What is a trading platform?

A trading platform is software that is used to open, close and manage market positions through financial brokers. Brokers often offer free or discounted trading platforms in order to keep a financed account and/or make a set number of transactions in one month.

Basis of a trading platform

It’s a software that allows investors and traders to trade and monitor accounts through financial brokers. The platform ofter comes with additional functions like real-time quotations, mapping tools, news feeds and even first class studies. They may also be adapted to a specific market like stocks, currencies, options or futures.

There are two different types of platforms: prop platforms and commercial platforms. Commercial platforms are for day traders and retail investors. They are easy to use and contain different useful functions like news feeds and graphs. Prop platforms are adapted platforms developed by big brokers in order to match their specific requirements and trading style.

When choosing between trading platforms, both traders and investors should consider the costs and functions. Day traders and other short-time traders may need things like level 2 quotation whereas an option trader may need tools that are designed to visualize selection strategies.

You should also consider the different costs. For example traders that use scalping strategies, tend to choose platforms with lower costs. Lower costs may not be beneficial though, if they mean less functions and information.

Some platforms may be agonistic to a specific broker middleman. For example, day trading platforms may require traders to have at least 25 000 dollars of equity in their account and they must be accepted for marginal commerce.  Option platforms may require a confirmation to trade different options before you can use the platform.

Popular trading platforms

There are hundreds, if not thousands of different trading platforms, including these popular choices:

  • Interactive brokers – this is the most popular platform with low costs and an access to international markets made for professionals
  • TradeStation – a popular platform for algorithmic traders who prefer to use strategies with automated scripts developed by Easy Language.
  • TDAmeritrade – popular amongst traders and investors, especially after buying ThinkorSwim and developing of Trade Architect platforms.
  • Robinhood – is a commission fee free platform made for the millenium generation. It started as a mobile app and now it has a website also. This platform earns money from different sources.

The most popular platform amongst currency (forex) traders is MetaTrader that brings together many different brokers. It’s MQL script language has become a popular tool for those that wish to automate trading with currencies.