Theseplatformsmayalsoprovidetoolsforresearchinadditiontotoolsfororderprocessing.
Currencytradingplatformsprovidetoolstotradersforexecutingbuyandsellordersintheforexmarkets.Theplatformsaremadeavailablebyforexbrokersfortheuseofclients.Someforexbrokersoffertheirowncustomtradingplatformsfororderprocessingandresearch,butmanyprovideorderaccessthroughintegratedtradingandresearchprograms.
Manybrokeragesofferawidearrayofcurrencytradingplatformsolutionsforbothretailandinstitutionalclients.Intheinstitutionalmarkets,bankingorbrokeragecompaniesmayalsobuildproprietarycurrencytradingplatformstomeettheirinternalneedswithtradesexecutedthroughinstitutionaltradingchannels.
Choosingthebestchartingsoftwaregenerallydependsonatrader’spersonalneedsandexperience.Considerationsincludethetypeoftechnicalanalysistheywishtoundertake,thevolumeordurationoftheirtrades,andthekindofdevicetheywanttousetoviewthecharts.Knowledgeabletraderswillmakenoteofthedatasourcesfromwhichchartingsolutionspulltheirpricesandotherinformation,ensuringthatthosesourcesareuptodate,reliable,andaccurate.
ByfaroneofthemostpopularcurrencytradingplatformsisMetaTrader5(MT5).MT5wasreleasedin2010asanadditionalplatformtoMetaTrader4,whichisalsooneofthemostpopularcurrencytradingplatforms;morepopularthanMT5.
Forbrokerages,MetaTrader4costs$100,000perlicenseinupfrontfees,aswellascostsrelatedtohosting,bridging,andsupport,whichruninthethousandsofdollarspermonth.
Botharenotopen-sourcesoftwarebutareopenlyextensibleandcustomizableplatformsthatallowtradingsystemdeveloperstheabilitytocreatescriptsandautomatedtradingalgorithmsthatexecutewithintheirframework.
MT4iswidelyusedamongretailtraders,somuchsothatmanybrokersthatoffertheirownplatformsalsoofferMT4integrationsothatthoseretailtradersfamiliarwiththeplatformwillhavetheabilitytomigratetheirowntoolstothenewbrokeragewithease.
Retailforextraderstypicallylookforsomepopularfeatureswhenidentifyingandusingacurrencytradingplatform.Traderslookforeaseofinstallationanduse,whichcanleadtocomparisonsofweb-basedplatformsversusdownloadableplatforms.Inthisarea,tradersmayhavetheoptiontochooseaplatformfromtheirbrokeragedirectlyorgowithanindependentservice.
BrokerssuchasInteractiveBrokersorTDAmeritradearepopularbrokerageoptionsbecausetheyofferaccesstoallassetclasses,butfirmssuchasIGorOANDAarepopularamongforextradersbecauseoftheirspecializationinthatmarketandtheircompetitiverates.
Mostforexplatformswillallowatradertoopenademoaccountpriortofundingafullaccount.Tryingoutseveralforexsoftwaretradingplatformsthroughatrialperiodcanhelpatraderdecideonthebestonefortheirtradingneeds.
Forexample,ifasoftwareprogramusingcriteriatheusersetsidentifiesacurrencypairtradethatsatisfiesthepredeterminedparametersforprofitability,itbroadcastsabuyorsellalertandautomaticallymakesthetrade.
Amajoradvantageofautomatedforextradingsoftwareistheeliminationofemotionalandpsychologicalinfluencesdeterminingtradingdecisionsinfavorofacold,logicalapproachtothemarket.
Aswithalltechnology,automatedtradingplatformsarenotwithoutissues.Ifthereisalossofconnectiontothenetwork,atrademaynotgothrough,resultinginamissedopportunityorcertifyingaloss.Therecanalsobeadiscrepancybetweenthetheoreticaltesttradesandtheactualtrades.
Automatedsystemsalsorequireconstantmonitoring,duetotheaforementionedtechnicalissues,aswellasanomaliesinthetradingplatform,suchasmissedordersorduplicateorders.
IntheU.S.,forextradersarelimitedtoa50:1leverageratio,whichisamarginrateof2%.Dependingonthebroker,marginratescanbehigher,suchas3%or4%.The50:1ratiomostoftenappliestoregularcurrencypairs,whereasforexoticpairs,theleverageratioistypically20:1,whichisa5%rate.
Thecostofforextradingplatformsvariesgreatlydependingonthetypeofplatformandthebrokerofferingtheplatform.Traderstypicallyhavetopayacostforthelicensetousetheplatformaswellasfeespertradeorblockoftrades.Thetraderalsohastopaycommissionsontheirtradingactivity.
Acurrencytradingplatformisatoolthatcurrencybrokersoffertheirclientsinordertotradeforex.Theplatformscanbeonline,web-basedportals,mobileapps,downloadablesoftware,oranycombination.Thesetoolsallowtraderstoresearchmarkets,teststrategies,setupbuyandsellsignals,andexecuteorders.Currencytradingplatformshavegreatlyimprovedthetradingenvironmentforforextradersandtoday,successfulforextradingisalmostimpossiblewithoutthem.