An online trading platform (electronic trading platform) is a piece of software that is used for: opening, closing and managing market positions. An online broker is the financial intermediary. The best trading platforms offer a mix of low fees and platform capabilities.
The capabilities of trading platforms range from basic trade entry screens to very advanced like streaming quotes and charts.
Things to consider when choosing a trading platform
When choosing a trading platform you should consider multiple different factors. What type of instruments do you want to trade, how often will you trade and at what hours, are just a few.
Picking the best broker should always be based on your individual needs.
We base our reviews and roundups by analyzing the following:
Fees and Commissions
Regulation and Authorization
Available financial markets
We also analyze brokers with our “seed of trusted websites”
How to pick an online trading platform?
Here are a few key points you should consider before choosing a platform:
Minimum Deposits – the amount of money you need to open an account. Some brokers have lower minimum deposits than others.
Account Types – sometimes brokers offer different types and tiers of accounts. Accounts come with different costs and perks.
Fee Structure – fees can stack up quickly. Make sure you read all of the fine print, so you are not surprised by hidden costs.
Costs of Trading – For day traders, cost of trading is a very important factor. Lower commissions will increase your profit over time.
Margin rates – some brokers allow margin-approved brokerage accounts. For example, if you have $5,000 in your account you could buy up to $10,000 worth of assets. In this case the brokerage firm would loan you the 50%.
Platform functionality and features
Trading platforms differ from in the functionality and features they offer. Most brokers offer three platforms for trading: web (browser based), desktop and mobile. Depending on your needs and skill level, you might need different tools, charting, watch lists or other features. For example, if you want to be able to open or close trades on the go, a robust mobile trading app is a must.
Are you investing or trading?
There is a distinction between trading and investing. Usually when people talk about trading they mean purchasing assets to hold for a few days. With investing, assets are held for a longer period of time.