Certainly MT5 was far more improved over MT4. But still majority traders are using MT4........ - page 3

 
figurelli:
Good question, the main difference is that in MT4 you can decide a better no risk moment to pay the spread.

To picture the difference, we can think in a sequence that I think your table don't show.

Imagine you start with a buy position at P1 (Price 1).

But, unfortunately, price falls to P2 and you decide that your strategy fail and that it's necessary a new setup or even change it.

In MT5, your no risk decision is close the position and pay the spread to the broker.

However, in MT4, you can decide to open a no risk sell position at P2 (where P2<P1, same buy lot size), and wait for a better moment in the future to pay the spread to the broker.

And if the spread is high, as I stated before, this may be decisive, since spread and time are money.

 

Very good point. 
 
angevoyageur:

Not right, the difference is only on the way you perceive things, the result is exactly the same. Consider a numerical example (I wilfully neglects the spread for clarity) :

MT4

 Lot
Type
 OpenClose
Profit
Balance
Max/min Equity
 1. you started with 1.0 lot buy - your prediction was right and if price
go up again toward your open price of buy : 4 close at breakeven
1.0
Buy
1.3800
1.3800
 010 000
-2000
 2. sell stop below 100 pips of your buy position - after sell limit is hit,
say price go down another 100 pips : 3. you realize profit of your sell position
1.0Sell
1.3700
1.3600
 + 1000
11 000
+1000
  


+100011 000
 -1000 (9 000)
 Lot
Type
Price
Profit
Balance
Max/min Equity
 1. you started with 1.0 lot buy1.0
Buy
1.3800

10 000
 -1000
 2. sell stop below 100 pips of your buy position - sell limit is hit1.0
Sell
1.3700
 -1000
 9 000
 -
after sell limit is hit, say price go down another 100 pipsNo position
 3. you realize profit of your sell position - so you buy 1.0
1.0
Buy
1.3600

9 000
 +2000
 4. your prediction was right and if price go up again toward your open price
    of buy - close at breakeven - so sell 1.0
1.0Sell
1.3800
 +2000
11 000
 


    +100011 000
 -1000 (9 000)
Your profit is 1000, your max drawdown by Equity is -1000 up to 9 000. Same results, different perception. All is in your mind

Thanks for such a clear table to represent the sequence and this is really interesting discussion. As the figurelli's argument on no risk position remind me another point we maybe neglect here. In financial trading, there are two different type of people. First type try to predict market direction.  Second type try to react to market and never try to see anything in distant future (you may say price action people are in this group). 

When you are having both buy and sell position and your position is locked from any risk. The position become no risk as there is no upside or downside risk (In theory this is a perfect hedging where two assets with negative correlation (i.e correlation = -1.0) are held together).

Once you have no risk, you don't have to predict anything and just follow any market reaction and act accordingly. Worse case, you just close both position and that is your risk.

However with a single position rule in MT 5 case, your buy position does not have any coverage for the downside risk and it is not true "no risk trading" meaning that you have risk of wiping out your all account at worst case (of course, you can stop before wiping out your account. However you need to actively find out when to stop). With a single position, you have to foresee little bit more distant future to make any entry or exit decision even to "no risk trading" in MT 4 case.

So I referred to this as "short term prediction" in my previous post but may be the wording wasn't clear enough.

 
FinanceEngineer:

Thanks for such a clear table to represent the sequence and this is really interesting discussion. As the figurelli's argument on no risk position remind me another point we maybe neglect here. In financial trading, there are two different type of people. First type try to predict market direction.  Second type try to react to market and never try to see anything in distant future (you may say price action people are in this group). 

When you are having both buy and sell position and your position is locked from any risk. The position become no risk as there is no upside or downside risk (In theory this is a perfect hedging where two assets with negative correlation (i.e correlation = -1.0) are held together).

Once you have no risk, you don't have to predict anything and just follow any market reaction and act accordingly. Worse case, you just close both position and that is your risk.

However with a single position rule in MT 5 case, your buy position does not have any coverage for the downside risk and it is not true "no risk trading" meaning that you have risk of wiping out your all account at worst case (of course, you can stop before wiping out your account. However you need to actively find out when to stop). With a single position, you have to foresee little bit more distant future to make any entry or exit decision even to "no risk trading" in MT 4 case.

So I referred to this as "short term prediction" in my previous post but may be the wording wasn't clear enough.

Thanks FinanceEngineer, but if you have both buy and sell positions in MT4 and no positions in MT5, you have no risks in both cases, so I can't see any advantage about predict market direction.

I think the big differences are about timing dimension and not pricing dimension. In this sense, the table presented by Alain is very clear to any of this cases, since you can emulate with MT5 any sequence of positions of MT4 with exactly the same final profit. So, about pricing, I think exactly the same as Alain.

But talking about timing, I see several advantages of the MT4 approach, that we just can precisely emulate with MT5, using two accounts (the one just to buy and the one just to sell).

Choose the best time to pay the spread is one example, as I stated before. Another timing advantage example you can think are strategies for ranging markets after some news. In this case, you can start buy/sell positions in MT4 before the news, but in MT5 you must choose just one position or lose time and profit with pending orders.

Anyway, and regarding your topic, is this timing advantage of MT4 decisive when comparing to MT5 strategies using position system? My answer is no.

Why? Because in my opinion what is decisive today are multi-currencies strategies, and I think the position system of MT5 is easier to manage and test them, and this is for me the big advantage of MT5 against MT4 to create better strategies.

 
figurelli:

Thanks FinanceEngineer, but if you have both buy and sell positions in MT4 and no positions in MT5, you have no risks in both cases, so I can't see any advantage about predict market direction.

