Most novice traders assume that making a breakthrough in the industry is a walk in the park. However, it takes a proper psychological mindset to conquer the trading world. In addition, a beginner should be consistent and use an ideal trading platform for a series of successes.
Basically, trading platforms are software used to trade, open, close, and manage market positions through intermediaries like online brokers. You can enroll in an online trading platform through brokers at a discounted rate or free in exchange for expert management of your accounts. Altogether, reliable trading platforms should offer optimum rates and plenty of motivating features.
Essentials Of A Trading Platform
In recent times, there has been a massive diversification on the trading platforms. While some use real-time quotes, others have charting tools and news feeds. In some cases, you may even come across a platform using premium research. It is worth noting that each platform has been purposely tailored for particular markets like stock, future market, and currencies.
Currently, there are two trading platforms; commercial and prop. Commercial platforms often focus on retail investors and day traders. They are easy to use with useful features such as charts and news feeds. On the other hand, prop platforms are customized to suit large brokerages and specific trading styles.
Remember that the final decision on a trading platform depends on the volume and trading style of the trader. However, before investing in any trading platform, it is vital to consider mandatory charges and underlying features.
The main reason behind this is that different traders require various features to make proper trading decisions. For instance, options traders may need tools specially created to envision option strategies. Likewise, short-term or day traders may benefit from critical features such as level 2 quotes and market depth charts.
Finally, of course, it goes without saying that most investors prefer inexpensive trading platforms.
Nonetheless, some platforms may offer attractive rates but have limited research and few features. Of course, this approach may not be beneficial to the trader in the long term. Therefore, settle on a trading platform that has the interests of the clients at heart. Then, compare and assess various trading platforms through reviews or feedback ratings.
Still, you may realize that some reviews are laden with bias and incorrect information. On that note, below are imperative tips that would guide you in choosing preferred trading platforms.
1. Broker Fees
One vital aspect as a first-time trader needs to confirm is the broker’s charges. While you cannot ignore the fee entirely, strive to minimize it. On average, brokers charge for opening accounts and transferring funds.
They may also request clients to pay more for annual fees, inactivity fees, subscriptions, or research charges. Before transaction with any broker, take time to learn how the company operates.
Above all, confirm if they have hidden costs that would end up escalating the rates further. Bear in mind that you are on an investment mission and should make profits and not losses in the process.
2. User-friendly Trading Platform
The initial impression on an online trading platform may instigate you to proceed or not. Indeed, the platform should have not only uncomplicated functions but also be easy to comprehend for all. After all, a complicated interface would be a source of confusion to beginners.
As a result, check on the trading style options and guidelines offered for trouble-free trading. Take note that a platform with clear graphics goes a long way in creating an inspirational feeling likely to woe more investors.
3. Account Opening Minimums
You must have noticed brokers who request a certain amount of money to open an account. Contrarily, others, especially the best-ranked brokerages, rarely insist on opening minimums. As a result, it is not always easy for willing traders to pay the $500 or $1k charged.
Instead, experts recommend beginners to transact business with brokerages that do not require money to open an account. Furthermore, nearly everyone is feeling the pinch of the current economic crash. Thus, this may not be the ideal platform for individuals struggling to remain afloat.
4. Favorable Commissions
The dream of every investor is to make impressive returns out of it. Typically, when a trader invests with specific brokerages, they always have two things in mind; customer satisfaction and excellent commission rates.
It would then be pretty discouraging to receive meager commissions for your effort. Thus, confirm from previous reviews on whether the platform pays commissions on time and the rates. Most importantly, compare with other service providers and pick the best paying.
Active forex traders want a trading platform that offers nothing short of reliability and complete ease. Several platforms meet these criteria and more. Yet, keep in mind that you can get a raw deal from rogue brokers.
The thumb rule is to avoid trusting a broker without enough reviews on their previous performance. In a nutshell, do not be in a rush to make an investment that can burn your fingers.