Trading Platforms – top Forex and Binary options brokers
Trading platforms are dedicated software interfaces that are connected to a liquidity pool, a stock exchange, or a financial marketplace to offer unprecedented access to investors who wish to trade a wide variety of financial instruments in the global financial markets. During the early days of financial trading, trading platforms were virtually non-existent, as all trades were primarily carried out on the floor of an exchange. All types of financial transactions involved either direct or indirect interaction between professionals from different realms of the markets [also known as Brokers, Market Makers, or Banks] to determine the price of the markets and its movements.
However, the introduction of electronic instruments into the global financial markets has paved the way for revolutionizing the way the system works. During the early 1970’s, NASDAQ became the world’s first electronically traded exchange that offered live quotes through electronic tickers, and the concept quickly caught on to the public consciousness. By the end of the 20th century, online trading platforms were developed using the internet as a base tool for offering live streaming quotes and trading functionality for traders to invest in financial markets from all over the globe.
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How Online Trading Platforms Transformed The Perception Of Financial Trading
The modern context of financial trading as we know it has been with us for more than a couple of centuries. Stock exchanges came into the fray when market participants decided that creating a stable marketplace could not only potentially help in regulating the price of stocks, commodities, and futures contracts but can also serve as an open platform where shares can be transferred seamlessly between two parties at the best rates in the market. This led to the creation of a centralized structure for financial trading, which was soon adopted by leading economies from all over the world.
Nevertheless, trading in the financial markets was strictly reserved for large players who had access to an enormous amount of capital. Retail traders had virtually negligible opportunities to trade in the markets as a majority of financial intermediaries primarily concentrated on catering to a wealthy clientele. Since the markets in the early days were mostly controlled by a group of brokers on an exchange floor, gaining access to a reliable broker was tough for traders with a smaller amount of investment capital.
Electronic trading, on the other hand, proved to be a game changer for all market participants during the two decades spanning from 1970 to 1990. During this time, a majority of brokerage houses and banks took their traders off the floor and replaced them with electronic instruments to ensure that they had access to better rates and to minimize the effects of human error.
However, with the introduction of the desktop computer during the early 1990s and the proliferation of internet into the average household, the concept of online trading started gaining more prominence among small time investors, who could now approach the markets with a far lesser amount of capital. Internet rendered the capability of transferring data over vast distances through a relatively safe and reliable network. Apart from the few limitations of ensuring security and privacy over open networks, the internet still managed to play a vital role in shaping up the concept of modern day trading. It is safe to assume that the internet and online trading has indeed become the backbone of the global financial markets.
What Are The Most Popular Financial Markets For Online Trading?
Forex Trading Platforms
Forex markets are considered to be the most popular financial markets in the online trading arena. Forex markets are worth a staggering $5 Trillion turnover per day, which is a substantial amount of money. However, country-specific stock exchanges such as NASDAQ and FTSE are also popular among traders due to the comparatively larger volumes. However, regarding outright volatility and earning potential, Forex markets offer the most opportunities for both retail as well as institutional traders for both short-term and long-term investments.
Due to the immense popularity of the Forex markets, several companies dedicate a significant chunk of their investments into developing Forex trading platforms to ensure that they can cater to the maximum number of retail traders from all over the world. Retail trading is a huge business, and brokers can make a good amount of money through spreads and commissions without actually investing their money in the markets. Spreads and commissions are based on the investment amount, therefore, the more the number of traders, the better the return on their investment.
Binary Options Trading Platforms
Binary Options trading is a new concept of trading in the financial markets where the trader earns or loses a fixed amount of money per trade. While binary options are not considered as a conventional form of investment, several investors are taking advantage of the unique investment model to make a fixed high-yield return on the volatile financial markets. Binary options trading platforms are offered for both desktop as well as mobile, and are by far one of the most advanced trading platforms currently available in the financial markets.
