Beginner traders have a lot of important decisions to make. Firstly, they need to find a reliable broker that best suits their needs, educate themselves, and pick a trading platform for trading. The trading platform plays a vital role in learning how to use technical indicators and conducting a technical analysis. In addition, platforms help traders build and develop their trading strategies.
Choosing the right trading platform is crucial for beginners in the financial markets. There are a couple of things to take into consideration when searching for a trading platform:
- User-friendly interface: as a beginner, it’s a top priority to find a platform that is easy to navigate. This will help you save a lot of time and energy.
- Access to various asset classes: there are various investment vehicles to choose from. And there are multi-asset and single asset class trading platforms. For instance, some platforms such as MetaTrader 4 (MT4) and cTrader offer access to mostly currency pairs, while MetaTrader 5 (MT5) is considered to be a multi asset platform that enables brokers to offer FX, bonds, futures, options, etc. You can view detailed comparisons of the following platforms online – MT4 vs MT5 vs cTrader.
- Cost and fees: most Forex and CFD (Contract for Difference) platforms are free to use, in addition, demo accounts are also mostly free for these platforms. However, some stock trading platforms require monthly commissions.
- Trade automation capabilities: some trading platforms enable traders to automate their trading using algorithms. Trading algorithms can be built or bought in an open market. Trading robots help traders not only to automate their trading, but they also help back test trading strategies. In addition, algorithms can be used to create unique trading indicators.
- Copy trading capabilities: most trading platforms enable traders to copy the performance of successful traders. If you are planning to use this option to copy or become a signal provider, make sure that your broker has a large community and supports social trading. Selling trading signals or copy trading services can become an additional source of income for you.
- Availability of desktop software, mobile app, and web terminal: most modern brokers offer trading platforms that are suitable for various devices. However, it should be mentioned that your primary trading software should be a desktop one. Some brokers only offer custom-made online trading platforms, and it’s best to avoid them if you are planning to day-trade. Day traders require reliable platforms with fast execution speeds, and online terminals cannot match with desktop software in performance.
- Execution and reliability: execution speeds and reliability is highly important for intraday traders such as: high frequency traders, scalpers, news traders, and algorithmic traders. On the other hand, fundamental traders that trade less frequently, care less about execution and speed. It should be mentioned that, often, fundamental traders use various platforms simultaneously: one for market analysis, and one for trade execution.
Here are some of the most popular platforms to consider if you are planning to trade currencies and CFDs:
- MetaTrader 4 (MT4): the platform’s main advantage is that it’s highly reliable and offers the widest selection of custom-made algorithms. As already mentioned above, the platform is mainly used for trading Forex pairs. MT4 was released in 2005 and instantly became popular, which explains the large number of trading robots available for this software. Traders buy and sell trading algorithms called Expert Advisors (EAs) in the Meta Market.
- MetaTrader 5 (MT5): this software is widely recognized as a multi-asset platform. MT5 is a successor of MT4, however, both are actively used today. MT5 was released in 2010. The platform offers enhanced capabilities, more pre-installed indicators, more time frames, a built-in economic calendar and a depth-of-market (DOM) feature for improved market analysis.
- cTrader: cTrader is another popular trading platform, however, not as widely used as the MetaTrader software. cTrader offers a very user-friendly interface. This platform is ideal for beginners and professionals alike. On the downside, there are no stocks, bonds, and futures offered on this platform.
- TradingView: this platform was primarily created for market analysis, and later added a trading feature in its offerings. It provides a wide range of charting tools, modern design, variety of technical indicators, and drawing tools. TradingView supports copy and social trading.
For trading and investing in Stocks, bonds, and futures, you will need specific trading platforms. The most popular ones are:
- Robinhood: this platform revolutionized trading when it started offering commission free trading. The platform offers a user-friendly interface and simplicity that makes it ideal for beginners. Robinhood allows traders to access stocks, exchange-traded funds (ETFs), cryptos and options. Traders that cannot afford to make large deposits, the platform offers fractional share trading.
- TD Ameritrade (thinkorswim): TD Ameritrade is a widely known brokerage platform that offers a wide range of trading tools and resources through its thinkorswim software.
- Active Trader (from Fidelity Investments): this software offers advanced trading tools, rapid trade execution, advanced order types, integrated economic calendar and real time data. This platform is specifically designed for active trading.
It should be noted that the following popular platforms are for investing and trading cryptocurrencies, and not for trading them as CFDs. Many Forex and multi-asset brokers offer crypto derivatives for trading through MT4, MT5, cTrader, and TradingView. When traders try to invest in crypto, they purchase real tokens using the following popular platforms:
- Binance: Binance is a widely used crypto exchange platform globally. It offers a user-friendly interface, and numerous cryptocurrencies for trading. The platform provides many trading features, such as: spot, futures, and options trading, and staking.
- Coinbase: Coinbase enables traders to buy, sell, and store cryptocurrencies. The platform was designed for more advanced traders.
- Kraken: Kraken is a widely known trading platform that offers an extensive selection of tradable instruments. The platform also offers margin trading features and access to futures.
Finding the most suitable platform to your needs is critical for success in trading: depending on what you plan to trade, you can pick dedicated or multi asset platforms. Some of the most popular Forex and CFD platforms to consider are: MT4, MT5, cTrader, and TradingView. The most famous platforms for trading stocks are: Robinhood, thinkorswim, and Active Trader. For trading and investing in crypto, most traders pick exchanges such as: Binance, Coinbase, and Kraken.