An Introduction to Forex Trading Platforms

Forex trading can be particularly tough; mostly because of unrealistic expectations typical especially among newcomers. What you need to know is that in no way is currency trading a get-rich-quick scheme. You will receive an introduction to the Forex trading platforms in this comprehensive guide, the best choices available and what makes the best trading platform, as well as how to select the right platform for your style of trading. First, let’s find out what Forex means.

What is Forex ?

Forex is the marketplace where currencies are traded or the foreign exchange market. An approximate USD 5.3 trillion is traded every day across the market as a whole between speculators, companies, banks, and states. It’s important to know how the marketplace is laid out because the combined mix of all players produces the market you trade in. 

The relative weight of the market trading party is determined by how much capital the group controls from billions of dollars of hedge funds and investment banks to private traders with several thousand dollars in operation. 

Currencies are traded as pairs, and currency pair movements calculate the value of one currency versus another. For example, the EUR/USD currency pair measures the euro against the US dollar. When the pair’s value increases, this means the Euro’s value has increased against the US dollar’s value. When the value of the pair rises, it means that the value of the US dollar has risen. 

Traders will make a profit from those currency movements by trading Forex.

What is Forex ?

Forex is the marketplace where currencies are traded or the foreign exchange market. An approximate USD 5.3 trillion is traded every day across the market as a whole between speculators, companies, banks, and states. It’s important to know how the marketplace is laid out because the combined mix of all players produces the market you trade in. 

The relative weight of the market trading party is determined by how much capital the group controls from billions of dollars of hedge funds and investment banks to private traders with several thousand dollars in operation. 

Currencies are traded as pairs, and currency pair movements calculate the value of one currency versus another. For example, the EUR/USD currency pair measures the euro against the US dollar. When the pair’s value increases, this means the Euro’s value has increased against the US dollar’s value. When the value of the pair rises, it means that the value of the US dollar has risen. 

Traders will make a profit from those currency movements by trading Forex.

What Is A Forex Trading Platform ?

Forex trading platforms are electronic trading software applications which give investors access to the foreign exchange market. They can be used to manage, close and open trades from the device of your choice and contain a variety of timelines, indicators, and tools designed to enable you to monitor and analyze real-time markets. 

Many traders are often curious about what’s the best software on the trading platform. This is one of the main issues a trader wants to know when he starts his Forex journey. This is particularly true in the current times, as there is a great deal of tech rivalry. Trading platforms like MetaTrader don’t just restrict you to foreign exchange–you can trade a variety of other financial instruments including CFDs, precious metals, commodities, and more. 

A customer-centred broker makes these cutting-edge platforms available for free download and provides you with any technical or practical support you might need to succeed.

What Are the Best Trading Platforms ?

MetaQuotes Platforms

Most brokers will supply you with different trading platforms when it comes to trading FX online, however, the most common ones are the MetaTrader platforms. Ten years ago, this software was developed. MetaQuotes Corp-MetaTrader 4 and MetaTrader 5 offer two primary options for the trading platform.

MetaTrader 4

MetaTrader 4 is an FX trading platform designed specifically for FX trading. Since retail Forex is a comparatively new industry, robust third-party applications had not been accessible until MetaTrader 4 emerged. 

This is a robust trading platform that offers a lot of useful features to traders, including nine different time-frames, multi charting, limit orders, pending orders, over fifty indicators, a plethora of expert advisors, and 1-click trading. 

Those are just a few of MetaTrader 4’s benefits. The longevity is among the key selling points. You can rely on this platform, really. In addition to this, a strong range of mobile apps is also supplied. Such apps are available for almost every form of OS, including iOS, Android and Windows. It goes without saying that these mobile platforms are very stable and powerful too.

Nevertheless, sometimes you may note that some brokers provide wider spreads on the MetaTrader4 platform compared to the narrower spreads they may provide through their major trading platform unless the broker concerned provides multiple trading platforms for trading on.

