Investing involves the necessity to make many important decisions which may determine whether the investor will enjoy the profits made or be forced to face the bitterness of failure. It does not matter which market one invests on — the stock exchange, the Forex market or the CFD market. In all these cases, investing directly is not possible. It is always necessary to open an investment account and cooperate with a broker. One of the criteria helpful in selection of the brokerage firm by the investor will be the type of the investment platform (eg.: xStation) it makes available. Therefore — how does one choose the best trading platform from the investor’s point of view?
Does the broker provide access to demo accounts?
The first important step towards investing on the Forex and CFD market is to create an investment account with the selected broker. However, before the money is deposited on such an account and regular investing begins, it would be worthwhile to use the demo account on the investment platform. Many brokers (like XTB) allow their potential clients to test their trading platform and find their bearings. It is a good way of practicing different investment strategies, and for beginner investors — a way of finding out whether trading indeed suits them as a form of investing funds. The demo account should be free and provide access to regular functionalities of the trading platform. On the other hand, after the account trial period, the user should not be obliged to open a regular investment account and make a minimum deposit on it.
What functionalities should the platform have?
A new trader, who is only taking their first steps in terms of investing on the Forex and CFD market, does not really know what they should expect from a trading platform, even one that is made available to them in demo form. Its functionalities are the most important selection criteria — what tools it makes available to investors and how they can be used.
When choosing a brokerage platform on the Forex and CFD market, both experienced players and ordinary traders pay attention to its functionalities. It is important to ensure that it is intuitive to operate and allows for convenient trading of currency pairs, currency derivatives, raw materials or other instruments, including contracts for differences (CFD). The investor should verify whether the trading platform provided to them allows them to quickly and effectively assume the desired buy and sell positions, i.e. long or short positions.
It is important to realise that the transaction platform is the most important tool used by traders on a daily basis when trading in capital on the Forex and CFD markets. Fast execution of orders may result in real profits for investors. Moreover, platforms often allow for placement of so-called pending orders, which may open and close positions, according to the investor’s request, once the conditions specified by the investor are met. An important function of the trading platform is automatic closing of positions with specified profits, i.e. the user should be able to set the “Take Profit” level, which is justified above the resistance line or level or below the so-called support line. This allows the trader to realise profits without being simultaneously exposed to increased risk of the price bouncing off a specific level and them having to abandon the prospect of generating profits. In addition, the platform should make up-to-date currency pair quotations available to its players — charts, indicators and other components of a comprehensive technical analysis.