All About Trading Platforms

Read about how Forex traders use Meta Trader, Paragonex and other trading platforms to execute foreign exchange deals online.

What are trading platforms?

Trading platforms are the software used by investors to buy and sell financial assets and take advantage of market-price changes. These platforms enable traders to analyse the markets and open, manage and close trading positions.

From basic platforms to more advanced and sophisticated ones, there is one for every type of trader – both traditional and modern.

Nowadays, online trading is becoming increasingly popular. Trading on the formerly exclusive Forex market is available to a much wider audience thanks to technological advancements and the everyday use of the internet.

Just about any Forex trader who executes currency deals over the internet, uses one of the various Forex platforms available. Some of the most notable ones include Meta Trader, Teletrader, Leverate, NetDania and Prorealtime.

The minimum transaction size required to start trading Forex has also drastically been reduced, thanks to leverage and margin trading.

While the Forex market is usually traded through one lot (100,000 units) contracts, online brokers usually offer smaller positions like mini lots (10,000 units) or micro-lots (1,000 units).

Accessing a Forex Trading Platform

Platforms for online trading are typically free of charge through your online broker or by their developers. Some brokers offer both their own trading platform, as well as support for a popular and widely used one developed by a third party.

Trading platforms may either be entirely web-based, in which case, they are typically exclusive to a particular Forex broker. To obtain access to such a platform, you will need to open an account with the relevant broker, and either use a funded or demo account.

Alternatively, trading tools and platforms may be provided by an independent developer, like the very popular Meta Trader 4 or 5 software, which is available from the MetaQuotes Software Corporation, free of charge.

These dealing platforms usually need to be downloaded from the developer’s website, and then locally installed as a program on your personal computer.

MT5 platform dashboard
MetaQuotes’ MetaTrader 5 Trading Platform

Forex Trading Platform Features

As the name implies, the most basic functionality that just about all Forex platforms provide is the ability to execute deals in the Forex market.

Depending on your trading strategy, you will be able to use very volatile and liquid currency pairs or more exotic and less liquid ones. That’s why online Forex brokers usually offer different kinds of pairs. They include the majors, minors, exotics, and currency crosses.

Most Forex platforms also provide a variety of additional features for a complete trading experience. Some of these might include:

  • Real-time market quotes and dealing rates
  • Advanced Market Depth
  • The ability to use various types of orders (market, limit, OCO, trailing stop, etc.)
  • Tic charts to help you time market entry and exit points
  •  Exchange rate charts plotted over one minute to monthly time intervals to fit all types of trading strategies
  • Technical analysis and drawing tools, as well as analytical objects (technical indicators, trend lines, horizontal lines, channels, Fibonacci, Gann and Elliott Waves tools, geometric shapes, etc.)
  • Quality news feeds for fundamental analysis (economic and financial calendar)
  • Backtesting of trading strategies on historical exchange rate data
  • Paper trading
  • Programmable automated trading based on your own trading algorithms that automate your investment strategy through non-discretionary methods that work whenever the markets are open.
  • Execution of off-the-shelf Expert Advisors or EAs
  • Operation on a Virtual Private Server or VPS for extra reliability
  • Personalised account management
  • One-click trading option
  • Trading signals
  • Price alerts
  • Possibility to use a hedging strategy to offset your overall risk
  • Trading on mobile and tablet devices
  • Range of trading instruments and currencies available
  • Different types of trading accounts, leverage, spreads, etc.
  • Scalping
  • Education

If any of these features are particularly important for your trading style, make sure the prospective online broker offers or supports an investment platform that includes them before opening a real trading account.

Characteristics of a Good Trading Platform

Although personal and trading needs can vary, some of the more common characteristics that traders will usually want to be featured in their platform include:

ParagonEx Proprietary Trading Platform – Home Screen
  • Security
  • High standards and reputable regulatory authorisations
  • Reasonable transaction costs
  • Reliability
  • Popularity
  • Minimal downtime
  • Accuracy of quotes and minimal need for re-quotes
  • Ease of use
  • An efficient order entry and deletion process
  • Account management capability
  • Support for fundamental and/or technical analysis
  • Fast and reliable execution

A Final Word

To begin trading the FX market, you need to choose a reliable broker that will give you access to powerful Forex trading platforms, so you can easily and quickly buy and sell foreign currencies.

Your priority is to do your research and make an informed decision as to which broker will best meet your trading requirements.

Check that your selected broker is reliable and offers a high degree of security and compliance. Avoid picking an online broker that isn’t regulated in its area of operation or one that doesn’t offer a fund protection scheme or other types of investor protections.

In addition to the platform, you should also check account offerings, as they differ from one broker to another.

Verify the accepted currencies, payment/withdrawal methods, leverage and margin, commissions and spreads, initial deposits, and the professionalism, knowledge and availability of customer service.

Most reputable online brokers will allow you to preview their Forex platform before you fund an account with them. They usually do this by offering a demo account to prospective trading customers.

Consider taking advantage of this offer so you can see whether their online platform has all the features required to implement your trading strategy and be profitable over time. Is the platform easy to use? Are all your trading tools or technical indicators available? These are just a few of the most important questions to ask.