A trading platform is a software which people use for trading. Brokers frequently offer online platforms either for free or at a discount rate. They usually do it in exchange for maintaining a funded account or making a specified number of trades per month. Furthermore, the best trading platforms offer a mix of low fees and robust features.
The platform enables investors to place trades and monitor their accounts through financial intermediaries. However, the platforms often come bundled with other features, such as charting tools, news feeds, real-time quotes, and sometimes even premium research. Some platforms are specifically tailored to specific markets, such as currencies, stocks, futures, or options markets.
Trading platforms have two types: commercial platforms and prop platforms. Prop platforms are customized platforms. Large brokerages develop them to suit their specific requirements and trading style. On the other hand, day traders and retail investors target commercial platforms, as they are characterized by an assortment of helpful features which are easy to use. Traders use a variety of different platforms, choosing them according to their trading style and volume.
How should you choose the platform?
When deciding between trading platforms, investors and traders should consider available features and the fees involved. Short-term traders or day traders may require market maker depth charts and features like Level 2 quotes to help them in decision-making. Meanwhile, options traders will likely need tools specifically designed to visualize options strategies.
Fees are an important consideration when you are choosing trading platforms. Traders who employ scalping as a trading strategy prefer to gravitate towards platforms with low fees. Usually, lower fees are always preferable. However, there may be trade-offs to consider, as well. Low fees may not be advantageous if they mean fewer features and informational research, which won’t help you trade successfully. Sometimes, it’s better to pay more for better tools. They will help you to generate more profit.