The technology utilized for trading is referred to as a trading platform, which facilitates actions like opening, closing, and managing market positions with the assistance of an intermediary, typically an online broker.
These brokers often furnish online trading platforms, either at no cost or at a reduced rate, in return for maintaining a sponsored account and/or executing a specific number of monthly trades. The most favourable trading websites offer a blend of robust functionalities and competitive fees.
Consideration while Choosing a Trading Platform
Features
- Traders and investors should assess if the available features of a trading platform align with their specific trading requirements.
- For instance, day traders and short-term traders might necessitate features like Level 2 quotes and access to market depth data, including price levels, order size, and volume. These tools assist them in optimizing order timing.
- Technical analysis enthusiasts may seek live charts that offer a variety of technical indicators to aid in their analysis.
- Options traders may look for specialized tools tailored to researching, analyzing, and testing their trading strategies.
Fees
- When selecting a trading platform, it’s crucial to take fees into account.
- Traders who use scalping as a strategy typically prefer platforms with minimal fees.
- In most cases, lower fees are the preferred choice, but it’s essential to weigh potential trade-offs. For instance, reduced fees might not be beneficial if they result in fewer or less potent features.
Popular Trading Platforms
- Interactive Brokers are favoured by professionals due to their low fees and global market access.
- TradeStation is a preferred platform for algorithmic traders using EasyLanguage for automated strategies.
- TD Ameritrade is a popular choice for both traders and investors, especially since acquiring thinkorswim.
- Robinhood is a commission-free platform aimed at millennials, originally as a mobile app but now available on the web. It generates revenue through various sources, including interest on account cash and order flow sales to large brokerages.
