Trading Platforms: How Do They Work and How to Choose the Best One?
Many people decide to become investors and traders in order to make a profit. But to do this properly, they need a good platform, which is not easy, especially when you’re just getting started. When it comes to trading platforms, the internet offers many options, and it’s hard to figure out which one suits your needs and goals the most.
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If you’re in this tough spot, then this article is for you. But first of all, you should probably check the list of brokers offering trading platforms with the most low spreads in the fx industry. Explore the broker reviews on the list, so you can get more information about the pros and cons of each platform offered. Without further ado, let’s get started.
What Is a Trading Platform?
A trading platform refers to a program or online “marketplace” where you can purchase financial products or sell them. They are generally offered by financial institutions and brokerages, and they let you make trades anonymously.
The transactions are done in a network environment, with the broker serving as the intermediary between the trader and the market. Investors and traders are then able to keep doing transactions and maintain a savings account.
Trading platforms come in several types. They can be:
- Mobile Trading Platforms – As the name suggests, these platforms work on your smartphone and can be installed on both iOS and Android. You simply need access to Internet to use them.
- Web-based Trading Platforms – These can be accessed only from your browser. They don’t require any download or installation. You just have to open your preferred browser and access the platforms. However, these options may be a bit limited in terms of features.
- Desktop Trading Platforms – Desktop platforms are downloaded and installed on your laptop and computer. Due to their wide range of features, they represent the most popular option among experienced traders.
On top of that, trading platforms can also be commercial or proprietary. Commercial ones are made mainly for retail investors and day traders, whereas financial institutions make prop trading platforms for their own activities and purposes.
How to Choose a Trading Platform?
When you’re a beginner, choosing your own trading platform can be very challenging, especially when you are still learning about trades and working on a strategy. But fear not – with a few simple tips, you will be able to select a trading platform that suits your needs without too much hassle.
Here are some things you need to consider when making a selection:
- User-Friendliness
One of the main things you should pay attention to is whether or not the platform is easy to use. Some programs are more suitable for experienced users, while others are better for beginners. Moreover, certain platforms have more intuitive interfaces and features than others, and this is another thing you must keep in mind.
User-friendliness and accessibility make the trading experience easier and more convenient for you. Check out the platform’s layout and features to get an idea of how good it would be for you.
- Pay Attention to the Tools
Bear in mind that each trading platform offers different tools. These features can be used to help you during your trades and boost your activity. The best thing to do is go for the ones that will significantly increase your chances of success. There are many tools available, such as indicators, customizable alerts, trading charts, and trading analytics.
- Platform Costs
You will have to deal with several costs and fees when you use some platforms. So, before you join one and start trading regularly, you should know these fees. In most cases, creating your account is free. However, when you trade on certain stocks, you can expect to pay commissions.
- Think About What You Want
What are your goals and needs? This is one of the first things you should consider when choosing a trading platform. Since each platform offers a unique experience and different tools, you must find something that aligns with your goals.
Analyze and compare each platform and pick the one that is equipped accordingly.
- Look for a Demo Account
One of the easiest ways to choose the right platform is by looking for options with demo accounts. These let you test the waters before you commit, allowing you to become familiar with the features and tools.
Final Thoughts
It’s not easy to choose a trading platform, but there are some tips to consider. Think about your goals, look for a demo account, check the fees, pay attention to the tools, and search for user-friendly options. This way, you can find something that suits you.
