A forex day trading platform is simply a desktop software application that receives quotes for a number of commodities or forex pairs, and gives you the data and tools necessary to make trades quickly and effectively. Many of them are based on similar software, with only the look and feel differing between platforms.
Your choice of a forex day trading platform is usually a personal one – it depends how you prefer to see your data, and which tools you use most often. However, there are a few things you should take into account before deciding. Here are a few things to look out for when shopping around for an online trading platform.
Do They Make The Market?
The first question you need to ask is whether or not the suppliers of your forex real time trading platform make their own market or not. This means that the brokerage itself matches trades, and doesn’t match them to another brokerage’s trades, or other investors. This is important for two reasons. The one is security – you want to know that there is sufficient liquidity in the market to handle al of the trades – and the other is because made markets generally trade faster, reducing the risk of paying something other than what you were expecting on a trade.
What Is the Spread?
The ‘spread’ is the thing you will see advertised most prominently. It is the different between the price you can buy an instrument and the price you can sell it at. It is generally expressed in ‘pips’, which are the smallest move a currency pair can make. This is typically 1/100th of a percent, or one basis point (in the case of USD/CAD this is $0.0001). The best trading platforms will offer spreads as low as 2 pips. The lower the spread, the greater the opportunity for profit – especially on small trades.
How Much Does it Cost?
The cost of a trading platform can be tricky to work out. Sometimes they charge you a flat joining fee, and sometimes you pay monthly. It is important to know what is included in this price. If the price of a platform seems suspiciously low, see if you have to pay for live quotes as well. Many platforms include live quotes, but some charge you extra for them. Trading with real money using 15-minute delayed quotes is simply not possible, so this is an essential factor when deciding on a platform.
Another thing to consider is whether you get access to a library of information and resources with your membership or purchase. This can save you hundreds of dollars on educational materials, so it is often worthwhile to pay a bit extra for this added information and personal support.