MetaTrader 4 – also known at MT4 – is the most popular trading platform in the world. Developed by Metaquotes in 2005, it dominates the world of forex offering a fully customisable platform that can be understood by even novice traders. But, with new solutions emerging in the industry, will MT4 be able to hold its ground through the next decade? Or, will it become a relic of years gone by undeserving of a leading role in 2020 and beyond? Let’s delve deeper.
Why is MetaTrader 4 so popular?
In order to understand MT4’s future, it’s important to analyse why it’s so popular among retail traders and brokers alike. Indeed, MT4 is so engrained into trading history that Metaquotes has had a very difficult time pushing the MT5 platform, which was built to be MT4’s successor.
- Exceptional usability
MetaTrader 4 offers a unique combination of functional complexity and exceptional usability. This means that’s while it’s technologically advanced and capable of performing a wide range of complicated functions, it’s also user-friendly – even for novices.
- Market analysis made easy
MT4 offers users three popular chart types – line charts, bar charts and candlestick charts – which give traders an in-depth look at a situation. The market can also be analysed from the perspective of nine different timeframes and there are drawing tools which allow traders to analyse specific segments of a chart in more detail.
MT4’s technical analysis tools make it possible to identify and confirm trends. Over 50 indicators are built into the MT4 platform. What’s also useful is that there are thousands of programmers who create robots, indicators and other tools that can be installed directly on the MT4 platform.
- Automated trading feature
The automated trading feature is another key advantage of the MT4 platform. This makes it possible to trade with the help of robots known as Expert Advisors. Robots of this kind can analyse currency quotes and execute trading operations. Algorithms will open and close trades on your behalf according to a list of set parameters. This helps to reduce human error and emotion-based trading.
MT4 Phase Out and Increased Competition
It’s easy to see why MT4 is so popular. It has lots going for it. But there are many reasons as to why MT4 might not stand the test of time. Let’s look at a few.
- MT4 licences not available to new brokers
In a bid to promote MT5, Metaquotes announced at the start of 2018 that it’ll no longer sell the MT4 trading platform. Licenses are now unavailable to new brokers; however, it can still be used by existing customers. That said; brokers who already use the software are not able to expand their operations on the platform as no new servers will be issued in any capacity.
A statement from Metaquotes read: “The architecture was designed under the limitations of a different time, due to which it is no longer possible to implement new features that should meet nowadays increased requirements of the industry or the brokers and traders demands.”
- A push towards MT5
While many people see MT5 as an inconvenient upgrade pressuring them to make changes, it’s actually built on completely different software. With the phase out and discontinuation of MT4, the focus is on MT5 adoption which simultaneously highlights MT4 weaknesses. Differences include:
- MT4 was initially built to trade currency pairs. MT5, in contrast, is designed to trade multiple assets which include forex pairs, CFDs on indices, commodities, stocks and cryptocurrencies.
- MT5 offers additional features. MT4 has 9 timeframes whereas MT5 has 21 allowing for more in-depth market analysis.
- MT5 also has an embedded community chat function, an economic calendar, the ability to transfer funds between accounts, partial order filling and immediate fill or kill.
- MT5 has a Depth of Market (DOM) tool. This indicates the various prices at which there is buying and selling interest, and the corresponding trade volumes at each price. This helps traders to understand the market flows.
While technology such as cTrader and NinjaTrader are also popular among forex traders, it’s the shift between MT4 and MT5 which likely poses an immediate threat to MT4.