What is MT5? MetaTrader 5 explained, from orders to limits

MT5, short for MetaTrader 5, is a multi-asset trading platform developed by MetaQuotes: software for following prices, analyzing charts, placing orders and running trading programs on forex, stocks and futures. Tradoshi is neither the publisher of MetaTrader nor affiliated with MetaQuotes: this guide is an independent explanation based on the official documentation, and the download is on the publisher's own site.

• Software, not a broker: MetaQuotes states that it develops software and does not provide investment or brokerage services.
• Three families of markets: forex, stocks and futures, depending on what the broker makes available on your account.
• Two ways of counting positions: netting and hedging, and the broker sets which one the account uses.
• Two passwords: the master password allows trading, the investor password only allows viewing the account.

MT5 comes up everywhere as soon as you look at forex or CFDs: in broker offers, in tutorials, on forums. The acronym ends up standing for a bit of everything, the software, the account, sometimes the broker itself. Yet these are three separate things, and mixing them up is costly the day something goes wrong.

This guide does not tell you which broker to choose and offers no download. It sticks to what MetaQuotes writes on its own pages and in the platform's help, so that you know what MT5 does, what it does not do, and what depends on someone else.

What is MT5? The publisher's own definition

The MetaTrader 5 trading platform page defines it in one sentence: a multi-asset platform that allows trading forex, stocks and futures. It adds tools for price analysis, algorithmic trading and copy trading. MT5 is therefore first of all a terminal: a window onto the quotes a broker streams, with the means to analyze them and send that broker orders.

The publisher is MetaQuotes. The MetaQuotes company page states that the company was established in 2000, that MetaTrader 4 was released in 2005 and MetaTrader 5 in 2010, the latter being described as a multi-asset system for forex symbols, stock instruments and futures. So MT5 is not a mere update of MT4: they are two separate pieces of software, each still presented by MetaQuotes on its own site.

The software itself costs nothing: the official MetaTrader 5 site offers it as a free download for Windows and macOS, as well as for iPhone, iPad and Android. That is where you get it. Free does not mean trading at no cost: the spread, the commissions and the financing of positions are the broker's, not the platform's.

MT5 is not a broker

This is the point that causes the most confusion. In the footer of its pages, MetaQuotes writes that it is a software development company and does not provide investment or brokerage services. MT5 does not hold your money, does not execute your orders on a market and does not set your trading conditions. All of that belongs to the broker that deployed the platform for its clients.

The platform's help shows it when you open an account. According to the MetaTrader 5 help page on opening an account, a real account is used for operations with real money, so you need to give the broker detailed information about yourself, as well as ID and proof of address documents. The request is sent from the platform, but the broker is the one opening the account.

The consequence is simple: the protection you get does not come from the software, it comes from the broker's status. Two brokers can offer the same MT5 and answer to very different regulators, or to none. In France, for example, the AMF page on the checks to make before investing asks investors to always verify the authorization of the company offering a financial product, on the Regafi register for an investment services provider, and recalls that the AMF publishes a blacklist of websites offering products without being entitled to. Other countries have their own registers, kept by their own regulator.

The same goes for leverage. The platform displays the account's leverage; it does not decide it. In the European Union, ESMA's statement of 27 March 2018 on CFDs announced leverage limits for retail clients ranging from 30:1 for major currency pairs to 2:1 for cryptocurrencies, with a margin close-out at 50% of the minimum required margin and negative balance protection. Those rules are addressed to CFD providers. An account opened with a broker established elsewhere can show far higher leverage in the same software.

What you can do on the platform

Placing orders. The platform page lists two types of market orders, six types of pending orders, two stop orders and a trailing stop. The general trading concepts in the MetaTrader 5 help name the six pending orders: Buy Limit, Buy Stop, Sell Limit, Sell Stop, Buy Stop Limit and Sell Stop Limit. The last two combine the others: a Buy Stop Limit is a stop order to place a Buy Limit order. The same page describes four execution modes (instant, request, market and exchange execution). Which one applies depends on the instrument and the broker.

Counting positions: netting or hedging. This is the notion most specific to MT5. The help describes two position accounting systems. With netting, you can have only one common position for a symbol at the same time: buying again increases it, selling reduces it, closes it or reverses it. With hedging, you can have multiple open positions of one and the same symbol, including opposite positions. The help specifies that the system used depends on the account and is set by the broker. So before trading, check which one applies to yours: the same series of orders does not give the same result in both cases.

Reading the Depth of Market. The help page on the Depth of Market defines it as the display of bids and asks for a particular instrument at the currently best prices, those closest to the market. It adds two caveats: for exchange instruments, the availability of the feature is not guaranteed and depends on the broker, and the number of bids and offers displayed is determined by the symbol parameters set by the broker.

Analyzing prices. The platform page counts 21 timeframes, 38 built-in technical indicators and 44 analytical objects. It also mentions an economic calendar, alerts, a signals service for copying other traders' deals and a market of applications. None of these tools says whether a strategy is profitable: they display, they do not measure your results.