Forex Spread Betting Trading Platforms
Forex spread betting is similar to binary options, but is illegal in several parts of the world. Forex spread betting is a highly popular investment channel in the UK due to the tax-free status enjoyed by traders indulging in the world of Financial spread betting. Financial spread betting is a highly risky venture, and traders can lose more than their investment capital in the event of a losing trade. Several Forex as well as Binary Options brokers offer Forex Spread Betting as part of their services portfolio; however, these brokers don’t usually accept traders from countries where spread betting is deemed illegal.
Stock Trading Platforms
Some stock trading platforms offer the convenience of trading some of the major financial markets from all over the world. These kinds of trading platforms offer the unique ability to invest in country-specific stocks, commodities, bonds, indices, or currency pairs according to a trader’s investment strategies. Therefore, traders can indeed diversify their trading portfolio by being invested in the global financial markets and hedge their positions against drastic losses, all the while working towards achieving consistent profits.
What Are The Different Types of Trading Platforms Offered In The Market?
Trading platforms are mostly designed and developed by proprietary brokerage firms that aim to provide a safe, secure and convenient trading environment for different types of investors. Trading platforms are built to satisfy several regulatory guidelines as well as incorporate features that are highly targeted for a particular type of financial market. For instance, trading platforms are used to trade a broad range of financial instruments that includes currencies, stocks, indices, commodities, bonds, futures, options, and other ETFs. Therefore, a trading platform is directly connected to a stock exchange, a global liquidity pool, or an intermediary bank to stream live feeds and fill orders initiated by traders through the platform.
Top 3 Trading Offers
Desktop Trading Platforms
In Forex trading, there are several dedicated trading platforms designed for the desktop such as the MetaTrader and the TradingStation, which are some of the most popular and widely adopted trading platforms in the industry. These platforms offer a full list of currency pairs as well as commodities and precious metals to allow traders to enter and exit the markets around the clock for five days a week. Forex trading is a 24 hours financial market and has several unique distinctions when compared to regular stock trading.
Stock or share trading is dependent on a particular stock exchange, and desktop trading terminals are designed to accommodate the various requirements of the respective financial market. These trading platforms have an opening and closing time, which is usually between 9 AM and 5 PM in that market’s local time. However, unlike Forex and commodities trading platforms, stock trading platforms might or might not offer currency pairs and commodities, and depends heavily on the regulatory agency and other economic factors.
Almost all types of desktop trading platforms for both Forex as well as stock trading are equipped with several advanced charting tools and news streaming services that enable a trader to perform extensive technical as well as fundamental analysis of the markets. Modern trading terminals usually provide a stable and reliable platform for traders to perform numerous trading related tasks within the terminal. Some brokers also offer the convenience of using their desktop trading platform in conjunction with their online web-browser based trading platforms, which further elevates the freedom and flexibility to trade in the financial markets on the move.
Mobile Trading Platforms
Mobile trading platforms widely used in Forex, Commodities, and Binary Options trading. Since these markets involve a significant number of retail traders, a large number of online traders choose these markets over conventional stock trading. Therefore, a trader can utilize the conveniences and mobility of a stand-alone mobile trading platform to open trades, modify them, or close orders on their smartphone or tablet. Several stock brokers are also slowly moving towards offering a dedicated mobile trading platform, as modern day investors are looking for better ways of managing their trading portfolio while on the move. Mobile trading terminals are widely designed for both Android as well as iOS platforms owing to the considerable market share of these systems, while only a select few brokers offer customized mobile trading apps for other mobile operating systems such as Windows.
Automated Trading Platforms
Automated trading is the practice of employing robots or using copy-trade strategies that remove the need for manually entering, managing, or closing trades in the financial markets. Automated trading can either be performed by automated bots, or by following other successful traders in the industry through the concept of social trading. The advancements made in the field of programming and market research have enabled numerous traders to design and develop some of the most successful automated trading strategies that help in removing human emotion out of trading.
Several third party service providers, as well as a select few hedge companies and brokerage firms, adopt the concept of automated trading to enjoy better returns on their investments. The potential profitability and the long-term implications of automated trading can vary according to the performance of the bot and its adopted strategies, but several companies offer automated services to retail traders as well, who wish to stay away from making their trading decisions in the highly risky financial markets.
