Fintech Wealthtech

The End of MT4 – What’s Next for Traders?

When the much-vaunted MetaTrader 5 (MT5) platform was officially launched back in June 2010, many expected it to replace and ultimately supersede its predecessor within the year.

As of August 2018, however, the MT4 platform remains entrenched as the retail trader’s mobile application of choice, with many refusing to make the transition to the upgraded software. This has prompted innovators MetaQuotes to take decisive action in recent times, by withdrawing all official support for the MT4 platform and removing its vanilla version from the marketplace completely,

In this post, we’ll ask why brokers and traders remain so invested with the MT4, while asking what its withdrawal means for the market?

Defying the Odds – What’s the Appeal of the MT4?

At first glance, the entrenched support for the MT4 platform at the expense of the MT5 becomes even more confusing.

This is especially true from a technological perspective, with the MT5 established as a far superior product. This platform is compatible with both 32-bit and a 64-bit operating systems, for example, making it ideally placed to optimise performance in the modern age.

In contrast, the MT4 was designed primarily for use on the 32-bit operating systems that dominated the market in 2005, meaning that the platform can appear slow and unresponsive on newer devices.

The order routing process is also extremely chaotic with the MT4, through which brokers are required to develop their systems in order to link directly to liquidity providers such as JP Morgan and Citibank. This type of system is considered to be restrictive and time-consuming, and hardly conducive to slick and intuitive trading.

The MT5 platform has corrected this by offering built-in functionality that can automatically integrate with the existing systems of major liquidity providers. As a result, the platform and its functions can be used off the shelf, creating a seamless and largely automated trading process for investors.

As if this was not enough, it’s important to note that the software behind the MT5 program can execute an unlimited number of simultaneous trades and manage huge order flows without compromising on performance. Conversely, the MT4 platform can only handle up to 10 million trades, which is hardly ideal for day-traders who high-frequency operators.

The Last Word – Why Have Users Struggled to Switch to the MT5?

When you consider these specification features alongside the larger number of technical indicators and increased market exposure offered by the MT5, the idea of choosing this app seems like a no-brainer.

So why have users been slow to adapt to this? In truth, we’ve seen reluctance form both brokers and traders, with the former required to apply for a new license and face an additional cost if they want to transition to the MT5 or offer both platforms to customers. Similarly, the MT4 has become something of an industry standard for safe and efficient trading, and brokers have leveraged this to appeal to their client base.

As for traders, they appear to have been gripped by the human instinct to resist change, while they have also become exceptionally comfortable when using this platform over time. Not only this, but the custom indicators inherent to the MT4 platform are littered throughout online forums and community trading boards, creating a popular trading methodology that can help investors across the board.

While this may be hindering the adoption rate for the MT5 platform, however, the decision to remove support and basic versions of the software will surely expedite this in the months ahead. As brokers are also forced to choose between offering the MT5 or the MT4 to traders, we’ll also see the latter gradually become a thing of the past.


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