Trading Platforms: What Are They, And Which One Should I Use?
Online trading platforms provide the software that connects you to financial markets. They are used alongside brokerage services to place buy or sell orders.
Online trading is only possible if you have the right tools and software through a trading platform. Trading platforms are the machinery that allows traders – you – to interface with financial markets. This guide will explain what online trading platforms are, why you need them, and how to use one.
It will also tell you more about popular platforms, such as MetaTrader 4 and MetaTrader 5. So, if you’re eager to start trading online, scroll down for the lowdown on online trading platforms.
This article at a glance:
- Trading platforms connect users to financial markets through software that helps them place their trades.
- Trading platforms alone are not sufficient to start trading. You will need a brokerage service that will execute your trades.
- There are two types of trading platforms: prop platforms and commercial platforms.
- You will be able to use trading platforms for trades by opening an account with a brokerage service. Be sure to check that your broker offers the trading platform you want.
What is a trading platform?
An online trading platform is a piece of software that connects you to financial markets. Trading platforms are used alongside an intermediary (a broker) to buy, sell and manage financial instruments.
In simple terms, you connect to a trading platform via an online brokerage. You can place your trades and monitor your positions through this platform.
Trading platform vs. brokers: What’s the difference?
Online trading platforms allow you to buy and sell financial instruments. You also need a trading platform to manage your positions and get market data. However, having access to a trading platform is useless if it is not enabled to execute trades, for which you need a licensed broker.
This is because trading platforms provide the software that makes the trading process a reality. They allow you, the user, to see how markets are moving in real time, make decisions based on that information, and place orders.
But it’s brokers, such as us, that make the actual buying and selling possible. We act as a gateway to financial markets, facilitate the buying/selling process, and provide liquidity support for your leveraged trades.
What types of trading platforms can I use online?
There are two main types of trading platforms:
Prop platforms are designed for large institutions, such as investment banks. The defining feature of these proprietary (that’s where the word “prop” comes from) platforms is that they are customized to suit the company or institution using it. Prop platforms are built on advanced software, made for the institution’s own trading purposes, and cannot be accessed by retail traders.
Professional trading institutions can use prop platforms to not only access the markets and execute their trades, but run simulations as well. The aim here is to create an exclusive trading platform through which traders can analyze, buy/sell, and make forecasts via a single program.
Commercial platforms are aimed at retail traders. They allow you to buy/sell, analyze charts, get market updates and learn the fundamentals of trading.
If you’re an individual trader, commercial platforms give you everything you need to make trades, manage your positions, and get market insights. They’re also customizable, but not in the way that prop platforms are.
The latter is completely made to order, depending on the needs of the institution that commissioned the platform. Commercial trading platforms, on the other hand, come with a bundle of features accessible to all users on the platform. Users can toggle between different features depending on their trading strategy, or customize parts of the software based on their needs.
INFINOX account holders receive free access to the MetaTrader platforms. These trading platforms, popular amongst online retail traders, provide a wealth of features and access to a broad range of financial instruments.
MetaTrader 4 (MT4) was developed by MetaQuotes in 2005. It provides access to financial markets for Windows, Android and iOS users. You can download MT4 via INFINOX, and trade forex, indices, metals and oil.
Alongside accessing financial markets via INFINOX and MT4, users can take advantage of the following features:
- Plot as many as nine time frames on a chart so you can mark potential price trends.
- Have up to four pending orders at any one time.
- Hedge positions, i.e., open a second position that is counter to an original position. For example, you’re going long on Tesla shares but think that there’s going to be a short-term price drop. You can hedge the position and go short, while keeping your original position.
- Use 30 technical indicators to analyze financial markets.
- Customize parts of the software to create your own technical indicators and algorithmic trading commands.
MetaTrader 5 (MT5) was released in 2010 as the successor to MT4. However, due to the simplicity of MT4, it remains a popular choice for retail investors, especially those that are new to trading.
For those who want a more sophisticated experience, MT5 is available to download for free at INFINOX. It offers access to more financial instruments, as well as additional features that experienced traders may find useful:
- You can trade forex, indices, metals, oil, and equities through MT5.
- Plot up to 21 time frames on a chart so you can spot potential price trends.
- Have up to six pending orders at once.
- Hedge positions, i.e., open a second position that is counter to an original position. For example, if you’re long on Tesla shares but think there’s going to be a short-term price drop, you can hedge the position and go short, while keeping your original buy position.
- Net positions, i.e., offset a position by opening a second position within the same security, or a different one. Doing this allows you to reduce your exposure by using the net outcome of your two trades, by combining them into one net trade.
- Use 38 indicators to analyze the markets.
- Customize MT5 using MQL5 scripts to create your own technical indicators and algorithmic trading commands.
- View economic calendars within MT5.
- Check the market depth of a sector so you can see how much activity is happening, and how this activity is impacting your potential trading positions.
What is the best trading platform for me?
The best platform will depend on the type of trading you want to do. For easy, direct access to financial markets and instruments, MT4 and MT5 are great. You can also try out alternatives such as TradingView or NinjaTrader.
Those with more experience may want to try a trading platform such as CQG QTrader, as this offers advanced analytics, through features such as visualization tools and heat maps.
How to choose a trading platform
Choosing the right trading platform is completely subjective — what works for you may not work for someone else. Here are some considerations to help you get started:
- What are the costs and fees? Is the trading platform free? If not, how much commission will you pay on your trades?
- Do you need access to Level 2 pricing? Traders can get access to the NASDAQ order book to check market depth and momentum, a service referred to as Level 2. Traders can subscribe to receive Level 2 data, which tells them the range of bid-ask prices at a given price level.
- Is there a minimum equity requirement? Some trading platforms require you to have a certain amount of money in your trading account.
- What analytics can you access via the trading platform? Can you get access to features such as charting, news feeds and expert insights? The amount of information you need will depend on how experienced you are at reading financial data.
- Can you learn anything via the platform? Make sure the software you choose gives you access to educational material. If you want to learn from others more directly, you may want to choose a social trading platform, such as IX Social.
How to use a trading platform
Using a trading platform is as simple as opening an account with a broker, downloading the software, finding the market you want to trade in, and opening a position. To get MT4 or MT5 via INFINOX, you can follow these steps:
- Sign up for an INFINOX account and choose your preferred trading platform.
- Complete the registration form.
- Select your desired amount of leverage.
- Click here to download MT4 or MT5.
- Log in to your INFINOX account via your chosen trading platform.
- Make a deposit and start trading.
- Use the Charts option to get market insights.
Trading platforms FAQs
Are trading platforms safe?
Yes, trading platforms used through a licensed broker are safe. Licensed brokers, such as INFINOX, are regulated by various financial bodies, which means your money and data is secure.
How do I download an online trading platform?
You can get a trading platform via an online broker. We give you free access to MT4 and MT5, alongside other trading products.
What is the best trading platform online?
MT4 is one of the most popular trading platforms, while MT5 is considered to be one of the most powerful ones. That said, what platform will work for you depends entirely on the trading techniques you rely on.
What are trading platform fees?
Trading platforms may come with some fees chargeable to the user. Some platforms, however, are free to use. At INFINOX, traders can use MT4 and MT5 for free.
This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. INFINOX is not authorized to provide investment advice. No opinion given in the material constitutes a recommendation by INFINOX or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.