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In essence, an online trading platform is an interface that allows you to monitor price movements in financial markets and manage your positions. Instead of having to rely on a traditional broker, online trading platforms allow you to do CFD trading and other trading operations from the comfort of your home.
But what makes for a good platform and what features should you look out for when separating the separating the wheat from the chaff? We’ll tell you all about it (and more) below.
The essential functionality of trading platforms
Any reputable trading platform should give you access to spread betting, options trading, investing in stocks, CFD trading, and other financial instruments. In general, there are two types of online trading platforms:
– Prop platforms
– Commercial platforms
While the former are geared towards those with specific trading styles, preferences, and requirements, the latter are perfect for those looking to make spread bets and CFDs and are typically easier to use. They may also feature other helpful functionality such as built-in charts, news-feeds, educational materials, and so forth.
This is what you should expect from a typical online trading platform and it’s one of the first choices you’re going to have to make. As a general rule of thumb, those who are new to spreads and derivative trading (most beginners) are better off sticking to commercial platforms.
Picking the right online trading platform for your needs
When deciding on the best platform to begin your online trading journey, the fees involved are a major consideration. Another big one is the features supported. Are you looking to do CFD trading or would you rather stick to traditional trading methods? Do you often rely on charts to help you make a decision? These are all things to take into equation.
If you’re looking to optimize your spending, then you should give preference to the kind of platforms that charge low or zero fees. This is particularly important to traders who heavily utilize scalping as part of their trading strategy.
In general, low fees are hard to make an argument against. However, don’t make the mistake of using fees as the only metric when selecting the right online trading platform for your needs. Sometimes, platforms with lower fees may not be as competitive in terms of features or educational materials offered.
The reputation of the online trading platform you’re going to be using is another major deciding factor. After all, the last thing you want is to put your hard-earned money and trust into some fly-by-night operation that may be here today and gone tomorrow.
During your research, the recommended path to take is checking what people are saying about it on popular online review platforms (a quick Google search should reveal more than plenty of these). In general, you should give preference to the ones with a proven track record of good reviews and overall customer satisfaction.
Finally, not all online trading platforms are created equal when it comes to initial deposit requirements. In certain cases, you will be asked to have at least X in your account to be eligible for certain trades like margin trading.
Therefore, you shouldn’t forget to double-check this when doing your due diligence, otherwise you risk being locked out of certain features that may be of high importance to you personally.
Picking the best online trading platform for your needs is no easy task and you shouldn’t jump on the first one you encounter. By checking their reviews, eligibility requirements, features offered, and the fees they charge, you should be equipped with the knowledge needed to make the right decision.