If you have experimented with prop firm challenges or are considering doing so, you have undoubtedly seen that one platform consistently comes up: MetaTrader 5 (MT5). The main query at this point is: is it possible to employ MT5 for prop firm challenges? Perhaps more crucially, should you? Don’t worry as we are going to cover what you need to know about MT5 and how it relates to prop trading issues. Whether you're new to trading or an experienced trader wishing to move platforms, this article will help you.
What’s a Prop Firm Challenge Anyway?
Basically, a prop firm challenge is a tryout. Prop firms, which stand for proprietary trading firms, give you a demo account with their money, and it is your responsibility to demonstrate that you can trade sensibly and profitably. If you meet their requirements, which often include attaining a profit target without going over your maximum drawdown, you will be funded. Easy, is not it? Not always, that is.
However, there is good news: you can potentially generate money without risking your own money. This is the main reason why the prop company model is so attractive, particularly for skilled traders with modest funds.
MT4 vs MT5: What’s the Deal?
Let's immediately remove the myth about MetaTrader 4 (MT4) and MetaTrader 5 (MT5) before we go too far down the MT5 rabbit hole.
The original is MT4. Established in 2005, its primary purpose was currency trading. It's quite popular, lightweight, and simple to use. Many traders still attest to it.
In contrast, the MT5 trading platform which debuted in 2010, is closer to the more recent and powerful cousin. It features more timeframes, more built-in indicators, a better strategy tester, more asset classes (such as stocks and futures), and is generally more up to date.
But for many years, MT5 was a shadow of MT4. However, this is no longer the case.
There are several good reasons why prop companies are selecting MT5 over MT4 in 2024 and beyond.
Is it possible to use MT5 for Prop Firm challenges?
Yes, without a doubt. These days, MT5 is a supported platform for many large prop companies' issues. Some people even need it.
Companies that support or have completely switched to MT5 include FTMO, MyFundedFX, FundedNext, The Funded Trader, and Maverick Trading, to mention a few. Moreover, the list is expanding.
Why? MT5 is simply more future-proof, scalable and adaptable than MT4. Brokers like it. Companies like it. And you will most likely love it as well once you get the hang of it.
Why Prop Firms Are Leaning into MT5
Now, let's examine the reasons why prop firms are increasingly choosing MT5.
More Asset Classes = More Trading Opportunities
MT5 is more than simply a forex trading app. In a single place, it supports commodities, futures, indices, stocks and cryptocurrency. For prop traders looking to diversify or try out other markets during a challenge, that is a major victory.
When working with a company that offers a variety of asset classes, MT5 allows you to have a more seamless experience without having to switch between platforms.
Better Order Execution and Depth of Market (DOM)
For some trading methods, particularly scalping or high-frequency approaches, MT5's depth of market (DOM) features and more powerful order types can be game-changing.
Additionally, execution speed is important while participating in a prop firm challenge where every second and every pip counts. A great deal.
Economic Calendar Built-In
No more switching between your preferred news website and your trading screen. With MT5's integrated economic calendar, you can keep tabs on forthcoming releases and events directly within the application.
This is helpful during a prop firm situation, where your entire week could be ruined if you are caught off guard by NFP or CPI data.
More Timeframes, More Control
MT5 provides you with 21 periods, while MT4 only provides 9. It truly allows you more freedom to develop your analysis and approach, so it's not just a vanity feature.
Whether you're scalping, swing trading, or day trading, it is quite beneficial to have the exact timeframe you require.
Multi-threaded Strategy Tester
If you’re the type to backtest your setups or optimize Expert Advisors (EAs), MT5 has a huge leg up with its multi-threaded strategy tester. It’s fast, accurate, and lets you test more complex strategies.
Even if you’re trading manually during your prop challenge, this feature helps you build confidence before going live.
Are There Any Downsides to Using MT5?
Sure, it’s not all sunshine and rainbows. MT5 does have a few quirks, especially if you’re used to MT4.
Learning Curve
If you’ve been trading on MT4 for years, MT5 might feel a bit foreign at first. The interface is a little more complex, and some things are in different places. But after a week or two, it starts to click. Most traders say they never go back.
Not All Indicators and EAs Are Compatible
MT5 uses a different programming language (MQL5), which means your old MT4 EAs or custom indicators won’t work. You’ll need to find or build new versions for MT5.
That said, many of the most popular tools have already been ported over.
Broker Support Still Varies
While more and more brokers and prop firms support MT5, not all of them do. So if you’re entering a challenge, make sure to double-check which platforms they support.
You don’t want to build a strategy around MT5 only to find out the firm you're testing with only uses MT4 or cTrader.