The global forex market is a vast financial entity, and one that combines volatility, leverage and 24-hour access to comprise a truly unique investment proposition.
However, you’ll need to access the forex market online in the modern age, with virtual trading platforms having replaced corporeal brokers and emerged as one-stop-shops for the research, preparation and execution of orders.
But what are the defining characteristics of a good and reputable trading platform? Here are some points to keep in mind.
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1. A User-Friendly and Customisable Interface
This is perhaps the most important feature, as ease-of-use translates into quicker and more efficient decision making in a fast-paced and volatile marketplace.
This is especially relevant when you utilise trading platforms such as the MetaTrader 4, which boasts a simple and accessible interface through which you can manage a diverse portfolio of assets (including currency).
The MT4 also offers completely customisable charts, enabling you to tailor how information is presented in a way that suits your philosophy and wider trading strategy.
Most importantly, you can get to grips with user-friendly trading platforms quickly and efficiently, optimising your ability to make money through the forex market.
2. Minimal Fees and Charges
One of the main advantages of forex trading is that it’s completely tax free for amateur speculators, enabling such traders to bank as much of their profit as possible.
However, online trading platforms will often charge nominal transaction fees, which can vary significantly from one brokerage site to another.
So, you’ll need to consider this when comparing the market for reputable trading platforms, while ensuring that your chosen broker is operating lawfully and licensed fully by the Financial Conduct Authority (FCA).
The fees and charges applied are particularly important to scalpers, who make their money by executing a huge volume of orders within a 24-hour period.
3. Leverage and Margin Requirements
On a similar note, reputable and solid trading platforms are often defined by their leverage and the precise margin requirements that they place on traders.
Leverage refers to the ratio at which money is borrowed to execute a trade (in relation to your initial deposit amount), while margin describes the capital borrowed by brokers to open positions. Typically, a reputable broker will offer an average leverage of 50:1, although this may rise to 100:1 in some instances.
However, some rogue or questionable operators will offer leverage in excess of 1000:1, creating the risk that your positions could become over-leveraged within a relatively short period of time.
This could see you incur huge financial losses if your trades go awry, so it’s best to prioritise trading platforms that cap leverage in a responsible way.