Choosing a Forex Trading Platform

A trading platform is a piece of software. This software links an investor with a broker for information.  On a trading platform, an investor gets information such as quotes and charts. It also provides an interface used for entering orders that the broker can act on.

The platforms are run via Java and anyone with access to a computer and internet connection can use a forex trading platform. There are platforms you can use for free but for better functionality, you may prefer one that charges a small fee.

The software is installed on the trader’s PC and is supported by Windows, Mac and other technology. Once the decision to select a platform is made, a new trader wants to know how to go about making the best choice. 

Criteria for Choosing 

Reliability

Every investor wants a platform that is reliable. Naturally, that will be the first concern. You want to be able to make some profit in whatever you trade and to be able to access those profits. 

The platform you choose must allow you to not only make deposits but also withdrawals when you need them. The execution must therefore be reliable.

Licensing

It might be tricky finding the right platform based on licensing because there are many jurisdictions offering types of different and platforms using many licenses. You must, however, have a license in a jurisdiction that closely monitors the company with regard to trades and deposits made as well as withdrawals and funds.

Costs

You can access a free trading platform but there are also those that charge a fee. If you opt for one that charges a fee for the purpose of functionality, you will need to consider how much you pay. This is because these fees may eat in your profits. You may then end up disappointed if your profits are not as you imagined they would be. 

Ease of Use

Many of the platforms you are likely to come across use standardised software. This is great because you want to work with a platform that is easy to use. 

Additional factors

Other factors you ought to factor in include:

• Ease of deposit
• The leverage
• Margin requirements

Although these are considered minor factors, they are also significant especially if you are only starting out. When you are on a learning curve, you cannot afford to rule out anything on the basis of significance.

Prop Platforms or Commercial Platforms?

Prop platforms

These are developed by the brokers. Prop platforms work with the broker that developed the platform. Therefore, the features on it will have been customized by the broker. If the trader wishes to change the broker, he or she will have to move to the new broker’s platform and start learning the new features afresh.

Additionally, the broker’s primary concern is earning commissions and charges. Their focus may not be on building and customising the platform with quality features. 

Commercial Platforms

 These ones are developed by companies specialising in the development of trade platforms. Their focus is on developing trading software that is user-friendly and of high quality. However, unlike the prop platforms, commercial ones lack customisation. 

This could turn out to be a disadvantage certain traders may have a preference for a professional trading platform with a broker who is actively involved. Furthermore, they sell these platforms to brokers. This means there may be certain features in their platforms which favor the broker but the trader may not be impressed much. 

Despite these cons, commercial platforms have two features working in their favour:

• They are more user-friendly than prop platforms
• It is easy for the trader to change brokers

Conclusion

 Trading in foreign exchange is much like stock trading in that it requires security and reliability. The trading platform acts as a link between the trader and the broker. In addition, trading platforms should provide real-time and past data to the investor. Traders must also have access to any type of order for trading to be efficient.