Introduction
MetaTrader 5, commonly referred to as MT5, is a sophisticated, multi-asset trading platform that offers trading in forex, stocks, futures, and CFDs (Contracts for Difference). MT5 is the successor to MetaTrader 4 (MT4) and was developed by MetaQuotes Software Corp. While MT4 primarily focuses on forex trading, MT5 supports a broader range of asset classes, making it a more versatile platform for traders.
In this comprehensive article, we will explore the features of MT5, how it compares to MT4, and how traders can use MT5 for forex trading. We’ll also discuss the advantages and disadvantages of the platform, along with tips for getting the most out of it.
What is MT5?
MetaTrader 5 (MT5) is an online trading platform developed by MetaQuotes Software in 2010. It was designed as a multi-asset platform for trading various financial markets, including forex, stocks, and commodities. Although MT5 is often compared to its predecessor MT4, it offers more advanced features and functionality, such as enhanced charting tools, additional order types, and a broader range of timeframes.
While MT4 is popular for forex traders due to its simplicity and focus on currency pairs, MT5 caters to traders looking for more variety in trading instruments. MT5 is not only built for forex, but it is also ideal for stock traders, commodity traders, and futures traders.
Differences Between MT4 and MT5
The debate between MT4 and MT5 has been ongoing since the release of the latter. While both platforms serve forex traders, MT5 introduces advanced features that cater to more sophisticated and diverse market participants.
Key Differences:
| Feature | MetaTrader 4 (MT4) | MetaTrader 5 (MT5) |
|---|---|---|
| Trading Instruments | Forex | Forex, Stocks, Commodities, CFDs |
| Order Types | Limited | Advanced (Buy Stop Limit, Sell Stop Limit) |
| Timeframes | 9 | 21 |
| Hedging Support | Yes | Yes |
| Market Depth | No | Yes |
| Programming Language | MQL4 | MQL5 |
| Built-in Economic Calendar | No | Yes |
MT5 Advantages Over MT4
- Diverse Asset Classes: MT5 allows trading not just in forex but also in stocks, commodities, and futures.
- More Advanced Order Types: Traders have more options for controlling their trades, such as stop-limit orders.
- Faster Execution: MT5’s 64-bit architecture means faster processing times.
- Integrated Economic Calendar: Traders can stay informed about upcoming economic events without leaving the platform.
MT5 Features
MT5 is a feature-rich platform offering a variety of tools and functions to enhance the trading experience.
Trading Instruments
MT5 supports multiple asset classes, making it a great tool for traders looking to diversify their portfolio. In addition to forex, traders can access stocks, commodities, indices, and cryptocurrencies (depending on the broker).
- Forex Trading: MT5 offers access to major, minor, and exotic currency pairs.
- Stocks and Indices: Traders can speculate on price movements of various global stocks and indices.
- Commodities and Metals: Gold, oil, and other commodities can be traded.
- Cryptocurrencies: Bitcoin, Ethereum, and other digital currencies are available on some brokers’ MT5 platforms.
Charting Tools
One of MT5’s standout features is its advanced charting capabilities. Traders can view up to 100 charts simultaneously and use more than 80 technical indicators and graphical tools. These charts are customizable, allowing traders to adapt them to their strategies.
MT5 offers 21 timeframes compared to MT4’s 9, making it possible to analyze market data over both short and long periods. Whether you’re a scalper or a long-term investor, MT5’s charting flexibility is unparalleled.
Table: Timeframes Available in MT5
| Chart Type | Timeframes |
|---|---|
| Tick | Tick chart |
| Minute | 1m, 5m, 10m, 15m, 30m |
| Hourly | 1H, 4H, 8H |
| Daily | 1D, 2D |
| Weekly | 1W |
| Monthly | 1M |
Order Types
MT5 introduces more advanced order types, allowing traders to have more control over how they enter and exit trades. In addition to market, limit, and stop orders, MT5 offers Buy Stop Limit and Sell Stop Limit orders, which are hybrids of stop and limit orders.
This advanced functionality allows for more precise entry and exit points and better risk management.
Timeframes
As mentioned earlier, MT5 offers 21 timeframes, compared to MT4’s 9. This enables more detailed analysis, helping traders identify trends and make informed decisions.
Expert Advisors (EAs) and Algorithmic Trading
Like MT4, MT5 supports Expert Advisors (EAs), which are automated trading systems that can trade on your behalf based on predefined criteria. However, MT5 uses the MQL5 programming language, which is more powerful and flexible than MQL4.
