The initial thing that is required to be done when someone is considering trading forex is to open an account with a forex brokerage. This is a reasonably straightforward process normally completed online. Due to the enormous size of the fx market and its rapid expansion over recent years there is a lot of competition for new client business between the online brokers. This competition is normally fought over a couple of key areas, the cost to trade being one, the level of service that the client receives is two and the third is the quality and effectiveness of the forex platform that they provide to their clients.
A trading platform is the software specifically used by a trader, it is just like an interface that delivers information and allows the trader to execute trades. Currency trading platforms should first and foremost offer a security for your deposited funds, whether thats $100 or $10,000. A must have feature of any forex trading platform is the facility to obtain live pricing data. Another major attribute of any trading platform is that it needs to have a good simple layout where the data is easy to read and comprehend. The ability to make a trade should also be straight forward so there is no chance of making an error and putting in a sell order when it should have been a buy order or vice versa and then being able to exit the trade easily as well with a clear pip or profit reading on each individual trade.
Also when researching different platforms traders shoud make sure that the software includes the facility to set up and edit stop losses speedily and easily as this feature may well save a couple trades from closing out as losses. A good additional feature to a trading platform is the charting software. Charts are indispensable in providing the information on which traders base their calculations. The better the charting package on the platform the more precise the calculations that can be made. Some additional features that are worth mentioning are platforms that can be accessed from mobile devices such as PDA’s allowing greater flexibility.
The trading platform software will be one of 2 types. The first is a white label application developed by a specialist company and used by lots of different online brokers. Of the various examples the most widespread and well known of these is MetaTrader 4. The second category of platform software is in fact developed, owned and maintained by the forex trading company. Many of the makers of additional forex trading programs such as forex robots and chart indicator packages will have designed their products to work straight out of the box on generic platforms whereas there could be integration issues with in-house software. Having said that with the popularity of recent forex robots these sorts of integration issues are being resolved all of the time.
Something to be aware of are the new account incentives being advertised by brokerages. With these offers you can typically get a match to your initial deposit capped at anything between $25 up to and over $10,000. Caution is needed and read the fine print carefully as normally these bonuses are linked to the number and size of your trades.
Also an additional aspect you should be aware of if you are a U.S citizen is that various brokers will not permit U.S citizens to trade with them, this is due to the SEC being overprotective about it’s citizen’s and unfortunately this is not just limited to forex.
When searching for online brokers who use a good platform it is also worth checking that clients accounts at the broker are kept in segregated accounts offering better security for your money. This combined with finding a platform that the trader can use easily should be enough to open up a live account and start trading.