There is a software system used to trade securities, usually known as a Trading Platform.
In this system, you can manage, open and close the market positions via an online broker or a financial intermediary. For beginners, investor’s trading platforms offer an easy-to-use interface with basic order entry screens or real-time streaming quotes, advanced charting tools, a live news feed, and educational resources.
These trading platforms are something you can run on your own after you are provided with the proper education; by being a part of these platforms, one can access all sorts of markets, place trades, manage your account, and monitor positions. It is essential to understand the trading platforms to form an analysis of the market.
Trading Software:
All the platforms used in the foreign exchange market are known as forex trading platforms, trading in currency pairs. Although trading platforms offer you a wide variety in which you can trade, including stocks, commodities, indices or currencies, and so on.
Trading software is the kind of software that a trader uses to execute their trades, which is installed on a computer or a mobile device. In contrast, a Trading platform is a broad term that constitutes a complex system of software that a broker manages in terms of trades.
How do they Operate?
Every brokerage firm provides its trader a trading terminal to assist the trade via mobile phone or a PC through which you log in given the email and password. The software provides information for special order types, assets, fundamental data, charts, and other proprietary tools that help the trader trade.
CFD Trading: The trade takes place in the price of movement of securities.CFDs are used to make price speculation in terms of whether the securities price movement will rise or fall. They have the highest leverage to offer than traditional trading platforms. Certain markets have a trading limit, there is a certain amount of trade that can take place for the trade within a day, but in CFD, there is no such limit, and all account holders can trade however they wish.
Spot Trading Platform: Platforms offer immediate delivery of the financial instrument that is traded in the form of commodities, currencies, and securities. Counter markets and exchanges provide such trading platforms.
Future Trading Platform: offers transactions of the asset at a predetermined price; commodities like food, energy, and metals are traded at affixed prices via future contracts. Most traders use futures trading platforms to improve interest rates.
Understanding Trading Platforms:
There are two types of trading platforms depending on the type of trader you are:
Commercial Platforms:
If you are a daytime trader or a retail trader, then commercial trading is your trading platform. These kinds of platforms have many helpful features, including an international news feed, interactive charts, research tools, educational resources, and real-time quotes.
Example
Interactive Brokers: one of the best daytime trading platforms, it offers a large number of assets to trade while charging the lowest commissions/margin in the industry.
Proprietary Platforms:
These platforms are developed by large financial institutions and brokerages for their own trading sessions. These platforms are not available for the public to utilize. They also have educational portals and everyday news within the platform.
Example
Surge Trader: It is a new proprietary firm formed in 2021 by forex trading veterans, including brokers and venture capitalists. Its main target is to maximize success by increasing funding. What makes it distinctive is it can manage up to $1,000,000 with a profit split that gives the trader 75% of it.
Popular Trading Platforms:
There are so many trading platforms out there, but here are the top four ones:
Metatrader 4/5: Metatrader 4 was launched in 2005 by the Cyprus-based meta trade software corporation. It is a very well-recognized trading platform that has been able to set the industry’s standard for trading. Meta trader 4 offers expert analytics and trading signals which provides effective trading strategies. The best thing it has to offer is that it can be accessed from anywhere with an internet connection. Although metrade 5 and 4 belong to the same company, MetaTrader 5 is a little less known and offered. It was launched in 2010 after five years release of MetaTrader 4. It was created for use in stocks and commodities because it can work better if it’s plugged into a centralized trading exchange. Meta trader 5 has better-upgraded software as compared to meta trader four, and it does have better graphics and with better user interface to ease the trader in trading.
Robinhood: it was formed in 2013 for the purpose of giving traders a trading platform in which there is a low trading commission. It is more streamlined and has partnered up with NASDAQ to provide its traders with the best facilities to trade. Robinhood is a website and has a mobile app
through which you can trade. This platform offers only stocks, cryptocurrencies assets, and exchange-traded funds (ETFs).
Binance Trade: It is a cryptocurrency exchange platform that offers crypto traders to trade. It provides a large selection of cryptocurrencies to trade with low trading fees globally.
C Trader: it’s a platform known for trading in CFD and forex. It further provides charting tools, level 2 pricing, fast entry and execution, and advanced order types. C Trader is connected to a large user interface and has the best-automated technology.
In terms of Forex trading platforms, Metatrader is the most popular one. It interfaces with many different brokers. Its MQL scripting language is the most famous tool for the one looking to automate their currencies.
Things Trading Platforms have to Offer:
A trading platform is a complete package for the trader; it has all the trade management and market analysis that is necessary to trade. Let’s look into a few:
Charts and Indicators perform technical analysis and determine price trends.
Trade Management to edit, submit and close trading orders.
News Feed following news national; international that impacts exchange rates and prices.
Trade History views past orders.
Back Testing before running strategies on a demo or real account; the strategies are performed on the historical data.
Automated trading without manual interventions runs automated strategies. Marketplace buys third-party software or proprietary to improve your analysis and trading. Fund Management check balance, withdraw and deposit fund.
These features change according to the platform and the broker you opt for, so the moment you choose, be wise and know what you’re wanting and what you’d need to trade properly, plus always test what is given.
Relationship between Broker and Trading Platform:
Trading software is not always related to a broker. There can be two situations/positions:
● A broker with an exclusive trading platform is the broker that develops their own trading platforms, available for trading to their traders; by doing this, the broker manages all the features of the platforms.
● Third party trading platform is used by a trader; in this situation, the broker rents out a trading platform to use as a terminal to trade, and also the broker is allowed to perform customization to it, but the core belongs to someone else, and the broker does not have it all.
The third trading platforms are the most utilized platforms. In these platforms, the brokers and investors trade securities that are exchange listed and are traded through a formal exchange referred to as NYSE. The role of these platforms is to bring together high-net-worth investors willing to buy and sell their securities. For Example, in the forex market, a lot
of brokers have their own software, but instead, they provide meta trader 4 and 5, which is the most common third-party trading platform.
These two terms are quite different from each other hence making the difference quite clear. Which one is the right one for you? It is entirely on the trade you want to do and depends on the aspects that you’re looking for.
Managing Funds in a Software:
Managing funds has to be the most faced challenge among the beginners and experts in the market.Forex trading expertise comes overtime.It can’t be learned with in a day or so. Beginner traders tend to lose money fast as compared to the experts due to their management skills in funds and their strategies.
The management software provides services through which the beginner trades by minimizing their trading risks through the use of stop losses. A trader is able to see his equity and used margin through which he is able to access the current and future trades that he is going to place. These platforms provide ease in lots selection and help manage current trades by either cutting down losses or limiting profits.
Summary:
Hence the trading platform entirely depends on the type of trade you want to choose and the style. There are many trading platforms out there that have their own distinctive features that distinguish each one of them from the others. There are different platforms for stocks, cryptocurrency, and even forex; depending on the type of trade you want to do, go for the platforms that entirely offer that.
Always check the details with the broker regarding the platforms and look into the features it has to offer before you make a move.
