Pepperstone MT4 vs MT5 Overview
|Pending Order Types||4||6|
|Order Execution Types||3||4|
|Order Fill Policy||Full||Full or Partial|
|Instrument Categories Available||5||6|
|Speed / Technical Specs||Fastest||Fast|
|Social Trading Choices||6||1|
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 worlds 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 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.
Technical and Analytical Tools Analysis MT4 vs MT5
|Number of Chart Types||3||3|
|Interactive Charts and Colour Schemes||✔||✔|
|Publish Charts Online||No||✔|
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:
Trend Indicators (these help you identify price direction):
- Bollinger Bands
- Standard Deviation
- Moving Average / Adaptive Moving Average
- Parabolic SAR
- Average Directional Movement Index
- Commodity Channel Index
Oscillators (these help identify market reversal points)
- Stochastics Oscillators
- Moving Average of Oscillator
- Awesome Oscillator
- Gator Oscillator
In addition to the above, there are a further 2000 free custom and 700 paid ones available though 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:
- Double Exponential Moving Average
- Triple Exponential Moving Average
- Triple Exponential Average
- Market Facilitation Index
Like MT4, you can access additional indicators through the MetaTrader code base and Market place.
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:
- Plotting Channels
- Gann Tools
- Fibonacci Tools
- Elliot Tools
- Graphical Objects
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:
- 11 types of minute charts
- 7 types of hourly charts
- daily time frames
- weekly time frames
- yearly time frames
|Pending Order Types||MT4||MT5|
|Number of Types||4||6|
|Buy Stop Limit||🗙||✔|
|Sell Stop Limit||🗙||✔|
With a ‘pending order,’ your order will open once your predefined 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.
- ‘Buy stop-limit’: a combination of a ‘buy limit’ and a ‘buy stop’. It is a ‘stop order’ when you place a ‘buy limit’. By placing a buy stop limit above the market price you can ensure you buy limit order is placed in the event your price reaches your order level.
- ‘Sell stop-limit’: works the same way as a buy stop limit but in reverse. A combination of a ‘sell stop order’ and a ‘sell limit’, when the bid prices reach the price target you have specified, a ‘sell limit’ order will be placed at the level you have specified.
Order Execution Types
|Partial Filling Policies||🗙||✔|
|Order Fill Policy||Fill or Kill||Fill or kill immediate or cancel return|
Unlike a ‘pending order’ which are 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. 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 own liquidity. These brokers will usually use instant execution.
Order Fill Policy
MT5, unlike MT4, allows for partial orders. With MT4, a trade will be fully 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.
Partial Order Filling Policy
In MT4 you only have a choice of two different types of order policies, these are fill or kill. This basically 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 cancel, if some of an order is not filled than 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 the interface. MT4 interface is known for being very user-friendly which makes it really good for beginner users, this is because the platform is designed 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.
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.
|Currency Index CFDs||✔||✔|
When trading financial instruments, there are two types of markets you can trade in: centralised and non-centralised.
MetaTrader 4 and non-centralised markets
The forex exchange market is the largest and most liquid market for trading in the world. With a volume of over $5 trillion, it is so large that it cannot operate through a central exchange. Forex markets operate in a decentralised over the counter (OTC) manner where a huge range of different liquidity providers including banks, hedge funds, multinational corporations and even wealthy individuals are offering quotes to buy or sell currency pairs.
MT4 is built specifically for trading in decentralised markets. It would not be wrong to say MT4 is built for forex traders however you can also trade other contracts for difference (CFD) Pepperstone offer such as:
- Forex (61+ currency pairs including majors, minors and exotics, leverage of 500:1)
- Hard Commodities
- Precious metals including Gold and Silver with a margin of 0.2% and spreads as low as 0.5pips
- Platinum and palladium with margin as low as 0.2% and spreads as low as 5pips for platinum and 44.5pips for palladium
- Soft Commodities
- 5 soft commodities including cotton, sugar, coffee, cocoa and orange juice with margin from 2$ and spreads as low as 4pips
- Oil and gas with spreads as low as 0.5pips
- Hard Commodities
- Cryptocurrency (5 different types of cryptocurrencies including Bitcoin/Cash, Ethereum, Dash and Litecoin commission free with leverage up to 5:1)
- Index CFD (14 major stock markets with no commission, indices include AUS200, Ger30, UK100, US500)
- Currency index CFD (USDX in which USD is measured against 6 combined currencies includes Euro, Yen and Pound, leverage of 100:1, margin of 0.2%)
MetaTrader 5 – Multimarket / Multi-Asset platforms
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
- 50+ of top listed companies in the United States
- Low brokerage of only AUD$7
- Leverage of 20:1
- Margin of 5%
CFD / Instruments conclusion
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.
Platform Speed and Technical Details
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 32-bit platform provided you have at least 4GB memory. If you are planning to use 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.
|Integrated Email||✔||✔ - can attach and zip documents|
|MyFxbook - Social Trading||✔||🗙|
|Economic Calendar||Available with Pepperstone Smart Trader Tools add on||Embedded for real time trading news|
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 a large number of 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.
Social Trading Tools
Pepperstone offers a large collection of options when it comes to social trading. This is one area that MT4 really stands out over MT5. All Pepperstone trading tools are available with MT4 but your options are limited with MT5.
MT4 and MT5:
- MetaTrader Signals – Available via the ‘signals’ tab in each platform this feature allows to automatically copy what other traders are doing in real-time. You will be able to access 3200+ free and commercial. One big benefit of using Signals is that has low fees and can even be free.
- Mirror Trader
Other Features (Expert Traders, Economic Calendars, Hedging, Testing)
|Economic Calendar||Available through Smart Trader Add-on||Integrated|
|Depth of Market||🗙||✔|
|Reports||Tables||Charts + Tables|
Expert Advisor (EA)
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 own advisors or robots. This is based on the MQL4 programming language. If you don’t have the ability to 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 own 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 does 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 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 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.