Trading Platform

What is a 'Trading Platform'

A trading platform is a software through which investors and traders can open, close and manage market positions through a financial intermediary. Trading platforms are frequently offered by brokers either for free or at a discount rate in exchange for maintaining a funded account and/or making a specified number of trades per month.

BREAKING DOWN 'Trading Platform'

A trading platform is the software that allows investors and traders to place trades and monitor accounts through financial intermediaries. Often times, trading platforms will  come bundled with other features, such as real-time quotes, charting tools, news feeds, and even premium research. Platforms may also be specifically tailored to specific markets, such as stocks, currencies, options, or futures markets.

When deciding between trading platforms, traders and investors should consider both the fees involved and features available. Day traders and other short-term traders may require features like Level II quotes and market maker depth charts to assist in decision-making, while options traders may need tools that are specifically designed to visualize options strategies. Lower fees are always preferable, but there may be a tradeoff to consider.

Some trading platforms may be agnostic to a specific intermediary or broker, while other trading platforms are only available when working with a particular intermediary or broker. As a result, investors should also consider the reputation of the intermediary or broker before committing to a specific trading platform to execute trades and manage their accounts.

Finally, trading platforms may have specific requirements to qualify to use them. For example, day trading platforms may require that traders have at least $25,000 in equity in their accounts and be approved for margin trading, while options platforms may require approval to trade various types of options before being able to use the trading platform.

Popular Trading Platforms

There are hundreds - if not thousands - of different trading platforms, including these popular options:

  • Interactive Brokers - Interactive Brokers is the most popular trading platform for professionals with low fees and access to markets around the world.
  • TradeStation - TradeStation is a popular trading platform for algorithmic traders that prefer to execute trading strategies using automated scripts developed with Easy Language.
  • TDAmeritrade - TDAmeritrade is a popular broker for both traders and investors, especially following its acqusition of ThinkorSwim and the devlopment of the Trade Architect platforms.

The most popular platform for many foreign exchange (forex) market participants is MetaTrader, which is a trading platform that interfaces with many different brokers. Its MQL scripting language has become a popular tool for those looking to automate trading in currencies.