Trading platforms allow individuals or institutions to trade the markets by entering their buy and sell executions. These softwares have various beneficial features, including charts, analytical tools, order types, asset quotes, and more to help participants improve their overall consistency.
In the article, we have handpicked the best trading platforms in 2021 to help you choose the right one for your needs.
What is a trading platform?
The financial industry consists of market participants, exchanges, banks, and institutions. The overall combined activity of each sitting at their desk results in an up and down movement of an asset’s price. It is possible to join the fight between bulls and bears by selecting a brokerage, installing a trading platform, and executing trades.
Image 1. Metatrader 4 is usually thought of as industry standard in terms of trading platforms.
Third-party companies develop trading software such as MetaTrader corporation, cTrader, etc., and a license is given to brokers for public use. Many brokerages nowadays also have their own platforms with added benefits exclusive to their customers.
3 ways you can benefit from the best trading platform
In an industry where the drop rate is 90%, you must go into the markets with the right set of tools and services. Even a small edge can be a game-changer at the end of the day. You can reap the following benefits from the best trading platform:
- Speed: One of the significant benefits of a trading platform is the speed at which you can analyze and execute trades. Scalpers and day traders can make particular use of the software as their trading style demands fast services.
- Backtesting: Top trading platforms allow you to test out your strategies by running historical data dating back as much as 40 years ago through the screen. Through running simulations, one can open and close positions and scan various time frames similar to what you would do in real market conditions. Strategy testers also help in backtesting your automated trading software and indicators in a matter of moment.
- Charting tools: The best platforms have excellent charting tools. Trendlines, channels, Fibonacci, templates, patterns, scales, etc., are a few to name. A wide range of tools ensures that you can do your analysis in the best possible way.
Our Picks for Best Trading Platform
The trading platforms mentioned above are the best in the industry at facilitating traders. They are handpicked after months of careful testing that ensure their credibility and services. The software covers all essential features including, quality charts, EA/indicator support, news updates, real-time monitoring, mobile apps, time frames, order types, and many more.
How does a Trading Platform work?
When you buy or sell an instrument through a trading platform, the software takes the place of a human broker. Your order goes to the exchange when the program processes it. Stop loss, profits, buy/sell stop/limit are market pending orders executed by the platform as the price hits them.
For example, you spot a potential setup on EUR/USD and decide to go long on the pair at 1.24000 when the market hits it from the bottom. Setting up a buy stop with designated SL (stop Loss) and TP (take profit) , you can forget everything as your trading program will process, send and execute the position automatically as soon as the asset reaches the desired level.
Top market platforms ensure that your positions reach the exchange without any technical hiccups. One can also see the latency of their connection. The companies who hand out this software to brokers make money by distributing the license. Brokerages then distribute the program to traders, usually free of cost. The price is kept at a lower end to attract people who pay a commission while trading.
Steps to Use a trading platform
Find a suitable trading platform
Not all trading platforms will suit your liking. Check out if the software has features that compliment your style and strategy.
Learn how to use it
All the trading platforms do come with a manual. There are also lots of videos that you may find on the company’s website or youtube to grab the essentials better.
As soon as you learn how to use the platform, it’s time to begin trading. Test out your strategy on a demo or dive straight into live as your choice.
What are the advantages of Using a Trading Platform
The best trading platforms have the following advantages for traders:
- Trading through an online platform allows you to be in the markets at your comfort. You are not restricted to show up on an exchange or trading desk at a specific time; instead, you can stay at home and trade whenever needed.
- Trading platforms are beneficial in terms of speeds. Through one-click trading, you can send your orders immediately in the market or click on the cross button to exit a position in no time.
- There is no need to call your broker and place your trades via phone as the trading software accomplishes the same task.
- Many essential tools and tweaks are available to help you trade. Having the best charting instrument can improve your overall consistency as you understand the market better.
- Experienced traders and mentors give out their signals through the best trading platforms. Copying their positions can make up for easy gains.
- Expert advisors are useful for managing your trades or generating passive income. Trading platforms support indicators and automated trading software.
- You don’t need to buy a particular service to access real market quotes, feed, and level two data. The best trading platforms have all these within their interface.
What are the disadvantages of Using a Trading Platform
The best trading platforms have the following disadvantages for traders:
- As trading becomes equal to a single mouse click away, you risk putting up unnecessary trades, putting pressure on your account and psychology.
- You may also commit errors by clicking any wrong button. While this may not be much detrimental for smaller trade sizes, it does have a commission that you’ll have to pay.
- Any technical problems in the platform may be big trouble for you as it may turn a potential winner into a loser.
- Trading through a platform online is similar to gambling, where a novice or even an amateur can come under the trap of easy gains.
Expert Tip on Selecting a Trading Platform
It is essential to look out for charts and the associated tools you can use to draw on them. There won’t be any need to buy any packages from custom charting websites as your trading platform allows you to analyze markets on the spot. Scalpers are in dire need of spotting trades quickly alongside day traders to some extent where they can benefit from such trading software.
How to choose the best trading platform for you?
Choosing the best trading platform can be thought of as a matter of personal preference. However, there are some necessary points that one must look over to ensure they don’t get puzzled in the process. The questions below will answer most of your questions on selecting the best software for executing trades on the market.
Is the (Platform Regulated?
Regulation is a term that is mostly associated with the broker that’s offering the platform. Trading software provides licenses to brokerages who then pass out the program to traders.
What fees and charges apply?
The costs are only applicable to a broker who buys the license. Traders don’t have to pay a fee. Some brokers may charge inactivity and platform fee, but their number is limited.
What devices can you use?
Most of the trading platforms now support all devices such as android and iOS, Linux, and so on. There is also a web platform to trade within your browser.
What assets are available to trade on a Platform?
The available instruments depend on the broker. Many companies may offer up to 10,000+ assets to trade through the trading platform.
Is there a demo account?
A demo account is always available to allow traders to get a feel of the markets. Trading platforms such as MetaTrader can be downloaded directly from their website, and trades can be executed on the paper money.
What is the account minimum?
The minimum amount of money to be deposited in your account is again a broker feature. Many forex brokers allow you to deposit as low as 1$, while for stocks, it may be 200$.
What educational resources are available?
Trading platforms rarely have educational resources available on their website. Nonetheless, a user manual is always there to guide you in using the program.
Is there help and support available?
Yes, help and support are readily available from the owner’s website. You can also contact your broker if you encounter any problem with the platform, and they will forward it to the software managers.
Can I use this from anywhere?
Yes, nowadays, you can use your trading software anywhere by installing it on your laptop or cell phone. You only need an internet connection, platform, and account to test your medal in the financial industry.
Frequently Asked Questions
MetaTrader currently has the best reputation among the trading platforms on the market.
Again the MT4 (MetaTrader 4) is seen as the best platform for beginners which is currently available.
Trading platforms offer a variety of different tools, from technical indicators to drawing features that help to analyse charts.
It takes only a few seconds or a minute to download a platform or app. It will depend on your internet speed.
The software creators of the platform make money by selling its license to brokers.