Best Forex Trading Platforms for You to Compare and Choose
When you are new to forex trading, there are a few things you are going to need to get started. You will need a trading system and a money management plan, a broker … and a trading platform. But what is a trading platform, and how do you make sure that you are choosing the best one for your needs? In this article on trading platforms for beginners, we break it down so that you can pick the platform which will be most suitable for you. Let’s go ahead and get started.
What Is a Trading Platform?
A trading platform is simply a software platform through which you can execute your trades. Most trading platforms include an array of features to help you manage your positions and even plan your future trades.
Types of Trading Platforms
Not all trading platforms are the same. Some do just about everything, while others may be highly specialized. For example, you might find trading platforms designed only for forex, while others might allow you to trade not just currencies, but also stocks and other assets.
Trading platforms may be either free or paid. Some work on a subscription basis, while others may require a one-time payment. Still others may be free only if you are trading through a certain exchange (see below).
Is a Forex Trading Platform the Same as a Forex Trading Broker?
There seems to be some confusion surrounding trading platforms and brokers, with a lot of newbies trying to figure out what the difference is between a trading platform vs. exchange, or broker.
This confusion is understandable. After all, both trading brokers and platforms allow you to open and close positions. You will investigate both as you try to decide where to trade forex. So what is the difference between the two?
Technically, a broker or exchange is the financial intermediary you are trading through. With a true exchange, the company in question is pairing you up with another trader who is taking the other side of your position. Some brokers may take the other side of your trade themselves (which can create a conflict of interest). Many companies which call themselves brokers are however operating as real exchanges.
The trading platform is not a financial intermediary; it is simply the software you are using to trade. That means:
- Sometimes the trading platform you use is proprietary and belongs to the exchange or broker you are using.
- Other times, you might be using a third-party trading platform. It might be made by an entirely different company.
New traders also sometimes wonder what the difference is between a trading platform vs. trading system. To be clear, a trading system is something entirely unrelated. It is simply the method you use to plan your trade entries and exits. It is a strategy, not a software program (though you can purchase programs to trade for you, called trading robots).
Forex Trading Platform Features to Look For
Different platforms for trading forex have different features. You should look for a platform which has the features necessary to support your trading strategies. Look for:
Execution Modes: Different execution modes and the ability to trail your stops (if that is something you plan on doing).
Indicators: The best forex trading platforms come packed with a ton of indicators and drawing tools which you can use to plan your trades and select profitable exit points. On some platforms, you even can load in custom indicators.
Robots: If you want to use automated trading, you should find out whether the trading platform you are thinking about using will be able to support your robot. Some platforms even make it a breeze to download free robots or purchase them through their marketplaces. They might even come with a number of them loaded in when you download and install the program.
Alerts: Some trading platforms let you set up audible alerts or send text alerts to a phone. This is incredibly helpful if you cannot always sit in front of your computer to manage your trades. You can use it to help you trade throughout the day and even overnight.
Encryption: As with any other online services you use, you should be looking for a platform which uses encryption to secure your account.
Trading platform demo account: You will need to demo trade before you trade live, so pick a platform which supports this.
Ease of use: Some trading platforms score higher than others when it comes to intuitive navigation and use. When you are trying to focus on making profitable trading decisions, the last thing you need to be doing is struggling to remember how to execute a trade—or exit one.
Accessibility: Can you use the platform with your operating system? Do you need to download it, or can you use a web-based version? Make sure that it will be accessible to you as needed.
Compatible with your broker: Finally, make sure that the broker and platform you want to use can be paired up.
Questions to Ask Before Choosing the Best Forex Trading Platform
You now should have a pretty good idea what you need to be looking for in the best forex trading platform, but let’s go over a few other important questions you need to ask while you are making your selection.
- What does the platform cost to use?
Factor in trading platform fees when deciding whether it is right for you. In some cases, paying for a platform may be worth it, but there are honestly quite a few excellent free options out there. So you may want to think about starting out that way. You also will discover that some paid platforms have deals with certain brokers and exchanges. If you trade through one of those brokers, you can use the platform for free or pay less.
- Is there a minimum account size requirement?
Some platforms are only available to traders with certain account sizes. You might, for example, need $10,000 or $25,000 or some other amount in your account at all times. Obviously, if you are starting out with less, these platforms are not for you.
- Are there any other approval requirements?
Sometimes a minimum account size is not the only hoop you have to jump through to trade on a platform. Certain types of trades or assets may require further authorization, and each platform may have different requirements. Check into this as well before you get started with a platform.
- How much historical data is there?
This is an important question to answer with regards to backtesting. It is helpful to be able to go back at least several years in time, so you can conduct plenty of testing and gather the data you need to verify to yourself that a method you plan to use has the potential to generate reliable wins.
What Platforms Do We Recommend?
Now that you know what features are important in a forex trading platform, you are ready to decide on a platform to use for your own trading. Looking for a comparison of trading platforms? Below, you can view a list of ones we recommend. Click on each to read our detailed trading platform reviews.
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You now know about different types of trading platforms, and you know the difference between platforms, brokers, exchanges, and systems. You are familiar with features, requirements, limitations, and costs associated with platforms, and you have a list of the best forex trading platforms to explore.
A trading platform is just one of the ingredients you need to trade forex successfully, but it is an important one. The wrong platform will make it difficult to place trades and will make it more likely to make mistakes. It will also make it harder to test strategies and plan trades. The right platform will make trading more intuitive, reducing errors. It will help you test methods and spot winning trade setups.
Ready to find out where to trade forex while enjoying the features and benefits of the best forex trading platforms? Scroll back up and read our detailed reviews to find the trading platform which works best for you!
Best Forex Trading Platforms: