Daytrading: Choosing a Forex Trading Platform
If you are ready to start forex trading with a live account, one of the most important tools you will use will be your trading station. This is accomplished using a software platform that is made available by a reputable broker, and this will enable you to place your trades even in the fastest-moving markets.
A forex trading platform is a software that helps transfer information between the trader and the broker. It provides various quotes and charts and useful stock information and even acts as an interface for entering trades.
Types of Forex Trading Platforms
Trading platforms are generally divided into two types: locally based or web based. Locally based platforms are built within internal computer systems and can be operated with almost any operating system. Web-based software runs on java and a dynamic web language. Web-based systems can be operated using almost any computer with access to the internet.
Some pointers to keep in mind while selecting a forex trading platform are the following:
- Accurate forex quotes
- Quickly updated information feeds
- Reduced slippage
- Advanced charting software
The platform should provide accurate forex quotes. This means that your trading platform should provide correct, real-time quotes for all the currency pairs you wish to trade. The platform should avoid requotes and ensure that all market changes are reflected in the current pricing. This is especially useful for traders who exit stocks quickly (typically daytraders).
Fast and Accurate Trading Execution
The platform should execute deals quickly and efficiently so there is no need for requotes. It should execute different orders quickly and reliably. A platform should typically have take profits, stop losses and trailing stops at a minimum and with a one cancels another feature to avoid multiple orders for the same position.
A good platform will also provide a wide variety of technical analysis tools. This should include charts which are updated real-time and should have the scope for trading directly from charts. It should have popular indicators for stocks for currencies you wish to trade. It should possess accurate information tools for understanding the scenarios prevalent in the marketplace. Access to a reliable news source like Reuters and strong economic data is vital.
Certain software options allow for trades to program their trading strategies enabling automation of the trades by the software. But one must be wary of the platform can execute this without making major errors and executes the principles of the strategy as efficiently as possible.
The trading platform should not be taken down during market trading hours as you run the risk of not closing out your position. A platform which has minimal downtime is always ideal. The platform should also provide good security for your account and you should be able to recover information quickly and efficiently.