Nowadays, people have access to some of the best trading platforms that have ever existed. And, it didn’t take long for the evolution from simple technology like MetaTrader4, which came out in 2005. Just five years later, the same company debuted its MT5 product to much fanfare. It was a hit with traders all over the world and launched a second wave of tech development for trading software. Since then, online brokerages have enjoyed their golden age, with some of the world’s largest online operations eclipsing anything in the brick and mortar category. Twenty years ago, placing a trade online was considered an unusual thing to do. Now, when someone buys or sells a security, it’s assumed that they did the deal online.
For anyone shopping around for a trading platform, there are two important questions to ask: what’s the difference between MT4 and MT5, and how do they compare to some of the better proprietary platforms available from individual brokers? Note the key difference between two kinds of software. One is a retail product, developed by companies that sell the technology to brokerage firms, who in turn let their own customers use it. The second kind is called proprietary software. Prop products are offered only to the clients of a specific broker. Here’s a rundown of what everyone should know about MT4, MT5, and the best proprietary platforms. Use the information to make a decision about what’s right for your style of trading.
MT4 vs MT5
These retail products are available to buy, if you want or need to have your own portable version. Many mainstream brokerage firms offer access to one or the other for all their customers. Note that some firms let you choose among MT4, MT5, the firm’s own prop product, and several other retail ones. However, for average sized and smaller firms, customers typically have no choices. They are forced to use whatever that broker offers. The main difference between the two MetaTrader products is that MT4 is a bare bones affair that is mostly used for forex and nothing else. MT5 is a full-blown platform that can be used in almost any market, has many more time-frames, better charting capability, enhanced visualization of trades, and the ability to buy and sell cryptocurrencies. So, why does anyone still use MT4? It uses just a tiny amount of bandwidth and thus offers extreme server stability.
Proprietary Platforms: Unique Advantages
No matter how good retail platforms are, and some are excellent, they usually can’t compete with the level of customization offered by a given broker’s proprietary system. While broker-specific platforms are not portable, that one drawback means little to people who have found the firm they’re comfortable with. It’s also possible to use either of the MetaTrader versions with many of the world’s largest brokerage firms. But when it comes to prop platforms, the ones unique to a particular firm, traders have many reasons to use them, including the following:
- Functionality: through your own trading firm, you’ll usually get access to a prop system that offers wider functionality than any retail product. That’s because firms work hard to retain customers and want them to be happy. They often hire software engineers to tweak and otherwise customize all the settings you use in your daily activity of buying and selling.
- Better User Interface and Experience: if you’re a fan of easy user-interface and a smooth, hassle-free user experience, individual firms go the extra mile to make every transaction as simple and error-free as possible. If there’s a problem, contact customer service to resolve it. That’s just not possible with retail systems.
- Customized alternatives: many investors want alternatives to platforms like MT4 and MT5, two of the most popular portable stand-alone options. Whether you need specialized interactive visualization, proprietary filtering components, unique charting capabilities, and more. Many online brokers offer their own proprietary platforms and a significant number of their customers choose the in-house version over the likes of MT4 and MT5. Traders need to spend time doing side-by-side comparisons between what their brokers offer and what they can get from a portable platform. Pay attention to the kind of charting, research, and other features you’ll have access to under each of the systems and then make a decision.
- Complex Strategy Visualization: prop systems are excellent at allowing complicated scenarios and complex strategies. Some of the stand-alone versions do offer a certain level of complexity, but owners of firms have an incentive to provide this level of service to paying customers.
No matter your level of experience, take the time to evaluate all your options and select either a retail product or a proprietary one.
