What to look for in an Online Trading Platform?

Online trading platforms are growing in popularity in South Africa and around the world. Online trading platforms allow you to trade various kinds of instruments such as stocks, forex, cryptocurrencies, commodities, and so on.

This recent advent in online trading has been made possible by technological advancements along with regulations that allows retail traders to take part in such trading activity. There are now several low-cost trading platforms that anyone can use to trade online in the financial markets. However, traders should remember that trading in securities & financial instruments involves significant risk.

Popular online trading platforms include MetaTrader 4 and 5, and cTrader, these are offered by many brokers & trading apps worldwide. These platforms have numerous features that make it easy and convenient for traders to conduct their trading activity. Most brokers in South Africa offer the above platforms to trade online while some offer their own proprietary platforms to traders to allow them to execute their trades.

The different trading platforms have different sets of features and the trading platform offered varies from broker to broker. Each trading platform has their own benefits and there is no single trading platform that is suitable for everyone. Several brokers, trading platforms & apps exist online that do not have regulatory oversight and are unsafe to trade through.

We look at the major factors that you must consider before choosing an online trading platform for your safety and better trading experience.

Ease of Use

This is the first factor that you should consider before selecting a platform. There are several platforms out there which are difficult to use and hard to understand. These platforms have a long learning curve and you need to invest significant time in learning how to use the platform. For best results, you should stick with the platforms that are easy to get the hang of.

These platforms have intuitive features that are quick to understand. You should be able to use a trading platform and without mistakes, since not being able to do so could cost you money. Traders need to be able to take decisions within seconds and act on them quickly. Hence, a trading platform that allows you to trade without hassle is of paramount importance.

Accessibility

Accessibility means that you can access the trading platform from anywhere or from any device. A Good Platform should be accessible at all times from different devices without any latency or delays so that you can execute trade seamlessly. It must offer accessibility on any device of your choice. It should be available on all operating systems and devices that you can possibly use the trading platform on. You should be able to use the trading platform on your Windows, Mac, as well as Linux for laptops.

For mobile phones, the trading platform should be available on both Android and iOS. This allows you to access the trading platform from all of your devices, and even if you happen to buy a new device or change your operating system. It must also offer mobile accessibility when you are on move. Like Metatrader which is offered by most brokers for CFDs & forex trading in South Africa is available on multiple devices. Before you select a trading platform, you need to check whether you can access the trading platform from the devices that you have or intend to have. 

Trust

A trading platform needs to be reliable & trustworthy. This is essential because you will be highly dependent on your trading platform as a trader. If the trading platform experiences downtime, or crashes frequently, or executes faulty trades, then you may stand to lose a lot of money. You also need to ensure that a trading platform is not likely to engage in any fraudulent practices.

Before choosing a trading platform, you need to check whether they are regulated by a South African government authority. For those looking to trade stocks, check whether the trading platform is regulated by the JSE. If you’re looking to trade forex or CFDs, then you should choose a forex trading platform or broker that is licensed by the FSCA. Additional ways of ensuring that a trading platform is trustworthy is to do its background check by checking its history, management. You must also check the reviews it has online.

Reviews should be carefully checked to see if there any negative comments and feedback on the broker and how well they respond to them. Trust scores of different trading platforms must be compared on above factors. Some review sites like Forex Brokers SA – compare these & publish their scores.

Fees 

Different trading platforms charge different amounts of fees for their services. You should check the fees charged a trading platform, and compare them with other trading platform. The fees that they charge may also depend upon the instrument that you want to trade. Hence, you should specifically check the fees for each instrument. If a trading platform charges high fees overall, but charges a low fee for the instrument that you want to trade, then it may make sense to trade through that platform.

Instrument Availability

The trading platform must offer the securities or instruments that you want to trade. If a trading platform does not offer a good selection of securities, then it may be better to consider a different trading platform. For example, if you want to trade stocks, then you should only use a trading platform that offers at least the top 40 stocks on the JSE along with other popular stocks. Similarly, if you’re looking to trade forex, then the trading platform should offer all major currency pairs. The wider the selection of instruments available on the platform, the better it is for you.

Market Data

The trading platform should have in-built features that provide real-time & timely market data. Real-time market data is essential for traders since they rely on that data to make their strategies. Charting instruments and a live feed are crucial for you to be able to make effective and profitable trades. The data that you receive from the platform needs to be relevant to the instruments that you want to trade.

For example – As a stock trader, you should check whether the platform provides stock market data like portfolio valuations, transaction statements, and stock holding reports of all the companies on JSE. If you are trading forex, there are particular data that you should look out for such as an economic calendar, market news, market analysis, and so on. If you are getting all your relevant data from an external platform or source, then you can consider a trading platform that does not provide such market data.

Tools

A good trading platform comes with a wide range of helpful tools. These tools can include social or copy trading, algorithmic trading tools like Robots & EA, risk management tools, charting & analysis tools, account management tools, SMS & Email alerts, market data access with real-time market feeds, market news, and a trading journal that allows you to keep track of all your trades.

Another feature that you should look out for in a trading platform is a demo account or a trading simulator. This allows you to test out your trading strategies in real market conditions without risking any money. This tool can be essential for new traders.

Final Thoughts

Remember that online trading in any instrument is a risky act. You should always use proper risk management techniques (such as a stop loss and negative balance protection) along with risk analysis. Before you start trading using real money, you should always try your hand at trading using a demo account where you can trade with virtual money (this is called paper trading).

You should educate yourself on the ways of the financial markets and understand the risks involved. It’s also important to only trade through a trading platform that you can trust. Remember to consider all the above factors before settling on a trading platform. This will help ensure that you have a good trading experience and will also help you make good trading decisions.