What is a trading platform?
A trading platform is an online trading system or software that allows investors and traders to access various markets and carry out trades online through a financial intermediary, such as an online broker. Trading platforms may offer different features and tools to help investors make investment decisions, such as real-time quotes, interactive charts, news feeds, research, and educational resources. A trading platform is typically offered by a brokerage or other financial institution, either for free or at a low cost, in exchange for keeping a funded account and/or making a certain number of monthly trades. The best trading platforms come up with a combination of powerful features and low fees.
Types of Trading Platforms
Trading platforms can be classified into two categories – prop (proprietary) trading platforms and commercial trading platforms. Prop trading platforms are custom-made applications by large brokerage firms that reflect their electronic brokerage models and trading preferences.
Commercial trading platforms, on the other hand, cater to retail investors and day traders. They are user-friendly and have various features, such as charts and news feeds, that help traders conduct research and access more relevant information.
Active trading involves using different trading tools and techniques to identify trends. To choose a suitable trading platform, one needs to have practical experience with active trading.
How to Choose a Trading Platform?
Different traders have unique needs when it comes to choosing a trading platform. They should compare both the features and the fees of various platforms before making a decision. For example, some traders may need advanced tools such as market depth information or options strategy visualizers, while others may prefer simpler platforms with lower fees. A scalper, for instance, would benefit from a platform that charges low commissions but may not need many features or research options.
Another way to compare trading platforms is to read feedback, ratings, and reviews, but one should be careful about possible biases or conflicts of interest among reviewers