How do trading platforms work?

To become a successful trader, you need to be sure to use a sound, robust, and profitable trading strategy. But you also need a good trading platform. You’ve decided to start trading, but do not really know yet which trading platform to use for your trading style and what to look for when choosing a platform? No worries, we will cover the basics here and talk about the most popular trading platforms available.

Let’s start by explaining what a trading platform is, how it works, and why choosing one is essential to your trading success. 

A trading platform is simply the platform you use to analyse the markets, as well as open and close your trading positions. So a trading platform allows you to invest in the financial markets. Of course, a trading platform cannot work without a broker acting as an intermediary between you and the markets and offering your enough liquidity for you to easily and quickly open and close your position. 

A broker will indeed usually offer you access to the markets with one trading platform (or more) you can use to implement your trading strategy. These platforms can either be developed in-house with tailored features developed by the brokers or developed by companies that solely focus on creating user-friendly and dedicated trading software.

The best trading platforms are the ones with low fees and robust features. There are many platforms on the market, with the most popular being MetaTrader (MT4 and MT5), ProRealTime, TradingView, Ninja Trader, or cTrader. 

However, not all trading platforms are the same and some are more suitable for certain types of trading than others. You should therefore start by determining what kind of trader you are and what trading style you will use to invest in the markets. 

So ask yourself the right questions. 

Are you going to be an active trader? Will you use basic or advanced technical analysis? Do you want to automate your trading? Do you know how to program, or do you need help to create trading robots? Do you want to do copy-trading?

As you can see, in order to choose the right trading platform, it is important to determine your trading needs and investment style first. 

Then, you need to compare the different platforms according to different criteria, such as ease of use, advanced trading options, devices that can be used to access the platform, platform robustness, responsiveness, and reliability, the possibility of automated trading, the markets offered by the platform, the trading styles allowed (hedging, scalping, etc.), possibilities to personalize your trading, the different trading orders you can use, the security of data, etc.

You must also ensure that the trading software you wish to use is known and recognized by the trading community, as you don’t want to use one that is not really popular, relevant, nor professional. Among the available options, MetaTrader is one of the most popular and approved trading platforms, especially for technical and automated trading.

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