Online trading is the most efficient way to trade the capital markets. Prior to opening an account, you should evaluate your trading needs to determine which trading platform fits your online trading goals.
Whether you trade at home, in your office or on the go, you want to make sure that the platform you choose has the capabilities to handle your online trading needs.
Forex Trading for Beginners In 2020
1) Capital Markets Online Trading
The days of trading the capital markets via telephone are now in the rear-view mirror. Most investors trade using an online trading platform that provides them access to a plethora of securities including foreign exchange currency pairs, commodities (such as oil, natural gas and gold), indices (including some of the larger indices like the S&P 500 and the DAX) and shares (like Facebook, Amazon and Apple).
Access to many different types of securities allows an investor to trade the markets that are moving and avoid sectors that are trading sideways. In addition, many online brokers now offer exchange traded funds (ETFs) that focus on specific market sectors. This could include the financial sector, the energy sector or even utilities.
2) Types of Platforms
Generally, the most sophisticated platforms are ones where you download the software to your personal computer. The software is extensive and generally provides charting software, where a trader can perform technical analysis. These platforms sometimes offer back testing, allowing a trader to see if a strategy they are interested in worked in the past.
Since a downloadable software needs to be installed on a specific computer, if you plan on exclusively using this platform you will need to download the software on all the computers you plan on using to trade. An alternative would be to use a web based browser platform.
3) Browser and Mobile Platforms
Browser platforms are generally less sophisticated relative to downloadable platforms, but many provide most of the same functionality. This would allow you to log on any place you can access the internet and trade the capital markets in your office or at home. Lastly, if you are a trader that is constantly on the go, you should consider using a mobile platform to place your trades and manage your positions.
A mobile platform works on smart phone and tablets and generally has many of the features available on a browser based platform. Mobile platforms allow you to make trades, and monitor positions as well as provide you with the ability to transfer funds into and out of your account. Some have charting capabilities, but they are usually not as sophisticated as browser or downloadable platforms.
4) Test Drive Each Platform
Prior to risking your capital, you should spend some time testing out each platform. That way you can understand how it works and the extent of the functionality available. Many forex brokers offer a demonstration account that provides virtual capital.
This allows you to trade the markets and experience the platform in real-time prior to risking your hard-earned funds. Before you take the plunge, make sure the platform/s you choose meet all your trading requirements.