I think the big differences are about timing dimension and not pricing dimension. In this sense, the table presented by Alain is very clear to any of this cases, since you can emulate with MT5 any sequence of positions of MT4 with exactly the same final profit. So, about pricing, I think exactly the same as Alain.

But talking about timing, I see several advantages of the MT4 approach, that we just can precisely emulate with MT5, using two accounts (the one just to buy and the one just to sell).

Choose the best time to pay the spread is one example, as I stated before. Another timing advantage example you can think are strategies for ranging markets after some news. In this case, you can start buy/sell positions in MT4 before the news, but in MT5 you must choose just one position or lose time and profit with pending orders.

Anyway, and regarding your topic, is this timing advantage of MT4 decisive when comparing to MT5 strategies using position system? My answer is no.

Why? Because in my opinion what is decisive today are multi-currencies strategies, and I think the position system of MT5 is easier to manage and test them, and this is for me the big advantage of MT5 against MT4 to create better strategies.

There are several interesting points here. You also mentioned that you can precisely emulate MT 4 risk trading with MT 5, using two accounts (the one just to buy and the one just to sell).

That is good one. Just one more thing here I want to add under assumption that we can use only single MT 5 account. With "MT 4 no risk trading with buy and sell position", you are left with two exit decisions.

On the other hands, with MT 5 "no risk trading from do nothing", you are left with one entry and one exit decision to make even trading path to MT 4 case. Hardness of Entry decision and exit decision are similar on the pure statistical points assuming 50% go up and 50% chance go down.

However in terms of order execution uncertainty,  your order sending method actually matters more with entry than exit. With exit you can simply close all the position. Not too much concern. However with entry, there is more risk involved. Maybe two factors are important here. If firstly your order are executed with correct lot size and then secondly the spread.  

For example, we found several forums with multiple order entry and https://www.mql5.com/en/forum/16492 and I also witnessed many times these multiple order entry with some specific brokers. Entry is more stressful than exit.

So  overall, two exits of MT 4 is easier than one entry and one exit of MT 5.

One final thing I wanted to point is in terms of grid trading. Say you opened up 10 buy positions in 5 pip deviation. With MT 4, you have 10 separate positions showing you which positions are in profit and which of them are in loss.

However in MT 5, you only get one profit and loss. This make me difficult to cut the losing positions from where. Stop loss in MT 5 won't necessarily emulate the same result for this case because each of position entered in different timing.

or to emulate this in MT 5, you may have to trace your profits and losses for each position with your own code and calculate the precise stop loss.

Kind regards.

My EA does a double entry
My EA does a double entry
  • www.mql5.com
01 EURUSD at market placed for execution in 331 ms.
 

Good points here,

 

I just want to add my main dissatisfaction with MT5 is from the limitation in Magic Number Analysis, unlike in MT4. With MT4 from only one account, you can set up multiple EAs on say a demo and evaluate their trading performance in order to pick a trading method. But with MT5 you need a new broker account for each which in turn means you need a new instance of metatrader on your VPS for each which not only consumes a lot of resources on that VPS, but could mean you actually need to hire other VPS.

I think in summary MT5 was an over reaction to the economic 'blips' of '08. And even the often harsh reactionary regulation that gets put in place after such events (e.g. the Bretton Woods') often gets reversed eventually. Since MT4 is now 'OOP-complaint' there is little reason to stick around MT5. Just my opinion  :-) ….

 
FinanceEngineer:

myfxbook or any other major forex site does not support MT5. It is shame that MT5 is still less popular than MT4.

I was trying to upload my statement on myfxbook using MT5 and they provided some bridging software in beta version for MT5 to read my account info from my MT5 terminal.

The bridging software was totally miscalculated my trading summary but they do provide perfect service for MT4. I asked the site staff for help but no response for 5 days. Other major forex site does not even provide any support for MT5.

It is little shame as I do not want to go back to MT4 anymore..... 

I will be honest right here. I can't trade grids with Mt5. Hence I don't use it. I want to trade separate, non-averaged, non fifo, trades.
 
ssn:

Good points here,

 

I just want to add my main dissatisfaction with MT5 is from the limitation in Magic Number Analysis, unlike in MT4. With MT4 from only one account, you can set up multiple EAs on say a demo and evaluate their trading performance in order to pick a trading method. But with MT5 you need a new broker account for each which in turn means you need a new instance of metatrader on your VPS for each which not only consumes a lot of resources on that VPS, but could mean you actually need to hire other VPS.

I think in summary MT5 was an over reaction to the economic 'blips' of '08. And even the often harsh reactionary regulation that gets put in place after such events (e.g. the Bretton Woods') often gets reversed eventually. Since MT4 is now 'OOP-complaint' there is little reason to stick around MT5. Just my opinion  :-) ….

Thanks for sharing this. I didn't know MT 4 was supporting OOP. That is good news. I also started to do some coding again using MT 4. I should play with OOP in MT 4.
 
FinanceEngineer:
Thanks for sharing this. I didn't know MT 4 was supporting OOP. That is good news. I also started to do some coding again using MT 4. I should play with OOP in MT 4.
Actually, the only difference I can see today between MT4 and MT5 are business rules, since the kernel and core are now, probably (as this is my opinion), the same.
 
PzTrading:
I will be honest right here. I can't trade grids with Mt5. Hence I don't use it. I want to trade separate, non-averaged, non fifo, trades.
Ironically there is few Grid EAs in MT 5. How do they do that? Just curious if they has the same performance as their MT 4 version....
 
FinanceEngineer:
Ironically there is few Grid EAs in MT 5. How do they do that? Just curious if they has the same performance as their MT 4 version....
Hi FinanceEngineer, we must indeed beware of such EAs, and how they are coded, anyway it's possible use virtual orders management (VOM emulating MT4) and pending orders trying to replicate the same performance.
Reason: