Choosing the Right Forex Trading Platform

Every day, over four trillion dollars are traded through accounts in the foreign exchange market, representing the largest financial market in the world. As such, it is important for traders to carefully choose a trading platform that supports their undertaking, and maybe, gives them a competitive advantage in the forex market. It is important to understand that there are a numerous trading platforms that offer trading services to investors. As such, anyone intending to invest in trades has the obligation to do a good homework before settling on a particular trading platform. Here are a few tips that can help you choose the right forex trading platform (commonly known as the forex broker).

The regulatory compliance of the trading platform

Depending on your target brokers, most reputable forex trading platforms are regulated in their country of operation. For instance, all forex trading platforms in the United States are members of a self-regulatory body known as the National Futures Association. Besides, these brokers also get licensed by a state Licensure to allow them to operate within its territories. Therefore, only trade on platforms that are recognized by the regulating bodies within your target jurisdiction.

Currency pair available

As a trader, you may need to consider the different currency pairs that are availed for your trading. if a vast pool of currency pairs are available, you will have the advantage to trade on the pairs that have the highest liquidity.

Some of the commonly sought after currency pairs include the USD/JPY, the EUR/USD, the USD/CHF, and the GBP/USD. Therefore, choose a trading platform that offers the currency pairs that are of interest to you.

The customer support available

No one would want to trade on a platform that does not give them timely support whenever an issue arises while on their trading platform. Most platforms offer a combination of user-support to their customers or clients. Some provide an onsite instant messaging, dedicated telephone numbers, email support and some also provide a self-service feature. In some instances, some service providers provide a combination of these means of communication as support to their investors. Therefore, choose a forex trading platform that has a prompt response to your issues, as well as provides a wide pool of user support options you can choose from.

The usability of the trading platform

Your output in the forex trading market can be affected to a great extent depending on the ease of use of the trading platform you choose. Poor usability of the forex trading platform has a potential to hinder your forex analysis. It is therefore of great importance to choose a trading platform that is easy to understand, highly navigable and is generally appealing. If possible choose a trading platform that supports multiple and distinct ways of accomplishing any trading task. Besides, the trading platform needs to support different devices that access it. In this regard, only choose a forex trading platform whose site or app is non-dependant on the device used to access the platform. It should be responsive to different devices, i.e. desktops, and handheld devices, and therefore should be mobile friendly.

Forex trade – Technical analysis pros and cons

If you have ever been in forex business, you must have come across the technical and fundamental types of analysis. There is a lot of arguments concerning the two analysis methods technical and fundamental with every forex trader preferring one more than the other but other use both. The forex technical analysis method enables traders to understand the trend of the market by predicting the future prices by use of charts, and the process deals with the actual price movements. Fundamental analysis on the other hand use wide-range approach in Forex trade by using the environmental or political factors or events that may affect the currency.

Technical analysis is the most accurate method in foreign exchange business; it has three principles which are:

  • Prices have trends thus analyzing the patterns on the behavior of a currency is very useful.
  • The currency price reflects what is on the market that can affect it.
  • Patterns tend to repeat themselves.

Technical analysis pros

  • The method is very objective – technical analysis basis its focus on tools and charts and does not consider feeling but only facts.
  • Using the method makes it easy for you in making decisions since technical analysis provides you with actual currency price and how the market conditions.
  • Those who use the technical analysis method have useful information about the market trends and the current situation in the market and thus being in a position to know where to invest and where to risk money.
  • Technical analysis method points out the end of the market trend which helps you minimize losses or hold to profits. Monitoring the market currency trends is a vital information you need to survive in the forex market and earn more while losing less.

Technical analysis cons

Despite the benefits above the forex traders who use the fundamental analysis avoid the technical study due to the following reasons:

  • The method relies mostly on the assumption –the technical analysis methods depends on current market trends to predict the future prices which may not be accurate. Sometimes the prediction may be valid but if anything changes the users may incur severe losses.
  • The method uses charts which may not indicate the changing trends till the change occurs which is very dangerous for a foreign exchange trader. Before the tables pick the changing trends, the traders may lose almost a one-third of the ever-fluctuating forex market.
  • There is a possibility of forex market acting on patterns sometimes, but the market is very dynamic. If you rely on technical analysis sometimes, you might end up losing money since it uses the patterns in the market to predict the future prices which may not be true in certain circumstances. In, forex trade the trends might change, drastically and if you don’t notice immediately you miss a lot.

Once doing the forex business you can’t ignore the technical impact analysis brings on but when using it, you also need to be careful and even use the fundamental analysis to weigh the situation in the market. Relying on one method to analyze the market it might be dangerous since not all the times the system is correct. Make the analysis system be your servant not the master hence will enhance your success in the forex business.