with MT4, does offer a marketplace that is growing fast and more conveniently an inbuilt tab on the platform that allows you to buy forex product directly. MT4 users need to visit MQL4.com to buy their products.
Pepperstone offers a large collection of options when it comes to social trading. This is one area that MT4 stands out over MT5. All Pepperstone trading tools are available with MT4, but your options are limited with MT5.
MT4 and MT5:
EAs are integrated programs in the trading terminal used for automation of trading and analytical processes. EAs are more broadly known as algorithmic trading or robots.
This platform has an integrated MQL4 IDE which allows you to build your advisors or robots. This is based on the MQL4 programming language. If you can’t write in MQL4, you can select pre-made algorithms through the ‘MetaTrader Market’ or the ‘Code Base’ library.
Like with MT4, MT5 also has EA integrated into its platform, but it uses the MQL5 MetaEditor. Here you can use MQL5 language to build your robots, scripts/algorithms and indicators. MQL5 is a superior language to MQL4, as is very similar to C++. As a result, the syntax used in MQL5 means you have unlimited possibilities with what you can do with it.
Early versions of MT5 did not have hedging. This is because MT5 was originally designed to be compliant with US National Futures Association (NFA) regulations, which do not allow hedging. Later versions of MT5 have since introduced hedging via an add-on. Hedging is a useful risk management tool as it allows you to hedge the opposite side to your position. Now that MT5 allows hedging one of the main reasons traders preferred MT4 is no longer applicable.
MT5 allows netting which is not built into MT4. This is because the netting is used with exchange trading (like shares CFD).
MT5 uses multi-threaded strategy tester, which is an improvement on MT4 which uses only single. What this means is you can run a backtest of multiple trading instruments simultaneously. Testing is run through MQL Cloud Network, which consists of thousands of computers interconnected to deliver the most efficient calculations possible for testing trading strategies.
With MT5, your backtest results will show in a report containing charts and graphs, and you can save this as an HTML file through your browser or as an Excel file. MT4 only allows saving as HMTL files.
Before choosing which platform to trade with, it’s important that you understand what your investment objectives are and how they match up with the offerings of MT4 and MT5.
Both platforms are popular for different reasons. MT4 was designed for forex trading, while MT5 is a multi-asset platform that offers both centralised and non-centralised markets, including shares. Click here to view the best MT4 brokers, or here for the top MT5 brokers.
cTrader and MetaTrader 5 (MT5) are both top platforms offering different trading tools and features. cTrader is predominately a forex trading platform, while MT5 provides access to both non-centralised and centralised financial markets including forex and shares.
The main difference between the two MetaQuotes platforms is MetaTrader 4 (MT4) was created mainly for forex trading, while MetaTrader (MT5) is a multi-asset trading platform with both centralised and decentralised markets.
Both MT4 and MT5 have Expert Advisers (EAs) for automated trading, yet MT5’s backtesting features can test multiple currency pairs at a time, while MT4 is restricted to single currency backtesting. When writing EAs, you use the MQL4 programming language on MT4 and MQL5 on MT5.
Additionally, MT5 offers a larger selection of advanced charting tools, with more timeframes, technical indicators and graphical objects for technical analysis.
Pepperstone was established in Australia but is regulated by multiple financial authorities around the globe. Depending on where you reside and the investor protections you want, you can sign up to one of the following Pepperstone Limited subsidiaries:
Regardless of the subsidiary you sign up to, the broker offers two trading account types with different pricing structures. The broker’s Razor Account offers ECN-style commission spreads, while the Standard Account provides access to commission-free trading and spreads. You can view the Pepperstone razor vs standard table to compare the two MetaTrader accounts Pepperstone offers.
Additional features available to all Pepperstone clients using MT4 and MT5 include:
Pepperstone UK is no longer able to offer retail investor accounts access to cryptocurrency markets. The FCA recently changed UK forex trading regulation banning retail traders from trading crypto products.
Justin Grossbard has been investing for the past 20 years and writing for the past 10. He co-founded Compare Forex Brokers in 2014 after working with the foreign exchange trading industry for several years. He also founded a number of FinTech and digital startups including Innovate Online and SMS Comparison. Justin holds a Masters Degree and an Honours in Commerce from Monash University. He and his wife Paula live in Melbourne, Australia with his son and Siberian cat. In his spare time, he watches Australian Rules Football and invests on global markets.