Metatrader5 Review
Public testing of the new MT5 platform started on October 12th, 2009.
MetaTrader5 is the keenly anticipated new generation of the hugely successful MetaTrader4 dealing platform. MT5 isn’t just an upgrade to MT4. It has been fully 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 almost any trading methods.
- Advanced in-built reports on all trading activities.
- Built-in indicators and graphical objects allows quicker research of quotes and trade decision making.
- High-performance and excellent speed MQL5 development environment with new IntellySence system and more complicated system tester.
As most of you’ll know, Metatrader 4 ( MT4 ) is the most widely used ‘off the shelf’ platform in the currency trading and CFD markets. It is predicted therefore that when MT5 is out of beta, it too will be widely used.
Today MT4 is the trading platform of choice for just about all currency exchange 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 result, existing MT4 custom indicators and EAs ( .mq4 and .ex4 files ) will not work with MT5 platform.
You may be thinking that any new investment in MT4 custom indicators, scripts and bots is wasted. That is actually not correct. MT5 is likely to be in beta for a minimum of 6 more months. The current Mt5 beta doesn’t even include a strategy testing function. So it could be as long a year before any significant MT5 androids become available.
Even when MT5 has matured into a stable trading system, the surprisingly preferred MT4, is still going to be supported by brokers for many years to come. If traders demand it, brokers will support it. You can expect many brokers will be supporting both platforms and there is zilch 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 can 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. Very like the way you can now run Windows in a virtual machine on a Linux box or Linux inside OS X.
Once a tool is developed to convert existing Expert Advisors and indictors from MT4 to MT5, then the uptake of the MT5 platform will occur more quickly.
Here is the official announcement about MQ4 and MQ5 compatibility:
‘From the start of Metatrader five development we thought that we will 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 more powerful 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. Sadly, these 2 aims can’t be contacted at the same time.’ Interview with Metrader5 lead developer
The complaint often heard about MT4 is that this was built by programmers not traders. Definitely it was built with a focus on the front end and’client side’ rather than the brokers back office side. The platform itself evolved from a price and info delivery terminal that became extremely popular with traders. Users then started to ask whether trading functions might be built into it. Metaquotes exploited the same architecture and added trading functionality to it, leading some to call MT4 a Frankenstein creation.
No Hedging and observance of the New NFA Rules.
Some may feel the NFA regulated forex brokers are driving the MT5 development. Others are saying the MT5 position/order management is to the benefit of the brokers not the traders. Afterall, it is the brokers who pay for the Metatrader platform.
To meet Forex industry standards, MT5 changes the whole core of position handling. From this time on MT5 traders will be able 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 about that point is eliminated and so is the separate management of two different in time orders on the same currency pair. Purchasing and Selling the same pair ( hedging strategy ) will result in 0 positions being open.
For example : 9:00am Long GBP/USD one lot 1.3000, and later added 12:00pm Long GBP/USD two lots 1.3500, will be seen on Metatrader five account as one position’Long GBP/USD 3 lots’.
The first order to close is always the order that was initiated first, so it’ll 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 INCOMPATIBLE 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 engaging prospect.
However there’ll be other instruments and charts accessible beyond foreign exchange. Such as futures ( cfd-versions ) together with lots of option classes. Tons of possibilities for real-world hedging, ( i.e. Where the 2 instruments are not identical ) and for trading styles that are at present impossible. Such as 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 engaging in a fast scalp in the other way when you already have an open position. It doesn’t affect your net position but it does affect the way you may manage your trades.
Correlation techniques are also a noticeable alternative way to hedge. Hedging a position can be done by taking position in more than one correlated currency pair. And in MT5 this could be expanded to currency exchange options and their underlying currencies or currency exchange futures and their own options. Actually if you are trading on more than one currency pair then currency correlations and their impact leverage and risk is something that must be well understood.
For more on currency correlation and the way to use it on your trading technique see Correlation Trading system
You can read more about the Correlation Code system at the Correlation Code Platform
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