Forex traders have a lot riding on the trades that they place on a regular basis. Without the comfort of working with a solid forex broker, and being able to rely on the forex platform that one trades on, a forex trader might not be able to sleep at night. There are numerous elements that are associated with a forex trading platform, and if the forex trader does not do sufficient homework they will potentially have issues down the road.
There are numerous brokers presently on the street and it is not always easy to differentiate from one broker to the next. Some of the top brokers on the street are; Plus500, eToro, FxPro and iFOREX. Again, it is the responsibility of a forex trader to do their research to determine the difference between one broker and their platform from the other.
When trading, there are several differentiating factors that will go into why one forex platform may be different than the other. The technology behind a forex platform is key to a forex trader.
There should be no misunderstanding as it relates to the technology associated with the forex online platform provided to the forex trader.
When comparing forex platforms, the trader should be certain that they can trade remotely, either through their mobile device or laptop, in addition to a hard connection to their desktop. Moreover, the forex trader wants to be certain that the trades that he is placing through their broker are encrypted.
The fundamental and technical tools offered to a forex trader via the forex platforms which they utilize is also an important differentiating aspect of determining the broker the forex trader goes with. The forex trader wants to be certain that they have the ability to utilize a full package of fundamental as well as technical tools.
From a fundamental point of view, the trader wants to be certain that they can utilize a strong financial calendar which will provide the trader the ability to map out all of the important financial announcements which will be broadcasted within a specific time frame.
Some of these announcements would include market indicators such as; Consumer Price Index (CPI), Producer Price Index (PPI) and Gross Domestic Product (GDP). In addition, the forex trader wants to be certain that the technical tools that they utilize, though, the trading platform will allow them to do things like trading signals, charting packages etc.
One of the most important elements of a trading platform utilized by forex brokers is the availability of assistance to the forex trader in times of need. Many forex traders overlook the importance of customer service. There is a great deal of value added that comes along with a strong customer service team.
The value added can’t be overlooked. The forex trader needs to keep in mind the many things that can go wrong when trading. The better brokers on the street can be contacted 24/5, and have dedicated account managers that can assist you.
A forex trading platform can also help you design a trading strategy. Many have back-testing modules that can use historical data to help you determine if a trading strategy that you have used in the past will work in the future. You can use a combination of technical analysis and statistical analysis to see if your strategy will work.
Many platforms will provide you with the statistics you need to see if the strategy you plan to use worked at different periods in the past. One key component is to try multiple time period to make sure that you do not fit the curve. This means that you found a strategy that worked at one period in time but might not work during many periods.
If you design a strategy that is a trend following trading strategy, you want to make sure that you win more on successful trades than you lose on unsuccessful trades. This is because the market usually only trend 30% of the time, and therefore, you will lose more than you win overall.
You will also need to incorporate slippage in your trading strategy. Slippage is the commission, bid/offer spread, and the concept that you might not be able to transact exactly at your trading price every time you generate a trading signal.
By adding commissions and slippage to your strategy, you are giving yourself room to determine if the strategy can really be successful. Many forex trading platforms also provide you with a demonstration account where you can test your strategy on live data before you take it for a run with real capital.
In closing, the forex trader should put a lot of stock in the forex platform they are interested in utilizing. With the proper trading platforms, the forex broker has the ability to stay in front of the curve and rack up consistent winning trades.
Veronica Boog says
one more thing I wish to ad:
Simplicity is key of success, if platform is overcrowded with chart options, tools for analyze it can over-strand from main objective and make him decisions even harder.
Abhilash P S says
Your article looks informative, foreign currency exchange and send money abroad is a risky scheme because we should found a trustworthy broker probably best in the business. I personally like your article. Keep sharing….
Thank you for sharing…..
Well written Informative article.