What is a 'Currency Trading Platform'

A currency trading platform is a type of trading platform used to help currency traders with forex trading analysis and trade execution. 

BREAKING DOWN 'Currency Trading Platform'

Currency trading platforms are often used in conjunction with equity trading platforms for avid market day traders. Independent systems can rely on underlying brokerages to execute trades. Brokerages also offer a wide array of currency trading platform solutions for their retail clients. In the institutional markets, companies build proprietary currency trading platforms to meet their individual needs with trades executed through institutional trading channels. (See also: The Forex Market: Who Trades Currency and Why)

In the retail equity trading market some of the most popular trading software resources include MetaStock, Worden TC2000, eSignal, Wave59 PRO2, EquityFeed Workstation and VectorVest. (For more on these platforms see also: The Best Technical Analysis Trading Software) Investors seeking to trade a combination of stocks and currency will find the most comprehensive independent platforms in ProfitSource and INO MarketClub. Meanwhile, NinjaTraders is one trading platform that can best serve investors seeking to focus primarily on foreign exchange trading or to use a single platform for trading foreign exchange markets separately. Different brokerage platforms also offer numerous forex trading platform options with direct trades as well.

Foreign Exchange Trading

Foreign exchange (forex) markets have many advantages that appeal to a lot of day traders. The foreign exchange market is the largest in the world. This market focuses exclusively on the trading of currency. Daily forex volume reported tri-annually from the Bank of International Settlement showed $5.1 trillion per day, traded in 2016. This compares to a 2018 average daily trading volume of 6.6 billion shares or $330.6 billion in the U.S. equity market. Thus, there is a great deal of opportunity for profit in the foreign exchange market. The forex market is also available for trading 24 hours a day, five days a week which adds to its profit bearing potential.

Forex Trading Platform Features and Considerations

Retail forex traders typically look for some popular features when identifying and using a currency trading platform. The availability of currency pairs is one important feature since the trading of foreign exchange currencies is based around the pairing of two global government currencies. Traders look for ease of installation and use which can lead to comparisons of web-based platforms versus downloadable platforms. In this area, traders may have the option to choose a platform from their brokerage directly or go with an independent service. Fees can be an important consideration as well as the costs can range broadly depending on individual systems. Functionality is a key aspect for most traders since they will typically rely on ingrained charts and order-taking methods built-in from the system. Lastly one key aspect of a forex trading platform will be the brokerage trading platform that it is integrated with. Interactive Brokers and TD Ameritrade are popular brokerage options. Other options may also include Fidelity and eTrade. (See also: The Top 10 Brokerage Firms for Day Trading, Online Forex Broker Reviews and What should I look for when choosing a forex trading platform?)

Most forex platforms will allow a trader to open a demo account prior to funding a full account. Trying out several forex software trading platform through a trial period can help a trader to decide on the best one for their trading needs.

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