Forex trading was not something that anyone could get into in the earlier days. The currency market was only accessible to a few individuals and institutions for trading. But thanks to the technological revolution, which made the forex market more and more accessible to anyone and everyone who wishes to engage in trading, the most liquid asset class. The emergence of online forex trading platforms allowed us to navigate the currency market with ease as all fore enthusiasts get equal opportunity to trade and make profits without much hassle.
But finding the best forex trading platform is the first step that one has to take to mark a humble beginning to their trading journey. And today, you will get to know the 5 things that you should look for when choosing a starting point for trading.
Basics of a Forex Trading Platform
Let’s start by knowing the basics of a forex trading platform. The forex market is a decentralised marketplace without any physical existence. So, those who wish to trade must be able to access the real-time market data and also the market itself for being able to place orders and execute trades. For this, they need a platform that functions as their trading space which is computer software in the case of online trading.
To go by the literal definition, a forex trading platform is actually a piece of software which acts as a user interface that connects traders to the forex market. This trading software bridges the gap between the virtual forex market and traders sitting on the other side of the screen. In the earlier days, there were only a few good forex trading software or trading platforms to choose from. In fact, most platforms were not fully equipped to meet the requirements of forex traders.
But later on, the standard MetaTrader 4 entered the forex world, popularly known as the MT4 platform, which paved the way for other out-and-out forex trading platforms. It was launched in 2005 but has retained its spot as the most popular trading platform to this date. It is also the most easily accessible trading platform since almost all forex brokers offer it to their clients. You just need to find the right broker and sign up for an account to explore the beginner-friendly trading software.
The developers of MT4 also launched an advanced version of the platform in the year 2010 called MetaTrader 5. But MT5 is not as popular as MT4 yet, as only a few brokers offer it. It appeals more to modern traders who want to trade multiple asset classes or follow complex strategies. Still, some top brokers have integrated MT5 for their clients, and you can also choose it as your trading platform for a superior trading experience.
The world of online forex trading is still evolving and growing at a rapid rate as technology is still advancing and developers are competing against each other to bring the most innovative and latest updates to your trading table. This is actually a great era for traders as we are lucky enough to access all the new features and tools which are designed to make forex trading easier, faster and more fun as well.
Decoding the working of a Forex Trading Platform
A forex trading platform opens up a gateway through which all users can access the forex market and place orders through the trading terminal. Online trading platforms are technology-driven computer programs that work together to simplify the trading process. Trading has become so easy that you can execute any trade with a few clicks. If you choose a feature-rich software like MetaTrader, only then can you place trades and use the advanced set of charting tools and indicators available on the platforms for analysing the market situation.
The Forex trading platform you choose can either come as a desktop version that needs to be installed on your computer system or even a web version that does not require installation. But the popularity of mobile trading is huge as almost all traders rely on app versions of trading platforms for trading on the go whenever they are busy sitting in front of a screen. All you need is a normal smartphone to easily access and trade in the forex market.
Things you can do on a Forex Trading Platform
These days the scope of forex trading platforms has become wider as you can not only trade currencies but can also access multiple asset classes offered by your chosen broker, which is great for diversifying your portfolio and exploring new opportunities. Trading platforms also offer an opportunity to interact with other users or fellow traders if they offer community chat features. Trading signal services and copy trading are other features of modern trading platforms. These are especially beneficial for beginners and passive traders who are not confident enough to trade on their own.
All the latest versions of popular trading softwares come with automated trading tools, as trading automation is a popular trend among forex traders. Those who want to go beyond the prospects of manual trading can explore algorithmic trading via the ready-made EAs available on the platforms. You can even reach out to the developer community to order customised EAs, or you can also build your Forex robot if you are an expert in coding. Basically, the advanced capabilities of forex trading platforms have allowed traders to go on a hands-free mode which is revolutionary in the world of trading.
Another thing you can do on forex trading platforms is observe the markets and practise via a demo trading account. Almost all forex trading platforms and forex brokers offer a free demo account feature which gives you a safe space to indulge in practical learning, which is crucial for enhancing your skills as a trader. Here, you can easily trade in real-time market conditions without risking real money and thereby gather some experience as a beginner in the forex world.
How to choose the Best Forex Trading Platform for yourself?
Now, let’s look at the 5 things you should look into for choosing the best forex trading platform for yourself.
- Accessibility- First of all, you need to make sure the trading platform you plan to use is freely accessible without any interruptions. Make sure the platform is fully compatible with your system.
- Cost- Popular trading platforms like MT4 and MT5 are free to use, as the company doesn’t charge anything for using its trading platforms, nor does any broker. You can easily download it from the official website or broker platform. But some trading platforms may charge you for usage, and you need to read the terms and conditions well to ensure there are no hidden charges for using the platform. Additionally, the broker you choose will charge you in the form of spreads and commissions, and you need to look for low cost brokers for trading on a budget.
- Platform Functionality – You need to ensure the platform is fully functional and has all the tools and features you will need for trading. Make sure they fit your trading style and provide fast execution of orders. The best way to check platform functionality is to sign up for a demo account with your broker. This also gives you a glimpse of the trading conditions the broker offers and allows you to explore your trading environment without being exposed to market risk.
- Customer Support – Those trading for the first time are bound to have a lot of doubts when it comes to using the platform. Even experienced traders can get stuck at times if there are any technical glitches or issues which need to be resolved by technical experts. Hence, make sure the broker platform or trading platform has a responsive customer support team to help you out as and when needed.
- Trading Instruments – Lastly, you need to check if all the trading instruments you plan to trade are available on the trading platform and supported by your forex broker because you cannot trade any instrument unless the broker and platform offer it.
With this, we have come to the end of this write-up and hope we have answered all the questions that you had in your mind about forex trading platforms. Make sure you choose the best trading platform and broker based on the above-mentioned criteria, as the success rate of your trades depends on the platform and broker you choose. So, take your time and start trading on your ideal platform.
