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Considerations in choosing a forex trading platform include what the trader’s approach is, how reliable the data is, what sort of software the broker provides, what the brokerage fees are, and how large an account the trader will open. If the trader plans on using a computerized trading system, the first requirement is that the trader’s software be able to interface with the broker’s order placement software, and that the interface is reliable and fast. Some brokerage reporting systems are unreliable and fail to report a portion of the trades that take place. Unreported trades can cause a profitable computerized trading system to lose money.
If chart pattern analysis is the approach used by the trader, he will want to test the software provided by each brokerage he is considering and see whether the software meets his needs. The trader may own a software program that he likes and if so, then he might be interested in finding a brokerage that has an interface with his software. Most brokerages support interfaces for at least some of the commercially available software, so the trader is likely to find a brokerage where he can use what works for him. The trader should also check that the forex trading platform provides adequate speed and reliability for the trader’s needs.
Costs are an important factor in choosing a forex trading platform because the higher the trader’s costs are, the more difficult it is for him to earn a profit. A fee-based brokerage provides a cost structure that is easy to assess. Finding the true costs if the brokerage charges no fees but instead uses a spread against the actual market prices is not simple. Many traders can easily calculate the costs of a two-pip spread, The trader can certainly calculate the costs of, say, a two-pip spread, but if using a pip-based broker delays trade execution or prevents accurate data flow to the trader, he should consider moving to a different brokerage.
A forex trading platform can have other hidden costs, including brokers who charge fees for free data as part of the price for using their software. The trader needs to ask specifically about all data he finds important. Some brokerages stack charges but present them piecemeal, forcing the trader to ask about exchange fees, brokerage fees, data fees, and any other costs to discover the true costs he is paying. Position traders need to be aware that if a trading account fails to generate sufficient monthly brokerage revenues, nearly any forex trading platform will assess a fee. A trader opening a large account should inquire whether the brokerage has interest bearing accounts.
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