Sign In   Register


NO21 - Primer on Forex Trading Platforms

"If you want to trade any of the financial markets, then you need some kind of an interface that connects you to the markets. Thus, a trading platform is exactly that piece of software that allows you do access and trade the markets. A forex trading platform obviously connects you to the currency markets via your forex broker. It is one of the main entry points for you into the world of currencies. As a result, there is a lot riding on the forex trading platform. In this article, we give you a primer into the various forex trading platforms and also outline what are the most important things that a forex trading platform does for you. By the end of reading this article, you should be able to gain a fair amount of knowledge about the forex trading platform and also gain familiarity with some of the most commonly used trading platforms if you want to trade forex."

Forex trading platform is a bridge that connects you to your broker. Your forex broker in turn is the bridge that connects you to the wider forex markets. As you can see, a forex trading platform is a crucial piece of software that is essential when you are trading forex.

This of a forex trading platform as the essential element the whole process of forex trading. Using the forex trading platform, you execute the trades which are then passed over to the broader markets. As a result, a forex trading platform is quite important for you as a trader.

What are the main functions of a forex trading platform?

The main function of a forex trading platform is that enables you access to the market data and allows you send your traders via your broker to the markets. Think of a forex trading platform as a window to the world of trading currencies.

So, what are the things that are the most critical when it comes to using a forex trading platform? Let’s start with the most essential things that a forex trading platform should have.

1. Ability to connect the markets

A forex trading platform allows you access to the currency markets. This means, being able to access the historical data and also the ability to see the bid and ask prices. With this information, you are then able to view the price chart of the security that you are trading and gain a sense of where the markets are heading.

2. Allows you to conduct your studies

A forex trading platform allows you to conduct your own study of the security that is being analyzed. This means, giving you access to a number of technical tools also known as technical indicators and drawing tools. Because trading is mostly done via technical analysis, this is an essential feature when it comes to using a forex trading platform.

3. Executing orders and sending them to your broker

After you have access to the markets and you are able to conduct your technical studies, the obvious next step is in allowing you to trade. You can trade the forex markets by placing orders from the forex trading platform.

When you place an order (ex: a market buy order), the forex trading platform communicates this to your broker in real time and in milliseconds. The forex broker than executes these orders into the broader market (or at times execute your order in-house). The speed at which your orders are executed forms an integral part of a forex trading platform.

There are many types of orders that you can place and essentially, your forex trading platform should allow you to do this and also translate the same to your forex broker without any delays.

4. Flexibility to write your own code or to execute automated trading solutions

A good forex trading platform should also come with an in-built feature that allows you to code your own custom trading indicators. Because the financial markets are so vast, different traders have different needs.

Thus, besides the regular technical indicators that come by default, the forex trading platform should also allow you to code and also run automated trading strategies. Automated trading is where you build a piece of code that runs in your forex trading platform and trades automatically when the conditions are met.

What are the major forex trading platforms that you can use?

There are a number of trading platforms that are available for the trader these days. Among these, the trading platforms from Metaquotes are the most popular. These are known as the MT4 and the MT5 trading platform.

Because they are free of cost, both these trading platforms have a wide support of the trading community. Therefore, the costs for developing new customized indicators or automated trading software is also much cheaper.

Besides the trading platforms from Metaquotes, you also have cTrader, which is offered by Spotware. The cTrader platform is relatively new but it is still quite a favorite and has a lot of catching up to do. The above two trading platforms are the ones that you will most likely come across when you are trading forex.

NO21 01 MT4

MT4 Trading Platform by Metaquotes


One of the reasons for their popularity is that these trading platforms can be downloaded directly from your forex broker. They are ready to use (you just need to open a trading account with your broker) as soon as you download and install them.

NO21 02 ctrader platform

cTrader Trading Platform by SpotWare


There are a few other proprietary forex trading platforms, but these are standalone platforms, which means that you will have to connect via the data feed to trade with your broker. These make the other forex trading platforms somewhat expensive.

Read 911 times Last modified on Sunday, 12 May 2019 08:21