Choosing a forex trading platform isn’t easy. There are so many to choose from, and you don’t have time to try them all. This guide aims to guide you through the process of choosing a forex trading platform by highlighting some of the key features to look out for. And to save you even more time, we suggest some trading platforms for you to try.
Although there are third party trading platforms such as MetaTrader (MT4 and MT5) and cTrader, in many cases your choice of trading platform will be tied to your choice of broker.
Our List of the Best Forex Trading Platform for Beginners
Here is our list of the best forex trading platforms for beginners:
What is a Forex Trading Platform for Beginners?
A forex trading platform lets you speculate on the relative strengths of two currencies. For example, you’d buy the GBP/USD currency pair if you think that each pound will be worth more dollars in the future. You’d sell GBP/USD if you think that the exchange rate will move the other way. Currency pairs are grouped into the more-liquid major pairs (like GBP/USD and EUR/USD) and the less-liquid minor and exotic pairs (like TRY/USD) that are harder to find buyers and seller for.
A forex trading platform for beginners is such a platform that is tailored toward the needs of beginner traders. Technically, the trading platform is distinct from the broker that provides the platform. It might be the broker’s mobile application, a web interface, a PC program, or some third-party software such as MetaTrader (MT4 or MT5).
How Does a Forex Trading Platform for Beginners Work?
You place orders to buy or sell currencies via the online trading platform provided by a broker that acts as an intermediary between you and the forex markets. When you place an order to buy, the platform matches you with someone else who wants to sell— which could be another trader, a market maker who is always on hand to buy or sell, or the broker themselves (if they decide to take the other side of your trade).
Some brokers charge a fee, in the form of a commission per trade, for providing the platform and providing the service of matching buyers with sellers. Some brokers make money another way, through the bid-ask spread, which is the difference between the price they are willing to buy and sell currencies. Some brokers make money both ways.
You submit orders via a trade ticket or order ticket that requires you to specify your stake (the amount you want to win or lose) per “pip” of price movement of the currency pair.
Because forex trades are usually leveraged, the amount of “margin” that you must deposit with the broker might only be a fraction of the amount you need to cover the trade, but you’re still responsible for the total risked amount. Put another way, it means your potential gains or losses on the money invested are amplified.
Key Features to Look For in a Forex Trading Platform for Beginners
There are certain features that any trader needs to look out for in a trading platform, such as low commissions and tight spreads that will reduce your trading costs.
As a new trader, you’ll be looking for additional beginner-friendly trading features such as comprehensive educational resources, responsive customer support, and regulation. Choosing a regulated broker is important because it might afford you negative balance protection, which means that — despite the potentially disastrous effect of leverage — you can’t lose more money that you deposited in your trading account in the first place. Be sure that the broker classifies you as a retail trader rather than a professional trader, which it most probably will unless you ask to trade cryptocurrencies.
Pros & Cons of Using a Forex Trading Platform for Beginners
How to Choose the Best Forex Trading Platform for Beginners for Me?
We’ve suggested some trading platforms in this guide, and we’ve suggested some of the features you might look for in a forex broker’s platform. Those are good starting points but you should always do your own research before deciding which trading platform to go with. For example, it might be really important for you to be able to trade on-the-go via a broker’s mobile trading app.
As a beginner, one of the best things you can do is read reviews of the trading platform on independent review websites and (in the case of the mobile apps) in the Apple or Android app stores. Many of the people who have posted reviews of the app will be beginners just like you.
How to Safely Use a Trading Platform to Make Money Trading Online?“ The most important thing when trading is managing your risk. This applies double for leveraged trading, and triple if you’re just starting your trading journey as a beginner. So, what does managing your risk mean? At the individual trade level it means always applying a protective stop order to each open trade, which will automatically close your trade at a small loss before it becomes a big loss. Unless it moves into profit, of course, in which case a stop order can also be used to lock in some of the accrued profit. At the overall account level it means allocating no more than 1% of your funds to each individual trade, and never trading with amounts of money that you can’t genuinely afford to lose. ”- Mircea Vasiu
Choosing the best trading platform isn’t easy even for experienced traders because there just isn’t enough time to try them all. It may be doubly difficult for beginner traders because you don’t know what you’re looking for. That’s why we created this guide to tell you what features to look out for and to suggest a shortlist of trading platforms for you to consider.
Frequently Asked Questions
Not all brokers are regulated, and every trader (not just beginners) should choose a regulated broker. By doing so, you might get compensation from the regulator if the broker goes bust, and you might get negative balance protection from the broker so that you can’t lose more money than you have deposited.
Most forex brokers also allow you to trade other markets such as stocks (equities) and commodities.
Diversification is always a good idea and this is especially true for beginners. So, spread your risk across several currency pairs and across other unrelated markets such as stocks and commodities.
It’s very easy to open an account with a forex broker by filling out a simple online application form. You will most likely have to prove your identity (e.g., by uploading a copy of your passport) before your account becomes fully verified.
If a broker claims to be regulated, for example by the UK’s Financial Conduct Authority (FCA), you can search the register via the regulator’s website.
Don’t lose money! If you lose 50% of your trading funds, you’ll have to make a 100% return to get you back to where you were.