MetaTrader 5 (MT5) is considered one of the most widely used trading platforms. But, could it finally replace MetaTrader 4 (MT4) as the go-to platform?

MT5 Take Over MT4

MetaQuotes Software launched MetaTrader 5 (MT5) back in 2010. Despite adding new features and advantages compared to its predecessor, MetaTrader 4 (MT4) has remained the favorite among brokers and traders for many years.

However, the Russian software company recently announced that many companies using MT5 had surpassed MT4 users. This is an achievement for MetaQuotes, as the takeover has been initiated for about 11 years.

According to experts, there are two important points to see whether MT5 can take over MT4. Those are: 

  1. Qualities: MT5 has better quality considering this version support cross-market trading features.
  2. Market domination: MT4 is still dominating the trading industry.
  3. Future: Most would argue that the broker will eventually switch to MT5, considering it's more updated.

For some information, the point above is written according to the review of some experts. Those are Deepak Jassal, an executive director of M4Markets, and Michał Karczewski, Co-Founder and CEO of Match-Trade Technologies.

So, what changed? Will MT5 outperform MT4? Check out the complete review below.

 

MT5 Superior Qualities over MT4

MetaTrader 5, or MT5, is undoubtedly a superior trading platform to MT4. This version supports cross-market trading features compared to MT4, which only maximizes CFD and forex trading.

In addition, the MT5 platform provides better control to users as it is equipped with an STP Gateway and is not too dependent on third-party plugins. This allows any MT5 broker to directly connect with other MT5 brokers for liquidity.

So, what does the expert say about this phenomenon?

 

1. Renat Fatkhullin

Renat Fatkhullin, the CEO of MetaQuotes Software Corp, has been actively encouraging traders to consider shifting to the MT5 platform due to its exciting new features. He emphasizes that one of the critical highlights is the hedging option now available on MT5. While the inclusion of hedging depended on local jurisdictions, MetaQuotes successfully found a solution to introduce this functionality last month.

With MT5's hedging option, clients can set different closing parameters for multiple positions, eliminating the need to create separate entry orders for each trade.

Additionally, the platform introduces a handy "Close By" feature, allowing traders to link two open positions in opposite directions to reduce spread costs.

Fatkhullin underlines the convenience of MT5, stating, "Why use two platforms when you can access all the required functionality in one?"

He emphasizes that MetaTrader 5 caters to diverse financial markets with specific features, offering a netting trading system for exchange traders and a familiar hedging mode for forex traders.

As a result, traders can enjoy an all-in-one solution to meet their trading needs effectively and efficiently.

 

Deepak Jassal

Deepak Jassal, Executive Director of M4Markets, also said that MT5 has better technological advances for traders. 

"The main benefit we see of MT5 is the technological updates done by MetaQuotes. That makes it much more versatile for our traders," Deepak Jassal told Finance Magnates.

"Because of the technology that powers it, MT5 has a lot more capabilities, and it simply offers more trading tools to the user. It should be the tool of choice for traders," he added.

 

Andreas C. Kapsos

Andreas C. Kapsos, Managing Director of Match-Prime Liquidity, believe that despite the push from developer to switch towards MT5, people still prefer MT4 above all. That being said, he believes that people will soon move on from MT4 to MT5.

"Although many traders continue to use MT4 because of its familiarity and because it's been around for so long, it has been the go-to platform for all of us. I expect things to start changing, and more traders will opt for MT5 as brokers transition clients to it," he said.

 

Michał Karczewski

Meanwhile, Michał Karczewski, Co-Founder and CEO of Match-Trade Technologies, explained:

"From the broker's perspective, it can be the recent question of pricing... After MetaQuotes has changed its pricing policy and has waived off the license and setup fees for white label platforms, the monthly cost of the MT5 platform is significantly lower than the MT4 fee, though it comes with certain restrictions." Karczewski said.

Michal said he understands why MT4 still has a strong fanbase in the industry. The MT4 platform is notably easier to manage, particularly for beginner brokers. On the other hand, while the initial cost of the full MT5 Server starts from $5000, this basic package lacks essential features such as a data feed and a bridge to connect liquidity.

Although technically superior, MetaQuotes did struggle to enforce the MT5 upgrade among its related brokers due to many traders' reluctance to switch from MT4. As a result, the company stopped selling MT4 in January 2018 and drastically changed its pricing, making the MT5 platform much cheaper than the old version.

 

MT4 Still Dominates the Market

Despite all efforts, it remains difficult to beat the dominance of the MetaTrader 4 platform to this day. According to data from Finance Magnates Intelligence, 84.5 percent of trading volume distribution on the MetaQuotes platform was dominated by MT4 in Q4 of 2020. Meanwhile, MT5 only managed to gain the remaining 15.5 percent.

In addition, MT4 dominated about 66 percent of the market share at the end of 2020. On the other hand, MT5 and other platforms only took 12.7 and 21.3 percent, respectively.

Although these figures were only collected from a few brokers and did not represent the entire industry, they could indicate the traders' tendencies and preferences for trading platforms.

"MT4 is a cult platform, and its release in 2005 was a breakthrough on the forex market; therefore, its successor, despite evident improvements, needed many years to match this success," said Karczewski.

MetaQuotes, of course, announced the latest dominance of MT5. But the figures were only for companies using MT5, not the executed trading volume.

Karczewski added that many brokers chose to add MT5 with the existing MT4 platform. "Brokers who already have the MT4 platform do not transfer to MT5; instead, they purchase MT5 as a second platform to give their clients a choice," explained Karczewski.

 

MT5 Will Eventually Take Over MT4

The trading industry remains optimistic about the future of MT5. The growing acceptance can be indicated by the 7 million lines of code written on MT5, whereas the previous version could only reach 2 million. Andreas C. Kapsos, Director of Match-Prime Liquidity Management, stated, "Yes, currently, MT4 is still popular among both old school and new traders; however, we believe that traders will move from it shortly."

With the discontinuation of support and development for MT4 by MetaQuotes, brokers and traders will inevitably have to switch to MT5 if they want to use an updated trading platform. MetaQuotes further stated that they plan to introduce "many important and useful updates" on MT5.

 

So, When Will MT5 Take Over Happen?

When exactly MT5 would take over the market is still uncertain. Slow but sure, Karczewski mentioned that MetaTrader 5 would eventually dominate as the standard go-to trading platform.

"MetaQuotes has been striving to extinguish the MT4 platform for a long time... They have not been developing or supporting it for years, the sale of MT4 Servers has also ended, so this is a natural result of the adopted strategy. However, I can see several reasons why MT4 WL is still very popular," said Karczewski.

According to him, several fundamental factors that make it hard for traders to move on from MT4 are easy management, especially for novice brokers, and the basic package of the MT5 server that does not yet include all the necessary features, such as data feeds or a bridge to connect liquidity.

 

Despite some concerns, MetaTrader 5 brings various innovations that make it superior to MetaTrader 4. One of them is more order variations for advanced trading execution.