A:

A trading platform is a piece of software that acts as a conduit for information between a trader and a broker. A trading platform provides information such as quotes and charts, and includes an interface for entering orders to be executed by the broker. Trading platform software can be locally based, meaning it is installed on the trader's computer and can be used with Windows, Mac and Linux systems - different brokers offer different options in this respect. Alternatively, some brokers offer software that is web based. These platforms often run using Java, a dynamic web language. The advantage of web-based trading platforms is that they can be used by almost any computer with internet access. Trading platforms are often available free-of-charge, but some brokers allow traders to purchase platforms that have a higher functionality for a fee. Other brokers provide platforms with different levels of functionality for traders who are more active.

Online Forex Trading
Online forex trading requires the same things from a trading platform that are required for trading any other type of security. The platform must act as a go-between for the retail forex broker and the forex trader. Platforms must also provide real-time and historical data to the trader and provide the him or her with access to all of the types of orders that need to be available to trade forex efficiently. (For more on this, read Place Forex Orders Properly.)

Third-party forex trading software is also often used, as many retail forex brokers' platforms have an application program interface (API), which allows traders to integrate third-party or even proprietary software into the platform.

Some factors to consider when looking for forex software are:

  • Is it free? If there is a nominal charge, what additional features are made available?
  • What technical indicators are available in the charting component?
  • Is the software Windows, Mac or internet (Java or HTML) based?
  • Can you trade from the charts?
  • What is the order interface? What types of orders are available?
  • Is historical data made available through the software?
  • Does the platform allow for backtesting of strategies?
  • Is the graphical user interface (GUI) pleasing to look at?
  • Is the GUI conducive to monitoring a lot of information at once?
  • Does the platform have an API that allows additional software or programming?


Most forex brokers allow customers to open a demo account prior to funding a full account or mini account. Be sure to try out each broker's software during their trial periods to help determine which forex trading software is best.

For more on this topic, see our Forex Market Tutorial.

RELATED FAQS
  1. What methods can be used to fund a forex account?

    The forex market is where currencies from around the world are traded. In the past, currency trading was limited to certain ... Read Answer >>
  2. Is it possible to trade forex options?

    Yes. Options are available for trading in almost every type of investment that trades in a market. Most investors are familiar ... Read Answer >>
  3. How does portfolio management software work?

    Discover the functions of various complexity levels of portfolio management software, and learn how traders utilize portfolio ... Read Answer >>
  4. Do I always need to use a stock broker?

    Do I need a stock broker to buy stocks for myself, even if I get a stock brokers license? Or is there a rule that makes it ... Read Answer >>
  5. How does margin trading in the forex market work?

    When an investor uses a margin account, he or she is essentially borrowing to increase the possible return on investment. ... Read Answer >>
  6. How do I use an arbitrage strategy in forex trading?

    Forex arbitrage is a risk-free trading strategy that allows retail forex traders to make a profit with no open currency exposure. ... Read Answer >>
Related Articles
  1. Trading

    Forex Broker Guide

    A Guide To Choosing a Forex Broker
  2. Trading

    Forex Broker Guide: Introduction

    As of January 2012, foreign exchange market accounts for more than $4 trillion in average traded daily value, making it the largest financial market in the world. No central marketplace exists ...
  3. Trading

    Forex Traders

    A foreign exchange or Forex trader, also referred to as a retail Forex trader, is a person that seeks to obtain profit through buying and selling various currencies on the foreign exchange market. ...
  4. Investing

    Broker Guide To Forex.com: Trading Platforms And Customer Support

    Forex.com offers a number of different trading platforms, including its own FOREXTrader PRO, MetaTrader 4 and GTX - Forex ECN for professional forex traders, high net worth individuals and institutional ...
  5. Trading

    How To Place Trades With Interactive Brokers' WebTrader: Conclusion

    Interactive Brokers' WebTrader is a simplified trading platform with an easy-to-use, basic order entry interface. As with any trading platform, it is important to learn about the platform and ...
  6. Trading

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
  7. Trading

    Forex Broker Guide: Platforms And Account Details

    Trading PlatformThe trading platform is the trader's portal to the markets. With this in mind, traders should ensure that the platform and any software is easy to use, visually pleasing, and ...
  8. Trading

    Top US-Regulated Forex Brokers

    Who are the top regulated forex brokers in the USA to trade currencies? Here is a quick list.
  9. Trading

    Forex: Demo Before You Dive In

    All trading platforms have benefits and drawbacks - master the fake trade before making a real one.
  10. Managing Wealth

    Top 10 Brokerage Firms For Day Trading

    Day traders have different needs from long-term investors. Investopedia rates the top 10 brokerage firms for day traders.
RELATED TERMS
  1. Currency Trading Platform

    A type of trading software used to help currency traders with ...
  2. Trading Platform

    Software through which investors and traders can open, close ...
  3. Forex Broker

    Firms that provide currency traders with access to a trading ...
  4. Forex Spot Rate

    The current exchange rate at which a currency pair can be bought ...
  5. Demo Account

    A trading account that allows an investor to review and test ...
  6. Give Up

    A procedure in securities or commodities trading where the executing ...
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center