MetaTrader 5

Very similar to MetaTrader 4, this is one of the best platforms for Forex trading. MetaTrader 5 is generally slightly quicker, embraces more order types, comes with a greater number of indicators and has some additional features. While it’s a better platform, there are no major, groundbreaking differences that can turn MetaTrader 4 into a redundant trading platform. 

What’s nice about MetaTrader 5 is that it can accommodate a larger number of trading tools compared to MetaTrader 4, for both traders and brokers.

Although MetaTrader 5 is identical to MetaTrader 4, there are certain advantages it has that other forex trading platforms simply do not have. MetaTrader 5, for example, does have:

  • The trader can view about twenty-one timeframes. This includes eleven types of minute charts including M3, M1, M2, and so on; seven types of hourly charts like H3, H2, H1, and so on, as well as monthly, weekly, and daily charts. Most systems, like MetaTrader 4, only have 9 timeframes.
  • Six types of orders pending, including sell-stop-limit, buy-stop-limit, sell-limit, buy-limit, sell-stop, buy-stop and orders. Typically MetaTrader 4, as well as other platforms, give the first 4 versions of pending orders.
  • The capacity to switch from hedging mode to netting mode. Hedging mode allows trading ability in opposing positions and it has helped improve Forex traders ‘ trading options.
  • The DOM (Depth of Market) feature also enables Forex traders to display the bids and offers of a financial tool at various prices.

ProRealTime

The trading platform ProRealTime is a software developed by IT-Finance in France for the technical analysis. The application is unique in that it’s a web-based program backed up on the cloud network of the company. The platform also provides a variety of advanced analytical and charting and tools and the ability to create personalized trading strategies and market scanners using their language of ProRealCode. Users, however, have to pay for a software license to use the application. Furthermore, there are extra charges for accessing company data in real-time.

eSignal

The platform for eSignal trading is designed for experienced traders who enjoy fully customizable features. While the platform provides all the standard features required of a modern trading platform, users can use the coding language to establish their own market screeners or trading methods. The system provides sophisticated drawing tools like Gann boxes, time and price squares, and the ability to monitor about five hundred symbols at once. However, traders need to link their platform with one of eSignal’s sponsored brokers to access streaming and real-time data feeds. This means users will be forced to lease the eSignal platform at a monthly or annual fee.

NinjaTrader

Trading platform NinjaTrader has been in use since 2004 and is designed for active forex traders, futures traders and stock traders. While the app provides specialized charting, automated strategy development, and simulation of trade, those who wish to conduct business from their platform must buy a lifetime lease or license the platform on an annual or quarterly or basis.

One of the major reasons why MetaTrader platforms are so popular and widely used is the fact that their broker is free to the trader. And, in some situations, advanced trading devices come at no extra cost. NinjaTrader also operates mainly as the trading platform and is not a provider of market data. 

This means that users need to link their platform to a market data provider that NinjaTrader works with such as Google Finance or Kinetick, so as to receive real-time or end-of-day market data.

cTrader

Spotware has established’ cTrader’ in recent years as a competitive trading platform. Even though the platform provides trading functionality and advanced charting similar to the MetaTrader platform:, there are certain differences

  • Since MetaTrader is one of the best-known auto-trading platforms, it has a huge online audience which shares novel indicators and techniques. This also makes it much easier for the MetaTrader platforms to receive support on the Internet, while support for the auto-trading capabilities of cTrader may be limited.

  • CTrader does not allow modifying indicators and limits the use of third-party programs. On the other hand, MetaTrader excels on the web as it is fully customizable.

  • MetaTrader comes equipped with functionalities including signal trading  functionality, real-time market news, and an economic calendar, while cTrader has no such features.

Because this platform is accessible through a web browser until recently there has not been a great emphasis on mobile app growth. Now cTrader is only available for iOS and Android devices. While most traders are likely shielded by this, it hinders those who use a Windows phone. MT 4 and 5 are surely the best mobile trading platforms in Forex.

