A trading platform is computer software which is used for trading and financial negotiations. When online, they are often offered by brokers at a discounted rate or for free in exchange for managing a funded account or making a specific number of trades in a certain amount of time.
The best platforms will be the ones that offer a mix of excellent features and low fees.
What Are Trading Platforms Used For?
From TD Ameritrade to MetaTrader 5 or MT5, trading platforms are designed to connect buyers and sellers. In some cases, the use of trading platforms has superseded traditional market and telephone trading.
They allow traders to complete transactions from wherever they are in the world as long as they have an internet connection.
Trading platforms enable immediate execution of orders- an extremely important feature in the world of trading which is incredibly fast paced. They also provide access to some of the most exclusive specialized markets that were previously not available to the wider trading market as they were only intended to be used by a limited number of companies.
Specially designed platforms are designed for specific types of trading strategy. The implementation of high-frequency trading, for example. Trading platforms can also be used to provide tools that help to analyze and chart trades which can especially help newer traders to develop their strategy for trading. Finally, and most importantly, most platforms will offer live, up to the minute information of market prices as a standard part of their service.
Trading Platform Basics
Trading platforms will often come with a lot of additional features such as quotes, charting tools, news feeds. They may also be tailored specifically to different markets such as stocks, options, currencies or futures markets.
There are two types of trading platforms:
Prop Platforms– Which are customized platforms that have been created by large brokerages to suit a specific trading style and other requirements.
Commercial Platforms– Commonly targeted at day traders and retail investors. They are easy to use and come with a range of additional features such as investor education and research.
Traders will use a variety of trading platforms which will depend highly on their trading style and the rate in which they trade.
For newcomers to the world of trading, then it may be worth investing a little time in completing a Trading For Beginners Course, which will give you an in-depth introduction to the world of trading.
In the courses you will learn the terminology of the market, how to identify trends, and how to build your own trading system.
Trading platforms are, arguably, one of the greatest developments to happen to the stock market. They are of a huge benefit to the individual trader and for the market in general.