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MT5 Platform Review

By admin | Friday, January 8th, 2010 | Forex EA Reviews

Public testing of the new MT5 platform commenced on October 12th, 2009.

MetaTrader5 is the long awaited next generation of the hugely successful MetaTrader4 trading system. MT5 is not just an upgrade to MT4. It has been completely reconstructed from scratch.

Here are the claimed features of Metatrader 5.

3 chart-types, twenty-one timeframes and over 70 analytical tools.
Five order types and four execution modes available for trading.
Implements virtually any trading methods.
Advanced inbuilt reports on all trading activities.
Built-in indicators and graphical objects allows quicker research of quotes and trade decision making.
High-performance and outstanding speed MQL5 development environment with new IntellySence system and more complicated strategy tester.

As most of you will know, Metatrader four ( MT4 ) is the most widely used ‘off the shelf’ platform in the currency trading and CFD markets. It is anticipated therefore that when MT5 is out of beta, it too will be widely used.

Today MT4 is the trading platform of choice for virtually all forex robots as well as custom indicators and scripts.

Unfortunately, the Metatrader4 language will not be compatible with MetaTrader 5 . To meet the incorporate the requested features and execution speed, a new object orientated programming language was developed. As a consequence, existing MT4 custom indicators and EAs ( .mq4 and .ex4 files ) will not work with MT5 platform.

You might be thinking that any new investment in MT4 custom indicators, scripts and androids is wasted. That’s definitely not the case. MT5 is likely to be in beta for a minimum of 6 more months. The current Mt5 beta doesn’t even include a method testing function. So it may be as long a year before any significant MT5 robots become available.

Even when MT5 has matured into a stable dealing platform, the surprisingly preferred MT4, is still going to be supported by brokers for several years to come. If traders demand it, brokers will support it. You can expect many brokers will be supporting both platforms and there’s nothing to stop you running both MT4 and MT5 clients at the same time.

It is only a matter of time before a MT4/MT5 compatibility is developed. Most likely this will be in the form of a compatibility module or MT4 virtualization plugin for MT5. Rather than recoding every MT4 indicator and EA for MT5, it is almost certain that some clever programmers will code a virtual MT4 plugin platform for MT5. Much like the way you can now run Windows in a virtual machine on a Linux box or Linux inside of OS X.

Once a tool is developed to convert existing Expert aides and indictors from MT4 to MT5, then the uptake of the MT5 platform will occur more quickly.

Here is the official statement about MQ4 and MQ5 compatibility:

‘From the start of Metatrader five development we believed that we’re going to be able to save the compatibility. And we said about it many times. But the countless traders/developers requests made us change our mind. We’ve understood that just can’t make a new language compatible. At the same time we have made MQL5 stronger and in this fashion we gave you, traders and developers, more abilities - that was our main goal in developing of MQL5 IDE. From one side, new language with the new abilities, and from the other side - MQL4 and MQL5 compatibility. Unfortunately, these two aims can’t be reached at the same time.’ Interview with Metrader5 lead developer

The complaint regularly heard about MT4 is it was built by programmers not traders. Definitely it was built with a spotlight on the front end and’client side’ instead of the brokers back office side. The platform itself evolved from a price and information delivery terminal that became very popular with traders. Users then started to ask whether trading functions might be built into it. Metaquotes employed the same architecture and added trading functionality to it, leading some to call MT4 a Frankenstein creation.

No Hedging and acceptance of the New NFA Rules.

Some may feel the NFA regulated forex brokers are driving the MT5 development. Others say the MT5 position/order management is to the benefit of the brokers not the traders. Afterall, it’s the brokers who pay for the Metatrader platform.

To meet Forex industry standards, MT5 changes the entire core of position handling. From this point on MT5 traders will be ready to keep only one position of any single trading instrument/currency pair. This reflection of orders aligns with the new FIFO ( first-in, first-out ) rule implemented by NFA as a sector standard in summer 2009.

Hedging at this point is eliminated and so is the separate management of 2 different in time orders on the same currency pair. Buying and Selling the same pair ( hedging method ) will result in nil positions being open.

For example : 9:00am Long GBP/USD 1 lot 1.3000, and later added 12:00pm Long GBP/USD two lots 1.3500, will be seen on Metatrader 5 account as one position’Long GBP/USD 3 lots’.

The first order to close is always the order that was initiated first, so it will always be the 8:00am Long position to close in our example above.

Is the FIFO and No Hedging a Show Stopper?

No individual orders listed, NO Hedging, and non-compatible with anything MT4. Is this a step BACKWARDS?

If you like the way MT4 works for you now and or have made the move to a non NFA regulated broker then MT5 doesn’t look a really attractive prospect.

However there’ll be other instruments and charts accessible beyond currency exchange. Like futures ( cfd-versions ) along with lots of option classes. Tons of chances for real-world hedging, ( i.e. Where the 2 instruments are not identical ) and for trading styles that are at present not possible. Like purchasing options on signals, instead of just going long or short the currency pair. Or creating forex grids with options.

Some traders have said that FIFO ( first order in first order out ) stops counter trend trading or joining in a fast scalp in the wrong way when you already have an open position. It doesn’t have effects on your net position but it affects the way you must manage your trades.

Correlation secrets are also a clear alternative way to hedge. Hedging a position can be achieved by taking position in more than one correlated currency pair. And in MT5 this should be extended to foreign exchange options and their underlying currencies or foreign exchange futures and their own options. Actually if you’re trading on more than one currency pair then currency correlations and their impact leverage and risk is something that needs to be well understood.