Before the development of the internet and the web, Forex trading was limited to those who worked at the various Forex exchanges, the rich who were able to afford Forex brokers and traders and to the large institutions who had Forex trading departments. With the technology explosion, Forex as a trading instrument has now become available to the ordinary man in the street via online Forex trading platforms and programs.
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Online Forex trading is merely the business of trading currencies online via a Forex broker or via a Forex program. And there are a number of different options where it comes to trading Forex online.
There are two ways you can approach Forex. You can choose which platform you like trading on and which platform works best for you and then choose a broker who offers that kind of platform, or you can choose a broker and then take a look at the platforms that particular broker offers. There is no real right or wrong way to approach this and as a new trader, it may be a good idea to take a look at some of the platforms on offer by downloading demo programs before you decide on the broker to use.
Browser Based Online Forex Trading
Browser based trading platforms allow for online Forex trading via your current web browser – like Internet Explorer and Mozilla. There are a number of brokers which offer online trading platforms. These platforms differ from broker to broker and it’s a good idea to take a look at the platform the broker uses before you invest in an account at that particular broker – to ensure the website offers the indicators you use and also to ensure that you are able to use the website effectively. The downside to using a browser based program as a platform is that you are dependant on your version of browser and when your browser updates, you may end up with a program which stops working for a while. The advantage is that you do not need to download special programs to allow you to trade Forex and you don’t need to install specialised software.
Specially Designed Applications For Online Forex Trading
There are a number of brokers who have specially designed applications which allow you to trade the Forex. These programs normally need to be downloaded from the broker and are normally free when you invest at the broker. These programs vary from broker to broker. If you decide to choose a broker who offers specially designed software, then it’s a good idea to download a demo version of the program first to ensure that you are able to understand the program and the way it works, and also to ensure that the program offers the indicators and analysis that you need for your trading.
Generic Trading Platforms Used For Online Trading
There are also a number of generic trading platforms which are offered by and supported by certain brokers which are developed and maintained by independent software companies. These types of platforms include the MetaTrader platform , TradeStation platform and NinjaTrader. Depending on the broker and the platform these online trading programs may be offered free with the trading account you open, or you may have to pay for the use of the platform.
The Advantages and Disadvantages Of The Different Types Of Trading Platforms
Browser based platforms offer the advantage of not having to install new software on your pc or laptop. They are easy to access and they also allow freedom of movement, because you can in theory trade using any computer running an internet connection. Whether it is advisable to use public spaces like internet cafes to trade Forex is a different matter altogether.
Browser based platforms however differ from broker to broker and whether the trading application itself is easy to use and understand differs from broker to broker as well. They also tend not to have as many indicators and analytical tools that the stand alone trading platforms offer and also tend to be limited in the amount of personalisation you can achieve in the platform itself. They are also dependant on browser upgrades and you may need to ensure that you browser upgrades comply with the brokers trading platform needs.
Platforms specifically written and offered by brokers are generally available for free from the relevant broker. These programs have to be downloaded to your computer or PC and installed on the system so a certain amount of technical know-how is required. They generally offer more tools than web based programs, however this depends on the broker and program. The drawbacks to programs offered by a particular broker is that you have to learn how that particular program operates and if you change brokers, you would have to learn to trade on a new program. You are also dependant on the broker for upgrades to the software and generally these programs do not allow individualisation of the application.
Generic platforms are written by independent software companies and then offered by different brokers. Once again, these stand alone programs have to be downloaded and installed on your computer. They generally offer far better technical trading tools and a wider variety of trading tools. They are often supported by the independent developer and often allow for personalisation through specific applications which can be written for them. They also allow you to change brokers without having to learn a new program. The downside to these however is that these trading platforms can be more technical in nature and harder to trade with than browser based or specifically designed software.
The bottom line is that there are almost as many trading platforms out there as there are brokers, but the good news is that most brokers offer demo accounts so the best way to find out which platform is best for you, is to download a few different platforms and see for yourself, which one suits you best.