Trading platform is the most important tool that every trader must have in order to carry out trading activities. Trading platform is a combination of software and hardware, but traders are more familiar with its software form. Trading platform provides a convenient interface for both traders and brokers to interact with each other.
There are several types of trading platform that are available today. The most popular of them is the one that is installed on PC. Due to the cumbersome and complicated interface of the platform, which includes mostly graphs, PC version, which conveniently accommodates heavy-duty data processing, is still the most preferred trading platform type. Other types of trading platform include cloud-based software that is accessed using internet browser and mobile software that can be installed on portable devices like smartphones, tablets and PDAs.
Traders normally use a fully functional trading platform that their brokers give to them. Although the license to use a trading platform is usually purchased, brokers generally don’t commercialize their software. They provide it for free to their traders, who are their clients, as a part of traders’ starter pack. It is the broker who either buys the software or purchases the license. This mechanism is true for both live account and practice account.
Different trading platforms may use different mechanisms; however, in general, they perform some common functions that are listed below.
- Trading platform provides information about actual market condition using intuitive graphical interface. Traders can easily learn about the current quotations in real time by observing the graphs that appear on the screen. The type of graph used varies by platform and can often be customized. Therefore, users may see candlesticks or bars on the graph depending on the platform they use or the graph preferences that they have set. Each candlestick or bar on the graph represents a timeframe that can also be customized. If users set a 30-minute timeframe, each candlestick or bar represents a timeframe of 30 minutes.
- Trading platform acts as a convenient tool for traders to conduct their trading activities. With this tool, they can place or pend orders; open, close and manage market positions; and monitor their trading account conditions at any time except holidays and weekends.
- Besides providing basic trading instruments, trading platform also offers analytical instruments in the form of indicators. There are various types of forex indicator that the platform may provide, such as Alligator Strategy and ATR Strategy indicators.
- Trading platform offers automatization feature using its state-of-the-art algorithm. Traders can automatize various trading tasks without requiring their direct participation.
- Trading platform offers various instruments, such as alerts, account history and real-time news, which are meant to make trading process easier to handle.
There are various trading platforms that are available today, the most popular of which is MetaTrader 4, also known as MT4. Although its developer, MetaQuotes Software Corporation, has released the successor of this trading platform, called MetaTrader 5, most brokers and traders still use MT4. More comprehensive information about this trading platform is available at the developer’s website.