There are a surprising number of Forex brokers. And not all forex trading platforms are the same. In fact, there is significant variability between them in what they offer. Here are a few tips on how to pick the right Forex trading platform.
Legitimacy and Legality
You need to do your research regarding the reputation of the forex trading platform. Do they constantly ask people to give a supposed expert control of the account, even though they could drain your account through bad trades to generate profit for the platform? Or, you may think you’re signing up for a forex trading platform only to find out it is really a knowledge base of articles behind a paywall.
A separate issue is to make sure that you’re legally allowed to use the forex trading platform. For example, you may not be allowed to use a forex site based in the United States, at least without massive amounts of paperwork.
You want to work with a forex trading platform that doesn’t charge you a lot of fees. Some sites use a mix of fees such as monthly membership fees, per trade fees and other fees for services and support. Also, be wary of sites that charge fees on every step of a deal, whether you’re copying others’ trades or setting up complex transactions. While some fees are necessary to fund the site, high fees on transactions or many little fees adding up will destroy your profit margin.
One potential issue is freemium sites, sites that are free for basic users but offer more features to those who pay for the premium version. When you know what you want from a forex trading site, make sure you’re comparing apples to apples in terms of functionality and cost of trading at the volume you want. That slightly more expensive monthly fee or premium software may be worth it after a number of trades.
Ease of Use
Forex trading platforms need to be easy to use. A site that makes it difficult to enter transactions leaves you open to making mistakes. Offering a practice platform where you can test entering transactions and see how things work is one way to “test drive” the site. The ability to back-test strategies is a plus but not essential.
If you can’t make your system work on the site, don’t use the platform. Be very careful of trading platforms that require you to download software, much less coordinate data entry on the software with the website. Conversely, the odds are that you’ll run into problems or have questions once in a while, so do look for trading platforms that have real-time support when you need help.
Proprietary software to use their platform is not necessarily a minus if it is easy to use. However, if it is difficult to install or update or communication problems with its server is frequent, you shouldn’t use it.
Choosing the right forex platform should be the first step for anybody interested in the market. So, make sure that you do your due diligence and find a reputable platform that works for you.