Benefits of using Forex trading software

Real-Time Trading

In the world today, financial transactions occur instantly. For example, the news of a Middle East crisis may lead to chaos in the US stock market. Similarly, implementing new tariffs could result in significant changes in the US dollar supply and demand in the Forex market. Platforms for online trading enable immediate reactions to those shifts. That means you can make immediate money, or significantly limit your losses. Enter an automated trading platform to benefit from live trading in futures, forex, and equities.

Virtual Training Programs Are Accessible 

Digital trading training programs, also known as prototype accounts, help you grasp the dynamics of forex trading. For instance, you can open and close positions and understand how to make functionalities for profit and use stop-loss It takes a bit of time to understand these things, and demo trading will help you make strategies that are refined until you risk actual capital in the markets.

Automated trading

Perhaps the main benefit of utilizing Forex trading platforms is that the trading activity is automated. The store is open 24/7. Unfortunately, people can’t watch the market all day. People need to eat and sleep and do something else. However, if you have an app then you can always evaluate the market. You have a method for collecting data that can be used to find reliable trading opportunities that pose high probabilities for you. The software isn’t just analyzing data but will also invest for you, and continue to do so until it considers the exchange to have turned bad. Once again the software will look for profitable trades at that point. Having a Forex program is just how secure and simple that is.

Market Signals from Seasoned Traders

There are hundreds of online trading sites. The successful ones distinguish themselves from their rivals by giving their customers market signals. Such signals are helping the users to make the appropriate commercial decisions. Everyone is in a win-win scenario. The traders using the platform gain tons of money since they observed the right signals on the market. The company also wins because it keeps its existing customers as it draws new ones. Enter today’s popular trading platform so you can regularly collect such market signals.

Access to Analytical Materials and Tutorials

Efficient traders have a thorough knowledge of the market and make use of high-reward, low-risk strategies. Some of them share their information through tutorials with aspiring traders. Trading platforms online offer the best tips from seasoned traders. They regularly update those tutorials to represent the current market state. Analytical resources are also available. They give you market knowledge so you can make the right business decisions.

Access to other Traders

If you want to improve your chances of profitability in the stock markets, joining the best traders is an awesome idea. This is because they always know something you do not know about the markets. These top traders can be found on the online forex trading platforms. Many of these sites let you see these top traders ‘ activities and let you copy their movements. The best part is being able to automate that process. That way, you can simply copy top traders ‘ moves and earn money while you’re sleeping.

Mitigated Risks

Every trade is risky. With a Forex trading app, however, you can significantly reduce the risks. The software first enables users to trade in virtual currencies so that they can view the program as it works without the risk of losing money.

No high broker’s fee

In the past, if you don’t want to do the dealing yourself then you have to employ a broker’s services that will trade for a fee on your behalf. A broker’s services don’t come in cheap. And that is not a one-time fee. And you have to remember that these brokers are individual too. The means they’re prone to making mistakes. You will avoid paying the high broker fees by using an application. Plus, software is more precise than brokers and is, therefore, more reliable. Most of that software also costs less than hiring a broker’s services.

How Can You Find the Right Forex Broker ?

Finding a Forex broker can often feel like a difficult decision, as many options are available. Key criteria to consider when choosing a broker include:

Broker’s Licence

It might surprise you to learn that Forex has no central regulator. That doesn’t mean you will pick a broker without considering regulation. Instead, we recommend choosing a broker regulated by your area’s financial regulator. 

A good broker will usually be proud of their licenses, using it as a selling point. The advantage of choosing a managed broker is that this will ensure that you, as a trader, are fully protected by your country’s law. For example, in 2018, the European Securities and Markets Authority (ESMA) implemented a set of regulations protecting retail trading customers that all European Forex brokers must follow. This law includes limits on available leverage, preservation of ambiguity, defence of negative balance and more. 

