Foreign exchange (forex) trading requires a large amount of skill, focus, and knowledge from its traders. The more strategic and calculated your decisions are, the higher the chance of a profitable return and minimized trading risks.
However, despite these being essential components of forex trading, they can potentially be made irrelevant to the likelihood of your success, if you’re using the wrong trading platform. You could have the best approach to trading – such as basic forex trading strategies from Plus500, for example – but without the right platform, your chances of profit are limited.
Forex trading platforms are the key to your forex experience, as they are where your entire trading journey takes place. Everything from managing your trades, down to analyzing behaviors in the market, is carried out on these platforms.
Therefore, if you want to be trading at an optimal level, having everything you could want in your trading arsenal, then it is critical that you choose the right platform. This could very well be the difference between a profitable and damaging trading experience.
Here are the main things you should look for in the best forex trading platform, to ensure you pick the right one for you:
Risk management tools
The first essential thing to look for in a forex trading platform is the inclusion of risk management tools. These are designed to give you more control over your trades, and help minimise the extent of any losses.
The best platforms will have a wider range of risk management tools, so the more the merrier. For instance, you might be offered the use of automatic orders, which allow you to set automatic caps on what price levels your trades should reach before closing.
Let’s say you open a buy position on a currency pair, you can set a precise value as the limit on your automatic sell order, so if the value drops to this point, whether you’re there to see it or not, the trade will close.
Whilst some slippage may occur, this will still drastically mitigate the number of losses you receive from this trade, as opposed to you being away whilst the value continues to drop without manual closing.
Thus, risk management tools are a key component in a good forex trading platform.
Technical indicators
Technical indicators are another great sign for an optimal trading platform. These features allow you to use mathematic calculations, which will accurately pinpoint any trends or patterns in the movements of the forex market.
Being able to predict market movement is essentially the main aim of forex trading. In order to make a profit, you need to know where the value will move, and what trade to make to match it.
There are many technical indicators, one example being the Simple Moving Average (SMA), which will show you the average price movements over a specified period in the market. This can give you a clearer idea of where the price is moving, and where it might go next.
With these indicators, your trading platform will give you all the analysis you need to make more informed trades.
Trading alerts
A good platform will also offer trading alerts, which will notify you of any important occurrences in the market, which will naturally impact your current, or potential, trades.
The forex market is one of the most liquid markets in the finance industry, so change is a constant factor. To make the most profitable trades, you need to be aware of and prepared for these changes when they happen. Missing changes in the market can be detrimental to your trades.
With trading alerts, you won’t need to be constantly monitoring the market, because the trading platform will do that on your behalf. Should anything important happen (for example, a political event impacts the market), you will be immediately alerted of this, and can promptly adjust your trades in light of the new circumstances.
These are pivotal for market awareness and preparation – two keys to success in forex trading.
Expert guidance
The last thing you’ll most definitely need from your chosen trading platform, is the guidance and expertise of trusted professionals.
Anybody can start a forex trading journey, but not everyone has the knowledge and flair necessary to make the most profit and the least losses. Thus, you need to be extra careful of who you’re entrusting your trading experience to, and what they can offer you.
The best forex trading platform will have several tools available to help you master the art of trading, and learn new tricks each day to put into action. This could be, for instance, a trader’s guide, which will update you with all the vital information needed to understand and effectively use your platform.
With the right guidance at your side, your road to a successful trading career will be all the smoother.
Once you factor all of these points into your search for a forex trading platform, you’re guaranteed to find the perfect one for you, and start your forex trading journey off on the right foot.
