Broker to Trading

These brokers offer a range of currency trading platforms. But what is a currency trading platform and what are they used for ?

What is a currency trading platform ?

A currency trading platform is software consisting of an interface with a chart and other tools. It is used to trade Foreign Exchange (Forex) and typically a range of other markets.

What is Foreign Exchange Trading ?

Foreign exchange (currency) trading is speculating on the movement of currency pairs, that is attempting to take advantage of a movement in value either up or down. If the trader speculates on a move in value upwards, this is called going long. If the trader speculates on a move in value downwards, this is called going short.

What is a Currency Pair ?

A Currency Pair is also called a Forex Pair. A currency pair is one currency valued in another. This creates complexity when trading it, as one currency can strengthen for all sorts of reasons, and the other can do the same or weaken, and vice versa. The interplay of changing strength and weakness over time, traces out complex moves in a chart.

The moves are seen to fall into patters, or can be without patterns and termed as volatility or can be almost flat. Volatility can create jagged moves, but can also help create more structured moves. Thus volatility can be a double edged sword, it can help make and break moves. Volatility itself can be introduced into the market by such events as the release of economic data seen to affect a currency pair (used in news trading).

A currency trading platform will provide a chart which will have different types of representations of these moves. Many traders use candlestick charts, as they can capture a range of information about the way a currency pair is moving. Other representations include line and area charts, and there are more. Different brokers may have different chart price types, but a typical platform will have a core group.

What is the best currency trading platform ?

Arguably, there is not a best platform, as it depends on a number of factors, such as the type of trading used by the trader. But many brokers offer MetaTrader 4 (MT4) and its successor MT5 (to a lesser extent).

The advantage of MT4, is that is it has extensive support from the trading community and allows the trader to discretionary trade (where they make their own decisions) and to use use automated trading strategies (called Expert Advisors) for automated currency trading, for which it is well known.

Both discretionary and automated trading are important parts of Forex or currency trading. However it is not necessary to trade using MT4. If the trader only wishes to trade as a discretionary trader, brokers may provide simplified easy to understand interfaces to help them trade currency pairs.

For more advanced traders, platforms such as cTrader and JForex provide an expanded range of functionality, particularly for automated traders. However all traders can use these platforms and may find their range of technical indicators useful (used to try and make sense of currency pair movements).

What is the best currency trading platform for a beginner ?

Such a trader may find a clear web trading interface to be helpful. Many brokers offer these, as well as app versions, allowing the trader to trade from their phone or tablet.

If the trader only offers MT4 they typically offer a web trader version of this. However it could be argued that MT4 as a downloaded desktop platform is a reasonable way for a trader to begin, by getting to grips with this popular platform. As it has all the tools that any other platform has, it can in principle be used by the beginner. MT5 can have a different interface, which the trader may find more intuitive.

What is the best currency trading platform for an advanced trader ?

If the trader wishes to use automated trading strategies then there is range available. More advanced traders may find the tools available on cTrader or JForex to be helpful.