Trading Platform

A trading platform is an application that enables a user to do trading in any financial instrument. Generally, these are provided via brokers or financial institutions. Also, several tools and features might be included with the purpose of trading in mind, such as keeping an eye on market data and keeping track of a portfolio. These offer everything from simple, intuitive interfaces to advanced analytics. They enable investors of all experience levels, from novice traders to seasoned professionals. A proper choice of a platform should be made in view of the degree of usability, fees, and, finally, specific features that may be needed to support the needs of trading. 

What is a Trading Platform? 

A trading platform is any software application mainly used for trading financial instruments such as stocks, bonds, currencies, and derivatives. It allows one to set trades, monitor market data, and manage investment portfolios. Brokers or financial institutions usually provide trading platforms to their customers for electronic access to the financial markets. 

Understanding Trading Platform 

A trading platform acts as a bridge between investors and financial markets. It includes various features like real-time market data, charting tools, news feeds, and the ability to execute orders. These are designed to make it significantly easy for traders to operate in this complex world of financial markets. 

Understanding Trading Platform 

A trading platform acts as a bridge between investors and financial markets. It includes various features like real-time market data, charting tools, news feeds, and the ability to execute orders. These are designed to make it significantly easy for traders to operate in this complex world of financial markets. 

Types of Trading Platforms 

Trading platforms can broadly be classified into two categories, namely, 

1. Commercial Trading Platforms

Commercial trading platforms have been designed for retail investors and day traders. They boast an exhaustive list of features and tools and include the following: 

• User-friendly interface 

• Charts and technical indicators, which can be customised 

• News and research tools 

• Educational resources 

• Demo accounts for honing your trading skills in a practice environment 

Examples of commercial trading platforms include E*TRADE, TD Ameritrade, and Charles Schwab. 

2. Proprietary Trading Platforms

Proprietary trading platforms are tailor-made by financial institutions and brokers to execute their trading activities. These platforms precisely cater to the needs of professional traders and institutional investors. Proprietary trading platforms represent a set of the following advanced features: 

• Direct market access 

• Algorithmic trading 

• High-frequency trading 

• Institutional-quality market data and analytics 

Examples include the Bloomberg Terminal, Reuters Eikon, and Refinitiv Workspace. 

Features and Functionalities of Trading Platform 

Trading platforms are a suite of functions and facilities that suit various traders’ needs. Standard features they share include the following:  

1. Order Entry and Execution: With trading platforms, users can enter multiple order types, such as market orders, limit orders, or stop-loss orders. Real-time order execution is also available, ensuring any trades will be matched at the best price. Market Data and Analysis

2. Market Data: Trading platforms give traders access to current market data, quotes, charts, and news feeds. They provide technical analysis tools such as chart patterns, studies/indicators, and drawing tools.

3. Portfolio Management: Investment portfolio management can be done using most trading platforms: track your position, calculate profit and loss, and report.

4. Research and Education: Most of them have research and education facilities that enable traders to make better choices through analyst reports, economic calendars, educational articles, and many more.

5. Mobile Access: Most trading platforms nowadays also have mobile applications, which clients can use to access their accounts and conduct on-the-go trades. However, the features available in mobile applications compared to those provided on desktops are usually limited.

Examples of Trading Platforms 

Following is a list of some of the popular trading platforms: 

1. E*TRADE: E*TRADE is one of the principal online brokerage firms offering different trading platforms to investors. Its flagship platform, the Power E*TRADE, comprises a suite of advanced charting tools, options trading capabilities, and a mobile app.

2. TD Ameritrade: TD Ameritrade offers several trading platforms, including Thinkorswim, to active traders. Thinkorswim provides a long list of features, including advanced charting, options trading tools, and a customisable interface.

3. Charles Schwab: Charles Schwab offers an in-browser trading platform called StreetSmart Edge. This intuitive platform offers up-to-the-bid market data, customisable watch lists, and several order types.

4. Interactive Brokers: Interactive Brokers is an international electronic brokerage that provides an advanced, proprietary trading platform known as Trader Workstation, or simply TWS. The TWS offers direct market access, algorithmic trading tools, and other advanced risk management features.

Conclusion 

The trading platform is the basic gateway to trading in financial markets. It offers a bundle of features and functionalities necessary for rookies and seasoned players. When choosing a trading platform, one needs to factor in the aspects of usability, features provided, cost, and customer support. A correctly chosen and appropriately utilised trading platform provides an added advantage to traders in financial markets. 

Frequently Asked Questions