Understanding that funds’ security is also important. You need to choose a broker that segregates funds from their clients’ own, ensuring that the broker can not use your deposits for any of their own financial activities. 

It also guarantees your funds are available for withdrawal upon request. Finally, check whether the broker offers reimbursement for financial services. It specifies the amounts of funds that will be credited to you if your broker or his bank goes bankrupt.

Quality of the trading service

The broker operation you choose and the platform they provide is essential to ensure you achieve the best trading performance. For example, if you were trading on a network that was slow and frequently crashed, you might not be able to trade at the price you want. Alternatively, it’s important to look for a broker that offers high liquidity rates, low spreads, and the ability to execute orders at the price you want.

The aspect of service is the available margin requirements and leverage amount. Although there is no need to pick the highest level of leverage available when you start trading with Forex, simply knowing that a broker offers the highest level of leverage approved by its regulator means you can begin to increase your leverage according to your preferences as your experience increases.

Markets and products they offer

Clearly, you want to ensure they have access to a wide variety of currency pairs, including exotics, minors and majors, when selecting a Forex broker. But what about other financial instruments? If you’re considering trading with a Forex and CFD broker, it’s a good idea to look at the other instruments they’re offering. 

This will mean that you don’t need to find a new broker if you decide to trade stocks, indices, ETFs, assets, cryptocurrencies and other apps in the future.

Available trading tools

The quality of a Forex broker’s trading tools would make a big difference to your trading experience. In most cases, it will rely on the trading platform being used. such as a variety of custom tools and add-ons to enhance your trading experience. Although Forex trading for professionals or beginners will always need software, the degree of broker competition means most Forex trading software is free. Many beginners are also tempted to buy Expert Advisers or Forex robots. Although certain  EAs may be beneficial, they may have trouble staying competitive as demand shifts. 

When you understand the language it’s written in, you probably won’t be able to adapt your EA to those changes. 

Reliability

Is the trading platform stable enough to achieve the results you want? Being able to rely on the accuracy of quoted rates, the pace of data being transmitted, and quick order execution is vital to successfully trade Forex, especially if you plan to use very short-term strategies like scalping. Real-time information must be available and the platform must be available whenever the Forex market is open. This means you can take advantage of any opportunities that may arise.

Security

Would your assets and personal data be protected? A reliable Forex broker and a good Forex trading platform will have measures in place to protect your information, together with the ability to back up all key account information. They'll segregate your funds from their own funds. If a broker can not explain the steps they will take to protect you and your account balance, it's best to find another broker.

Independent account management

Any Forex trading platform will allow you to independently manage your trades and account without asking your broker to work on your behalf. This means you can act as soon as the market moves, capitalize on opportunities when they occur, and track open positions.

Analysis

Is the technology in-built analysis? Or provide tools to perform technical and fundamental analyzes independently? Many Forex traders do exchange based on technical indicators and can trade much more easily if they can access this information within the trading platform instead of having to leave the platform to find it. This should include real-time personalized maps, links to up-to-date market data and news.

Broker’s trading style

It's important to consider whether a Forex broker and its trading platform suit your trading style. For example, you may want to follow a Forex scalping strategy involving making high amounts of small profits on small currency movements. In this situation, you need to make sure that any prospective broker has a minimum distance between market price and stop-loss and take-profit. Or, if you're new to Forex, you might not be comfortable using the broker's full leverage. With this in mind, check whether the broker allows nominal leverage-wherever you choose the amount of leverage you use in your trading to the maximum limit.

Automated trading functionality

one of the benefits of Forex trading is the ability to open a position, set automatic stop loss and take profit levels to close the trade. More sophisticated platforms should be able to implement trading strategies on your behalf once you have identified the parameters for these strategies. A good trading platform allows a level of flexibility, rather than allowing a trader to constantly monitor any trade.