Several trading platforms such as the MetaTrader terminal in Forex trading allows a trader to adopt automated trading strategies using Expert Advisors, also more commonly known as EAs. EAs can be programmed according to a trader’s requirements, and can either be fully automated or work according to the trader’s supervision.
On the other hand, social trading platforms offer traders the unique opportunity of following or copying other successful traders in the market by just signing up for a nominal fee or by paying a percentage share from their profits. Social trading is one of the most exciting and popular trading platforms due to the ability of traders to enjoy profits by adopting successful strategies of established traders, which also negates to need to perform extensive technical or fundamental analysis of the markets. Several industry experts consider social and automated trading to the future of the financial markets in the coming years.
White Label Trading Platforms
Most established brokerage houses and trading firms usually design their trading platforms and develop an interface that is unique to their company’s services and objectives. However, there are several affiliate brokers and third party companies that use the highly popular White Label model. White label trading platforms are merely customized versions of the original trading platform that is provided by a parent company to its subsidiary. Therefore, the affiliate broker, also known as an Introducing Broker in a few minor cases, acts as a separate entity in the marketplace.
White label brokers earn money through commissions and spreads and are typically more expensive than traditional brokers. White label brokers are also unable to offer the features and account benefits that their parent brokers can provide, which further reduces the incentive to trade with them. However, white label trading platforms should possess all the tools and essential functionalities required for comprehensive trading in the financial markets.
How To Choose The Best Trading Platform
Trading platforms are considered to be one of the most important aspects of trading. Irrespective of whether a trader is a professional or an amateur, trading performance greatly depends on the reliability and efficiency of the trading terminal. Experienced traders are well aware of the pitfalls of faulty trading interfaces, and do everything in their power to stay away from defective platforms.
It is close to impossible to choose the best trading platform right out of the bat, as this requires a great knowledge of the different trading platforms available in the market. Several factors contribute towards an excellent trading environment, and the reliability of a broker is one of the key aspects that determine whether they can provide a good trading platform for their clients. A trader’s personality also determines whether a trading platform is suited to their trading style. Some trading platforms are deliberately rigged by fraudulent brokers to trick unsuspecting users.
A trader’s priority should be to test different platforms available in the market to find one that suits their personal trading characteristics. One of the major advantages of financial trading is that almost all brokers in the industry offer a demo account to help their clients to analyse their trading platform before opening a real account. Some of the best trading platforms also offer the convenience of testing the performance of automated trading bots by back testing the robot using past data. Traders can also test out different strategies and evaluate their trading performance by trading the markets using virtual money, which offers significant incentives for traders to take risks without actually investing their hard earned money.
Every trader should consider trading on a demo trading platform before switching over to a real live account. Demo trading platforms will not only offer glimpses into the performance and reliability of the broker, but it will also help traders to acclimatize with the platform to prevent erroneous trades or mistakes. In reality, is shouldn’t come as a surprise that a significant percentage of losing trades are a result of a trader making a wrong entry due to an improper understanding of the trading terminal. Newbie traders are susceptible to the maximum number of mistakes as they are not entirely aware of their trading platform’s capability, which is further compounded by their lack of experience in trading.
Should I Use Multiple Trading Platforms To Trade?
Trading platforms are designed according to a pre-set template and are aimed at satisfying most of the trader’s requirements. However, there are exceptions in this case, and some trading platforms might not be suitable for everyone. Therefore, as a trader, you might consider using multiple trading platforms to diversify your investments and get the maximum number of features. Using multiple trading platforms can be both advantageous as well as disadvantageous. Ultimately, it depends on the psychology of a trader and his ability to manage multiple accounts without incurring massive losses or giving in to the lure of over trading.
Some leading investors in the industry are known to use multiple trading platforms, while other use the conventional form of trading by dialling up brokers to place their trades. Therefore, every trader is very different in his approach to the market, which signifies the importance of understanding one’s trading personality before making a decision on choosing the best trading platform to invest in the financial markets.