When someone wants to begin trading forex, the initial decision they need to make is which online broker to use. It is important that a new trader conducts research to find a broker that is going to provide them with a first-class package as there is a healthy amount of competition within the forex market to pull in new business. Where brokers can appeal to a trader is in the cost to trade, the level of trader support they offer and of course what trading platform they use and how good it is.
Probably the most key element that a new trader can specify is the trading platform. They must make sure that it can perform all of the vital requirements promptly and easily as well as be safe and stable, i.e does not keep stalling or crashing when being used.
Currency trading platforms should first and foremost offer a security for your deposited funds, whether that is $100 or $10,000. Another valuable feature is the ability to stream real time data for the client to see (admittedly this applies more to stocks and commodities which trade on an actual exchange). This data needs to be displayed so that the user can easily and simply locate key data. For example, it should be simple to locate various different currency pair listings.
The ability to make a trade should also be straight forward so there is no chance of making an error and putting in a sell order when it should have been a buy order or vice versa. Then being able to exit the trade easily as well with a clear pip or profit reading on each individual trade.
Along with all of the primary functions, good software should allow a user to set up and edit stop losses quickly and easily whether they are fixed or moving. A nice additional feature to a trading platform is the charting software. Charts are essential in providing the data on which traders base their decisions. The better the charting package on the platform the more precise the calculations that can be performed. A charting package should have the facility to display both very short and long term scale trading periods. A popular trading chart period is the 4 hour chart. Also a chart should be able to show information over a longer period, such as weeks, months and years. An additional feature that is worth mentioning are platforms that can be accessed from mobile devices such as PDA’s, allowing greater flexibility.
The software can be general, meaning that it is developed by a third party company and used by various different brokerages. A popular example of this currently is MetaTrader 4. A second type is an in-house platform specifically designed for and used by individual forex brokerages. Many of the makers of additional forex trading programs such as forex robots and chart indicator packages will have designed their products to work straight out of the box on generic platforms whereas there could be integration issues with in-house software. Having said that, with the popularity of advanced forex robots, these types of integration issues are improving all of the time.
Another aspect you should be conscious of if you are a U.S citizen is that some brokers will not permit U.S citizens to trade with them. This is due to the SEC being overprotective about its citizens and unfortunately this is not just confined to forex.
A good idea is to use the free demo account available with most online brokers. Then judge how it performs and if you are content and can use all of the features easily and precisely then you may have found the platform to trade on.
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