MT4 to MT5: Basic Guide
This article covers only the main changes that are important for an ordinary trader when moving from MT4 to MT5. It is not a complete technical description of the new platform, but an attempt to explain in simple terms the new logic and the basic concepts that most often cause confusion for users accustomed to MetaTrader 4.When MT5 was first introduced, one of the main differences from MT4 was the lack of the ability to simultaneously hold several independent positions on the same trading instrument (the so-called netting system). For many traders, this became a serious limitation because many trading strategies, especially grid strategies, are based specifically on opening multiple separate positions.
But later the situation changed, and MT5 introduced support for hedging accounts.
In simple terms, a hedging account allows you to hold several independent positions on the same instrument at the same time — just as it was possible in MT4. After hedging accounts were introduced, one of the main differences between the platforms disappeared for most traders.
In fact, the main difficulty when moving from MT4 to MT5 is not the trading itself, but the new terminology and the way trading history is organized. At the same time, MT5 has also introduced new capabilities that can be learned gradually as needed.
If you are used to MT4, you probably thought in terms of two main concepts:
- market order;
- pending order.
In MT4, the word "order" was often used to refer to the actual open trading operation.
In MT5, these concepts are strictly separated.
Now an order is exclusively an instruction sent to the trading server to perform a specific action.
For example, an order can be used to:
- open a position;
- close a position;
- place a pending order;
- remove a pending order.
In addition, the trading server receives separate requests to modify the parameters of existing trading objects, such as Stop Loss and Take Profit.
In other words, an order is not the actual open buy or sell. It is an instruction (command) that the terminal sends to the server.
What Is a Deal?
When the trading server executes an order, the result of this execution is recorded as a deal.
A deal is a record of the full or partial execution of an order that records an individual operation performed by the trading server.
In a simple case, an order is executed completely at once, and it corresponds to one deal.
It is important to understand that one order can be executed in several parts. For example, this can happen when there is not enough available volume in the market at the required price. This can be especially noticeable when executing large volumes. In this case, one order can correspond to several deals.
If the execution of a deal results in a new buy or sell being opened, a position is created.
The simplified sequence when opening a position looks like this:
Order → Deal → Position
At the same time, it is important to remember that an order can result not only in opening a position, but also in modifying or closing one. In the context of MT5, an order is simply an instruction.
What Is a Position?
A position is an open market contract (buy or sell) that exists on the trading account until it is closed.
A position is the object that a trader sees in the terminal as a currently open trade.
In MT4 terminology, a position in MT5 most closely corresponds to the concept of an "open market order." The main difference is that in MT5 there is a separate concept of an order — an instruction that results in the creation, modification, or closing of a position.
What Is a Pending Order?
A pending order is also an instruction sent to the trading server. The only difference is when it is executed:
- A market order is sent for immediate execution at the current prices.
- A pending order is stored on the server and waits for a specified condition to occur, such as the price reaching a certain level.
When the condition is met, the server activates and executes the pending order. After that, a deal (or several deals) is created and a position is opened.
Therefore:
- Order — an instruction to perform an action;
- Pending order — an instruction to perform an action when a specified condition occurs.
A pending order is not a separate entity. It is an ordinary order with deferred execution.
Another important difference in MT5 is the way trading history is organized.
In MT4, almost all information was available in one list. You could see closed market operations, their financial results, and the history of operations with pending orders in the same place.
In MT5, history is divided into several display modes, which can be switched through the context menu in the "History" tab:
- Positions
- Deals
- Orders
- Orders and Deals
Because of this, many users initially feel that working with history has become more complicated. Perhaps it has, but in reality, each display mode simply shows trading from a different perspective.
Position History
This is the most familiar mode. It shows information about closed positions, combining all operations related to them. It is convenient for quickly evaluating:
- where the position was opened and where it was closed;
- the final financial result (profit/loss);
- the swap and commission charged.
Deal History
This mode shows every executed operation separately. If a position was built up in several parts or closed in several parts, each operation will be displayed on a separate line.
This mode is necessary for detailed analysis of:
- actual execution prices;
- the volume of each part;
- the exact execution time;
- the intermediate financial result.
Order History
This mode shows all instructions sent to the server:
- instructions to open and close positions;
- placing and deleting pending orders;
- canceled and rejected requests.
It is useful when you need to check exactly which commands were sent to the server by the terminal or an Expert Advisor.
"Orders and Deals" Display
This is a tree-like report that combines orders and the results of their execution. It allows you to see the complete sequence of events: which order was sent, how it was executed, and which deals were ultimately created.
Because the new terminology no longer combines market positions and pending orders under a single concept, some traders, including myself, have to introduce new terms for convenience when describing trading algorithms.
For example, my Expert Advisor descriptions use the term "trading entity", where a trading entity means any active trading object currently existing on the account:
- an open position;
- a pending order.
In other words, the phrase "The Expert Advisor controls all trading entities" means that it works with both open positions and pending orders.
It is important to understand that deals and any other trading instructions are not trading entities.
After the introduction of hedging accounts, the differences between MT4 and MT5 became significantly smaller than is commonly believed, and for most traders, the main difficulties of moving to MT5 today are primarily related to learning the new terminology.
A short cheat sheet:
- Order — an instruction to the trading server to perform an action.
- Pending order — an instruction that waits for a specified condition to be met.
- Deal — a record of the full or partial execution of an order.
- Position — an open buy or sell that exists on the account.
- Trading entity — a general term for a position or pending order.
To sum up, MT5 is not a completely new trading system. It is an evolution of MT4 in which the different stages of the trading process have been given more precise names.