How to Manage Your Risk When Trading Forex

Before you make your first trade, consider how to effectively manage your Forex market risk. Trading Forex CFDs gives you the opportunity to exchange using leverage, which means you can use a relatively small deposit to reach a greater portion of the market. This then multiplies the potential profits equally. But it also multiplies potential losses. Because the Forex market can move in a rapid way, losses can also occur quickly. Here, risk management is critical to help minimize risks and protect any improvements you make. The key area to consider when managing your Forex trading risk is money management.

How Can You Manage Money When Trading Forex ?

Managing your Forex money depends on the specific steps you use to increase your income, thus mitigating potential losses. Being successful in Forex trading has far more to do with efficient money management than a handful of good trades, and is one of the secrets that distinguish those who consistently trade FX in the long run from those who give up after a few trades. 

Here are some simple money management tips to direct your trading:

Decide how you’re going to finance your trading in advance 

Only one kind of money is suitable for investing, and that’s the kind you’re willing to lose, and ideally without sacrificing your physical and/or mental well-being. Traders are profitable in their own way, while each loser suffers exactly the same losses. Note, using every opportunity to learn. It’s an endless operation!

Define your level of investment 

One of the most common Forex trading problems is “how much do I need to start trading?’ Starting small is a good idea for novice traders, and working your way up. Luckily, various Forex brokers provide sufficient deposit rates needed for opening an account. Be wary of any brokers offering incentives for certain deposit rates, as these can be scams where it will be very difficult to withdraw your money in the future.

Calculate your risk 

Ensure the risk is calculated before the transaction is made. If a trade’s potential profits are smaller than the potential risks, then the trade is probably not a good option. Our Free Forex Calculator allows you to assess your risk. 

Determine the profits required to cover any losses 

In addition to estimating your risks before any trade, it is also worth calculating how much you would need to make in any future trade to recover those funds. Earning money back is often more difficult than losing it, simply because your remaining investment pool is smaller, which means you have to make a bigger return to break even. 

To help you manage your loss and protect your resources, start by trading small amounts of money instead of taking big risks with a large portion of your account balance. If you place your entire account balance on a single trade, it would be easy to lose it all. 

In contrast, if you actually traded a small amount of money, a loss wouldn’t affect your account balance significantly. It would give you the opportunity to learn from your experience and prepare more effectively on your next trade. With this in mind, restricting the capital you are willing to risk to 5 per cent of your account balance would put you in a better position to continue Forex trading over the long term.

Finally

There is a reason why forex is the world’s largest market: it empowers all from central banks to retail investors to see potential profits from global economy-related currency fluctuations. There are different techniques that can be used for currency trading and hedging, such as carry trading, which illustrates how forex players affect the global economy. 

Online trading platforms make financial transactions easier to initiate and complete. You can use them if you want to trade commodities, cryptocurrencies, stocks, and Forex.

FAQ's

Since the growth of online Forex trading, the criteria for opening a Forex account have become simpler. Opening a Forex account today is basically as simple as opening a bank account. 

You do, of course, need to locate a Forex broker first. All Forex retail trading goes through and is handled by a brokerage, which may be a specialist Forex broker or the same brokerage you use to buy and transact in the stock market. 

You will need to fill in a short questionnaire about your financial information and intentions to trade. You’ll also have to provide an ID, and your Forex account institution needs the minimum deposit. This is it. Now, you are free to trade.

The best time to enter the forex market is when it is at its most competitive levels— that’s when trading spreads begin to narrow. In such cases, less money goes to market makers promoting currency trading, leaving more room for the traders to pocket themselves.

Currency trading is heavily leveraged, at times as much as 1,000 to 1. Beginning currency traders may be drawn to the possibility of making big trades from a relatively small account, but this also means that a lot of money can be lost even to a small account. Your risks are not limited to deposit. 

Another danger to remember is that the guidelines on quoting are not uniform. Many are quoted against the U.S. dollar but in the forex market, there is no legislation or norm of quote conventions. 

Beware of any scheme that promises you can get rich easily, whether you choose to trade on a regulated exchange or in off-market exchange.