Before we get onto the main chunk of the course, we must get accustomed to a trading platform with forex trading for beginners.
What is a trading platform?
It’s either a piece of software or a website that is used to access the markets and execute trades. Sometimes they are called trading terminals.
The forex trading platform will be your gateway to the markets using the charting packages included to perform your daily, weekly or monthly analysis.
Without a trading terminal/platform, just like back in the earlier days of trading, you would have to call up your broker to execute a trade. Now, it’s a simple click (or tap) of a button!
It is important to note that all trading platforms are not the same.
Some of the more advanced charting packages are reserved for software packages only.
Whereas the website trading platforms allow you to trade at any time and anywhere.
Every single broker you sign up for will provide either an online web trading platform or a software version.
You should not choose a broker because of their platform, and vice versa.
We will discuss more brokers shortly.
Throughout this course, we will be using the MT4 platform to demonstrate how to trade the forex markets. Although, all the lessons learned are easily transferrable to other platforms.
As you can imagine there are hundreds of brokers, whereas there is only one MT4 platform – which is used by the majority of the brokers – therefore it makes sense to teach on this platform.
Not got an MT4 platform yet? Click here
Web Trading Platforms:
Web platforms delivered by brokers are very reliable, stable, and offer quick executions.
Some web platforms come with third-party analysis software that will give you chart pattern recognition alerts, which are okay if you want to blindly follow another third party.
But you are not here to do that, you are here to learn to profit from the markets yourself, right?
In addition to that, the spreads can be fixed/a lot tighter than what is offered on a software package, but as time and technology have advanced – only good, respected, and legitimate brokers will offer the same spreads on both software and web platforms.
With that being said, with web platforms, you have 0 control over the technical indicators (apart from adjusting the settings of the indicator). For example, are you looking to trade off the Donchian Chanel? Most brokers don’t have this. So if you use specific indicators that are not the norm – then this may not be the best route.
Some brokers won’t even allow you to adjust the Fibonacci Retracement levels, which is a major letdown, to be honest.
We must remember, brokers are not technology companies – they are market wholesalers providing execution of trades for you. So, the technology behind a broker’s web platform is only secondary to their service. Remember this. Most web platforms are simply white-labelled solutions from another technology provider or broker.
With that being said, there is an alternative from a broker’s web platform and that is using TradingView.
You can read our TradingView Review here.
Software Trading Platforms:
The major brokers also offer software trading platform solutions for their clients. These are downloadable programs that you can install on your computer or downloadable mobile app solutions.
The most common software trading platform is provided by MetaQuotes called MetaTrader 4. There are two other popular choices, but these are not offered by all brokerages.
These are called NinjaTrader & cTrader – both feature similar functions as MetaTrader 4 but the core focus is on trading automation.
Due to it’s widest adoption rate, the MetaTrader 4 platform will be the most likely platform you will be using. There are no advantages or disadvantages to the NinjaTrader & cTrader platforms.
With that being said, why would you choose to download and install a software trading platform over the web platform?
Quite simply, the web platforms are customisable, feature locked in, and standardised. This is partly due to the fact that they have to offer the same platform to all of their clients.
Whereas the software trading platforms you are able to do the following:
- Customise chart layout
- Customise trading indicators
- Add trading indicators
- Add your own bespoke indicators
- Add automation rules to trading
- Add more advanced order types and stop losses
- Save all analysis on each asset easily
At the end of the day, it doesn’t matter what you use to trade – the most important aspect of all of this is the trading costs and execution of each trade.
We will discuss more brokers, how they work and what you must look for in a broker before even entertaining the idea of opening an account.