When selecting a broker, the platform that you can trade through them is often a decision maker as not all brokers will offer the same platforms. You also have cases where a broker just provides a feed via a bridge to a platform of your choosing but for most retail traders this would be unnecessary and it can also be dangerous if the connection is unstable and the connection breaks and leaves you in a position where you cannot trade. Although some brokers have their own proprietary platform for trading there are a few large platform providers that dominate the market.
MetaQuotes is one of the largest and most popular retail platform provider and offers 2 different platforms. At the start they release Meta Trader 4 which is the most well know retail forex platform and there is only a very small selection of brokers that do not offer this directly or in some sort of fashion. The new Meta Trader 5 platform is less common and many brokers have not wanted to adopt it and when they have it has been an addition to their MT4 offering.
MT5 was first released back in 2010 which was 5 years after the release of their MT4 platform after the MT4 platform had grown in popularity. When it first came out many people belied this was the new upgrade purely due to it going from 4 to 5 but this is not the case. If you have a look at the main functions they are essentially the same, you can still trade, back test and its graphic and user interface are also very similar. But it was designed with new features that are not offered on the MT4 which helps to aim it a different type of trader and market.
This makes the who debate of which platform is better redundant. The MT5 platform was designed for stock and commodities as it can be connected directly to exchanges whereas the original MT4 was designed to trade currencies and therefore needed no reason to connect to any exchanges. It can be assumed that MetaQuotes foresaw a retail stocks and commodities trading boom, and designed the software to fit that market.
The major difference that would put off all forex traders or even futures and commodities traders would be the fact that the MT5 platform was designed to be compliant with the USA no hedging rule which means it operates on FIFO rules. First In First Out means that if you go long say 1 lot and then you wanted to hedge that by going short 1 lot for a period it cannot be done. If you then proceed to sell the lot, it will close out the original trade so you can never be long and short in the same security. MT4 logs all trades separately which allows you to control each one and does not aggregate them together.
Overall the MT5 platform was designed for US stock traders due to its settings so if this is what you are looking to do it is the correct platform but if you are a Forex Trader MT4 is by far the more popular version.
One of the major improvements with the MT5 platform is its programming ability and back testing functionality. This platform uses the language of MQL5 compared to the MQL4 used by the MT4 platform. This offers a benefit as it allows a ‘black box’ style of coding which makes it easier to code and create frameworks. But more recently MetaQuotes has improved the MT4 and given it the ability to program in MQL5 coding so the difference has now been removed.
One thing that needs to be taken into account is the fact that anything coded for one platform such as an EA or indicator cannot be used on the other. This can stop a lot of traders as most of their software will then become redundant.
The only benefit still in place is with its improved back testing capabilities, which include being able to back test at a much faster speed as well as the ability to run simultaneous multi-currency pair back testing.
Which to Pick ?
The answer should now be obvious for most traders which are more appropriate for trading as they can both be used for different reasons but if you are trading something such as Forex the MT4 platform would be far superior. From my perspective although there are certain order types or functionality that you do not get, the ease of use, stability and extra software make it my choice of platform.