What is an online trading platform?
Years ago, if you wanted to trade shares, indices, forex, commodities or other financial products, you had to find a broker who would do this for you. In exchange for their services, you would pay a fee. Nowadays, you don’t need a living and breathing broker anymore. Welcome to the world of online trading platforms. Online trading platforms, or trading terminals, online brokerages or online (stock) brokers, as they are also sometimes called - help you easily buy and sell financial products like shares, bonds, ETFs and other investments.
But what exactly is an online trading platform? What different types of trading platforms are there and what are some things to consider while you are looking for the platform that fits your needs? In this blog post, we’ll go through all of that to help you get started as quickly as possible.
An online trading platform in a nutshell
An online trading platform is a software system that investors use to manage market positions. With trading platforms, you can easily trade securities - like shares in a company - at any point during the day. In addition, trading platforms often assist you in your investment endeavours by tracking your progress and offering charts, research, news and other content that may help you make more informed decisions. Most trading platforms offer a web app as well as a mobile app so that you can manage your wallet whenever and from wherever you are.
Types of trading platforms
In general, there are two types of trading platforms: commercial and proprietary platforms. Commercial platforms are platforms that can be used by non-professional, so-called ‘retail investors’ and day traders. These platforms are often easy to use and show market information in a clear, relatively simple way. Proprietary platforms, on the other hand, are platforms that are used by large broker firms and other financial institutions. These platforms are often custom-made, and specifically tailored to the needs of these institutions. They are not accessible to people outside of these organisations.
Things to keep in mind when choosing a platform
There are many different online trading platforms to choose from and each of them comes with its own benefits and set of features. Therefore, if you want to trade online and are looking for the best online trading platform, make sure to define what’s most important to you.
Here are some things you may want to take into account while researching:
1. Speed and usability
Trading environments are very dynamic and can be super volatile. Price changes can happen in less than seconds, so you want to make sure you are using a platform that is fast and can respond to market changes quickly. If the platform needs time to load pages and has frequent outages, you may want to look for a better solution.
2. Reliability
A reliable online trading platform will do everything they can to protect you against scammers and fraud. How can you find out if a trading platform does so? Do some research on their reputation: what do other websites and perhaps bloggers and vloggers say about them? Also, research how they protect your finances and personal information - you should be able to find this on their website. Reliable trading platforms may also have industry-certified licenses, they may use software that’s secured in a special way or belong to specific industry boards.
3. Fees and commissions
Different trading platforms charge their users in different ways. Some of them are free, but then restrict the number of trades you can make per day. You can sign up for a pro (paid) version if you want to do more trades. This can still be a great way to see what the platform looks like, however. In other cases, you may need to pay a one-off sign-up fee. Most online trading platforms also charge a fee per trade, transaction, currency conversion or other activity. These fees might seem small, but they can add up quickly if you are very active on the platform, so make sure to compare these fees as well.
4. Investments options available
Last but not least: you will want to compare which investment options the platform offers. For example, some platforms are focused on specific markets, such as stocks, currencies, options or futures. If you want to focus on one of these while trading, a specialized platform like that can be a great option for you. Of course, if you want to be able to trade different types of securities, make sure to choose a platform that provides access to all of these.
The most popular platforms
As said, whether or not a platform is the best option for you depends on your needs and wishes. In general, however, platforms that execute fast, offer the latest features, are low in costs and are safe in general are the platforms that receive the most attention from retail investors. Fidelity, TD Ameritrade, Interactive Brokers, E*TRADE and Merrill Edge are examples of platforms that often receive high customer ratings, charge relatively low fees, and do not require a minimum deposit.
Here at Equity Flow, we offer two different platforms: Webtrader and MetaTrader 4. Both of these platforms have convenient user interfaces and are fast and reliable, with high payouts, fast withdrawals and a minimum deposit of only $50 so that anyone - even beginner traders - can get started as quickly as possible. On top of that, our enthusiastic customer service team is always here to help you in case you have any questions. Our team has a track record of successfully handling more than $200 billion in trading volume in the past more than 10 years, so feel free to reach out to us with any questions or concerns you may have. And our Trustpilot score of 4.2 out of 5 backs it all up.
How to get started
In most cases, starting with online trading is relatively simple: once you have decided which platform you want to use, you can register and open an online trading account. At Equity Flow, you can choose between Webtrader and MetaTrader 4. Before you log in, it might be useful to think of your investment strategy. Think about how much money you want to spend. What is your (daily) budget? Also, consider how much risk you want to take. Do you prefer to be risk-averse, or do you feel comfortable taking a little more risk? This also affects the types of investments you may want to do.
Feeling ready? Then log in, fund your wallet by using any of the available payment methods, do your research and start trading. Remember: you may need some time to get to know the market to start seeing results, so take your time. Good luck and enjoy!