Broker to Trading

These regulated brokers offer online trading platforms which can be used for a range of trading styles.

What is an online trading platform ?

This is a software with an interface which the trader uses to trade markets via a broker. These terminals display the markets to trade with and allow the trader to trade them. A broker may provide more than a platform, for example they may offer analysis or news or educational videos and so on on their website, but the platform is probably mostly what the trader sees of the broker.

Thus the platform is important as it defines what the trader will experience when using a broker. Different brokers may have different features, for example some may have variable, some fixed spreads, some may offer CFDs and some may in the UK offer spread betting.

What is a good trading platform ?

This depends on what kind of trading the trader wants to do and it can depend on such factors as the level of experience of the trader. For example, a beginner may find a simplified web trader platform with a clear layout helpful while more advanced traders may find a platform with the capacity to build technical indicators or use automated trading features to be useful.

This said a beginner can use a more advanced platform. This is because platforms have a basic similarity which allows discretionary trading, where the trader makes the trading decisions. They have a chart, charting tools, lists of markets and ways to place orders. So the trader can use technical or fundamental analysis or other means to help make a trading decision and avoid using more advanced features until they wish to do so.

How does MT4 fit into all this ?

MT4 is a platform which supports both discretionary trading, where the trader makes the trading decisions and automated trading using what are termed Expert Advisors. Expert Advisors are automated trading strategies, which the trader can use or design themselves.

When making a trade, traders typically follow rules, for example based on indicators, to enter, exit and manage the trade as it unfolds. However human decision making, while it is arguably much better than machine decision making, can allow issues such as emotional responses to cloud decisions or make them prone to error. A machine does not have this problem.

But it also means that the machine follows the rules exactly and the market may not be responsive to trading with these rules. This may result in drawdown, that is losses, even if eventually the system makes a profit (which it may not do). However issues such as emotions and mistakes from tiredness do not exist with a machine.

It is important to note that past performance does not mean that the result will be repeated in the future. Thus a well performing backtested strategy may not perform as expected when actually used.

Are there other platforms which allow automated trading ?

There are a number of platform which allow automated trading. Included above are JForex, cTrader and MT5. These are advanced platforms which are optimised for ECN trading. This is trading where the trader more directly accesses the market via the broker, allowing them to trade at high speed and using a variety of trading styles.

While it can seem that ECN trading is cheaper, as spreads of liquid Forex pairs can be very low (as they are in the Interbank market where major players trade Forex), the broker normally adds a commission charge to this spread. Thus the total cost is the spread plus the commission charge and this may not necessarily be cheaper than a broker which does not charge a commission.

However all these platforms can be used by traders who execute their own trades, and some can offer an expanded range of technical indicators. MT5, cTrader and JForex have trading interfaces which are arguably clear, though the kind of trading they may be used for can be advanced. All these platforms have app versions, allowing the trader to trade on a range of devices and may also have a web trader as well as a desktop download.