For algorithmic traders, MT5 also includes a strategy tester that allows backtesting of trading strategies using historical data, providing an essential tool for traders looking to optimize their strategies.
How to Set Up MT5 for Forex Trading
Using MT5 for forex trading is straightforward, but it does require a few steps to get started.
Opening an Account
The first step is to open a trading account with a broker that supports MT5. You can choose between a demo account (for practicing) or a live account (for real trading). Make sure your broker offers favorable trading conditions, such as low spreads and fast execution times.
Downloading and Installing MT5
Once you have an account, download the MT5 platform from your broker’s website or the official MetaQuotes website. MT5 is available for Windows, macOS, and mobile devices (iOS and Android). Download
Setting Up Your Workspace
After installing MT5, you’ll want to customize the workspace to suit your trading style. This includes:
- Adding currency pairs to your market watch list
- Customizing charts with your preferred indicators and timeframes
- Setting up EAs for automated trading
- Configuring risk management tools, such as stop-loss and take-profit levels
MT5 Trading Strategies for Forex
Forex traders use a variety of strategies on MT5, depending on their risk tolerance, experience level, and trading goals.
Scalping
Scalping is a short-term strategy that involves making multiple trades to capture small price movements. MT5’s fast execution speed and advanced charting tools make it ideal for scalpers who rely on precision.
Swing Trading
Swing trading is a medium-term strategy where traders aim to capture price swings over several days or weeks. MT5’s extensive timeframes and technical indicators make it easier to analyze long-term price movements and trends.
Hedging
MT5 supports hedging, which allows traders to open multiple positions on the same currency pair in opposite directions. This can be useful for mitigating risk in volatile markets.
Algorithmic Trading
MT5’s support for algorithmic trading allows traders to develop and use EAs for automatic trading. Traders can either create their own EAs using the MQL5 programming language or purchase them from the MT5 marketplace.
Advantages of Using MT5 for Forex Trading
MT5 offers several advantages for forex traders:
- Multi-asset Trading: Trade not only forex but also stocks, indices, commodities, and more.
- Advanced Charting Tools: Over 80 technical indicators and 21 timeframes allow for comprehensive market analysis.
- Improved Order Types: Advanced order types such as Buy Stop Limit and Sell Stop Limit allow for more flexibility.
- Economic Calendar: Stay informed on upcoming economic events directly from the platform.
- Algorithmic Trading: Develop and implement automated trading strategies using EAs.
Disadvantages of Using MT5
Despite its many advantages, MT5 may not be suitable for all traders.
- Complexity: The platform’s advanced features can be overwhelming for beginners.
- No MQL4 Compatibility: Expert Advisors developed for MT4 won’t work on MT5, which can be an issue for traders who want to switch.
- Limited Broker Support: Some brokers still focus on MT4, which has been more widely adopted in the forex trading community.
MT5 vs Other Trading Platforms
While MT5 is one of the most advanced platforms available, it faces competition from other trading software such as:
| Platform | Features | Best for |
|---|---|---|
| MetaTrader 4 (MT4) | Simple interface, focused on forex | Beginner forex traders |
| cTrader | Advanced charting, order types, depth of market | Professional and algorithmic traders |
| NinjaTrader | Futures and forex trading, backtesting | Futures traders, algorithmic traders |
Each platform has its strengths and weaknesses. However, MT5’s combination of multi-asset support, advanced features, and flexibility makes it a strong contender, especially for forex traders looking for versatility.
Conclusion
MetaTrader 5 is a robust and versatile platform that offers a wide array of features for both beginner and experienced forex traders. With support for multiple asset classes, advanced charting tools, and algorithmic trading capabilities, MT5 stands out as a comprehensive trading solution.
While the platform has a steeper learning curve than MT4, its enhanced functionality makes it well worth the investment for traders looking to diversify their portfolios or employ sophisticated trading strategies.
Whether you’re scalping, swing trading, or developing your own Expert Advisors, MT5 offers the tools necessary to succeed in the fast-paced world of forex trading.
M Mohsin Sher is the CEO of Forex Jungle and the creator of the popular Forex Sekho YouTube channel. 🎥 An experienced forex trader, content creator, and social media marketer, Mohsin is dedicated to empowering others in the world of forex trading. With a strong focus on education and financial literacy, he simplifies complex trading concepts, making them accessible to traders of all levels. 📊 Follow Mohsin to learn the secrets of successful trading and stay ahead in the forex market! 🚀