MT5 vs MT4: what the official pages say

The two platforms coexist, and many brokers offer one, the other or both. The table below only uses the figures MetaQuotes publishes itself, on the MetaTrader 5 platform page cited above and on the MetaTrader 4 trading platform page, plus the release years given by the company page.

This table compares numbers, not qualities. More timeframes or indicators do not make a strategy better. The two gaps that really change daily use lie elsewhere: the markets you can reach, since the publisher presents MT4 as a platform for trading forex and MT5 as a multi-asset platform, and the programming language, which is not the same.

On that second point, a robot or an indicator written for MT4 does not open as it is in MT5. An MQL5.com article on migrating from MQL4 to MQL5, published in 2010, says it plainly: to use those programs in MetaTrader 5, they should be converted to MQL5, and it is not so easy to rewrite all of them. If your method relies on a tool bought or coded for MT4, check that it exists for MT5 before switching platforms.

MQL5, Expert Advisors and the Strategy Tester

MT5 ships with its own language. The MQL5 Reference documentation presents it as a high-level language designed for developing technical indicators, trading robots and utility applications which automate financial trading, with a syntax very close to C++. It distinguishes several types of programs. An Expert Advisor is an automated trading system linked to a chart. A custom indicator only implements analytical functions and cannot trade automatically. A script is a program for a single execution of an action.

Before letting an Expert Advisor run, the platform lets you replay it on the past. The MetaTrader 5 Strategy Tester documentation explains that it allows you to test and optimize trading strategies before using them for live trading, that it can test strategies trading multiple financial instruments and that it uses all available computer resources. It describes several modeling modes, from the most accurate and slowest, every tick, to the coarsest, which only uses the open price of each bar. The choice of mode changes the result: this is detailed in the guide on manual vs automated backtesting.

The tester also provides a Forward option, which runs the Expert Advisor again on a different time period to avoid parameters fitting certain areas of historical data. A tester does not protect you from everything, though. A flattering result obtained after dozens of optimizations is still a hypothesis, and the most common traps are described in the guide on how to backtest a trading strategy.

Demo account, master password, investor password

The platform distinguishes two types of accounts. According to the help page on opening an account, demo accounts provide the opportunity to work in a training mode without real money, allowing you to test a trading strategy. It is the place to learn order types and check the position accounting mode before committing any money. The step-by-step approach is in the guide on how to start paper trading.

Every account has two types of access. The MetaTrader 5 help page on authorization calls them master and investor. Logging in with the master password gives full rights for working with the account. Investor authorization allows you to see the account status, analyze prices and work with your own Expert Advisors, but not trade. The help describes it as a convenient tool for demonstrating the trading process on the account.

The practical rule follows. The master password is given to no one, neither to a service nor to someone offering to 'manage' your account. The investor password is the one you hand over when the account only needs to be shown or read. The same page flags a useful detail: if the master password is changed forcedly, the investor password of the account is also reset and a new one has to be set in the platform settings.

Desktop, web and mobile

MT5 comes in three forms. The desktop version you install is the one described by the help cited throughout this guide, Strategy Tester included. The MetaTrader 5 web platform page describes a version that opens in a browser (Chrome, Safari, Edge, Opera or Firefox), on Windows, macOS or Linux, with no additional software to install. The MetaTrader 5 mobile trading page states that the application can be installed on any iOS or Android smartphone or tablet, and that it supports the two position accounting systems, Market Depth and all types of trade orders.

In all three cases you log in to the same account, with the same number, the same server and the same passwords. A position opened on the computer shows up on the phone, because it is held at the broker and not in the device.

The limits of MT5

• Everything depends on the broker. Instruments, leverage, execution mode, netting or hedging, Depth of Market: the documentation refers back to the broker every time. Two MT5 accounts can have almost nothing in common.
• The platform says nothing about the broker's reliability. The same software can be offered by a regulated company as well as by one that is not. The check is made with the regulator, not in the terminal.
• MT4 programs cannot be reused as they are. An Expert Advisor or an indicator written in MQL4 has to be converted to MQL5.
• A test is not a result. The tester replays rules on a history, in the modeling mode you chose. It replays neither your hesitations nor real execution conditions.
• The platform's history is not a journal. It lists orders and deals. It contains neither the reason for each trade, nor the plan you were following, nor what you should have done.

None of this is a hidden flaw: these are the normal boundaries of a trading terminal. Knowing them keeps you from expecting from the software what belongs to the broker, the regulator or your own method.

MT5 and your trading journal

Tradoshi is a trading journal, independent of MetaQuotes: it does not replace MT5 and places no orders. It links to a MetaTrader 4 or 5 account with the investor password, so read-only: Tradoshi reads your history and keeps it updated, without being able to touch your account. You can also export your statement from MetaTrader and drop it into the journal. The steps are in the guide Connect MetaTrader 4 or 5 to Tradoshi, and keeping a journal on currencies is covered in the guide to the forex trading journal.

Frequently asked questions