If you have become interested in investing and trading, there are many things to understand. You may want to buy shares from companies like Facebook, Samsung, Apple, Tesla, or Netflix. For that, you will need a trading platform and an account with an online broker. Now, you may wonder, “What is trading platform?”
A trading platform is a network-based medium that lets investors and traders place trades through financial intermediates. You can also track accounts and use various tools for successful trading. There are different online trading platforms to consider.
In this article, I will talk about trading platforms and their basics. You will also learn about choosing the right trading platform and why it is important.
What Is a Trading Platform?
A trading platform is an online platform that allows people to trade in a networked environment. For example, mobile trading where you can trade anything from stocks to cryptocurrencies. In this age of the internet, online trading has become quite a popular method of exchanging financial products.
The brokers have opened their businesses online and offer different trading platforms. Traders can use these platforms for free or discount prices provided by financial intermediaries or online brokers. The amount of discount mostly depends on maintaining a funded account and how many trades are made per month.
In the past, people who wanted to invest and trade in the stock market had to call a brokerage firm to hire a broker and request them to purchase a specific amount of stocks from a selected company. Then the broker would inform about the current market price of the company stocks and confirm the order.
After a person confirms the trading or investment, they also have to pay a fee to the broker. Finally, the broker places orders for the stocks. As you can see, it took a long time, and the traders mostly had to depend on the brokers.
But now, you can open your trading account on online trading platforms. You can easily open, manage and close your accounts from your device sitting at your home. There is no need to buy products from specific places or banks as you can easily get them online. Thus, transactions have become simple, and you can save a lot of time.
Basics of Trading Platforms
A good trading platform will have useful features at an affordable cost. It should have various features and services, such as news feed, quotes in real-time, charting software, and options for market analysis. Besides, users must be able to tailor services based on their specific markets, like stocks, currency, and others.
Types of Trading Platform
You will see two types of trading platforms: commercial websites and prop platforms. The commercial websites are for day traders and retail investors. These websites are easy to use as they have a wide range of features like charts and news feeds. Using these tools and features, you can educate yourself and do research.
Then, there is the prop platform. Large brokerage firms designed this software or applications for traders and investors who want to customize the platform according to their trading style requirements. Thus, this platform is best suited for experienced traders and investors.
Choosing the Right Trading Platform
Beginners often choose to confess while choosing a trading platform for the first time. While considering a trading platform, look for underlying features and the fees for using the platform.
Considering the features is important as different traders require unique features and tools for their trades. For example, if you are a Day trader or short-term trader, you will need features such as Level 2 quotes and market maker depth charts. These features are necessary for making trade decisions.
On the other hand, options traders are benefited from specifically designed tools to visualize options strategies.
Next, consider the fees of using the trading platform. Traders often go for low-priced trading platforms. For instance, traders following scalping trading strategies prefer low-cost platforms.
Although low-cost trading platforms seem to be preferable for various reasons, traders should consider the features and tools they are getting. Low-priced trading platforms with few features and options are not beneficial for your business, especially for beginners in trading. Therefore, find a platform that offers essential features at affordable prices.
If you have a list of trading platforms to choose from, check the reputation of the intermediary or brokers. You can also read the feedback ratings and customer reviews to learn more about the platform.
Also, traders may have to fulfill some requirements to access the trading platforms. These requirements are set by the brokers. They may set an amount as equity the traders must have in their accounts.
For example, a day trading platform may set a minimum of $25,000 in equity that a trader’s account should have. As options trading platforms are more advanced, traders will need optional approval to use them.
Best Trading Platforms
If you search for trading platforms, you will find hundreds of them. Here are some of the best platforms you should know about:
- RoboMarkets: We at RoboMarkets are not just here to provide you a space for trading. We are also here to help you trade and ensure you make the right investments. For this, we offer a wide variety of tools that can help anyone in the trading career shine.
- Fidelity: It is one of the best trading platforms for beginner-level traders and investors. Fidelity cost is low, and users will get great tools to manage and analyze their accounts. Moreover, it is adding more features at a low cost every year.
- TD Ameritrade: This is another popular trading platform for both traders and investors. TD Ameritrade has become even more advanced after acquiring Thinkorswim. The platform is popular for good customer service and amazing features. It also has a mobile app version for users.
- Interactive Brokers: It is an interest-based platform best for more experienced traders and investors. Users can have exceptional features and global market access at a low cost. Interactive Brokers platform is overall best for trading, options trading, mobile trading, feature trading, and professional trading.
- TradeStation: It is most popular among algorithmic traders that choose to follow trading strategies via automated scripts developed via EasyLanguage. TradeStation has one of the robust desktop platforms, and it also has a mobile version.
- Robinhood: The platform is well known for its easy mobile app, which makes it appealing to beginners. Now it also has a desktop version. The software is easy to use, and it is commission-free.
By now, you must have learned, “What is a trading platform?” If you are interested in online trading, you should definitely learn all the basics of using a trading platform. When you choose a platform, make sure it provides you with all the support at an affordable price.