The foreign exchange market is undoubtedly the biggest trading market in the world. But trading it is also quite complex. Trading forex requires a person to have a thorough understanding of the currencies, the political and social events influencing the market, the economic news and updates, as well as technical aspects of trading like risks, liquidity, leverage, etc. In order to trade in the forex market, the first step is to open a live trading account. However, practically speaking, it is of greater importance to choose the right type of trading platform, and not just open an account randomly and invest in it for trading. In this article, we will see different types of forex trading platforms.
Dealing Desk Platforms and Non Dealing Desk Platforms
The First Type Can Be Categorised as Dealing Desk Platforms and Non Dealing Desk Platforms.
Market operators transact and trade financial instruments including currencies, commodities, and other financial assets at dealing desks. The brokers serve as both the principal and the agent in transactions on behalf of their clients, who are the traders. In simple words, in forex, dealing desk platforms are those where the platform is accessible to the trader and is connected to the broker’s ‘dealing desk’ – which maintains all the information regarding currencies and the market.
On the other hand, non dealing desk platforms facilitate direct trading. A non dealing desk platform enables immediate foreign exchange trading on the interbank market. The broker’s system collaborates with several liquidity providers that help the broker run. This enables the trader to instantly obtain the best bid and ask price. A non dealing desk platform is also commonly known as ECN platform.
Downloadable and Non-Downloadable Trading Platforms
There is also another category of trading platforms that are not so prioritised but are still important to some traders. They are the downloadable and non-downloadable trading platforms available for traders.
The name itself pretty much describes their unique characteristics and their differences. Trading softwares or applications that can be downloaded on a specific device like smartphones, or computers, or tablets are simply- downloadable trading platforms.
On the other hand, non-downloadable platforms are simply trading websites. They are web-based trading platforms and can be opened only through internet browsers and having a strong, consistent internet connection with the specific device being used. Choosing either downloadable or non-downloadable trading platforms depends on the trader’s personal preference of accessibility to trade where and when.
Based On Programming Algorithm
Other types of trading platforms depend on the programming language used to build up the trading platform. Many forex trading platforms are created utilising sophisticated programming languages in order to let users or customers create and implement their trading strategies efficiently. Depending on one’s degree of trading knowledge, the variations in algorithms allow each trading platform to have distinctive features and functionalities that are special to the clients. MetaTrader, ActTrader, Currenex and cTrader are some common examples of the different types of trading platforms that have been created using different trading algorithms and possess distinctive features.
Although it may be a very lucrative industry, forex trading is also very risky. If someone decides to start trading forex, he or she must first invest the time to educate themselves on the market and all related matters. To begin trading on the forex market, it is crucial to select the appropriate trading platform and account type.