Forex brokers are popping up by the hundreds these days, and each broker guarantees the best trading experience. The truth is there are many things traders should look for when selecting their broker. The most important factor traders should examine before opening a trading account is the kind of Forex trading software offered by the broker. The big question is then how to choose a Forex trading platform.
The Forex market is overflowing with Forex trading platforms, each one offering its unique advantages and disadvantages. I am not going to be promoting one specific platform, but rather addressing the major issues at hand when choosing your own Forex trading platform.
There is of course a whole list of things to check in a Forex trading platform before using it, but there are two major models in the market, the online Forex platform and the downloadable Forex platform. To say one is better than the other would be false, and each has its ups and downs. However, it is true to say that the online model works for a certain type of trader, while the downloadable Forex platform will appeal to a whole different type of person.
The following are some of the primary differences between an online and downloadable Forex trading software:
Depending on your style of trading, being stuck to your computer monitor might not be for you. If you are a person who moves around a lot, and wants the option to trade from different computers or in some cases, trade Forex from a mobile phone, then a downloadable Forex platform is not for you. Online Forex trading software provides the ability to log in to your account from wherever you are and trade. If you need that flexibility, an online trading platform is better for you. Winner: Online Forex Platform
Speed and Performance
This issue is less blatant and obvious than it was even two years ago. Web speeds are not what they used to be. Having said that, generally speaking, software that is stored locally on your computer will respond and perform better than a program that is dependant on your connection speed. Even if you have a high speed connection, the performance of an online Forex platform is very much dependent on the broker’s servers. If the broker, or the developer of the platform has weak servers, your connection can be the fastest in the world, and the trading platform will still perform poorly. Now, just to be clear, we are not talking about minutes here, but rather seconds. However, when it comes to Forex trading software, a few seconds can make a huge difference, so you want the most responsive Forex platform you can find. Winner: Downloadable Forex Platform
Forex Trading Features
This is pretty straight forward. When it comes to making sure your software is up to date, downloadable software requires you to actively check every once in a while, and update if an update exists. An online environment is updated automatically by the developer, so you, the end user, can always rest assured that you are using the latest and greatest version the company has to offer. I am not saying that updating your software manually is the biggest deal, but not having to worry about that gives you, the trader, the ability to focus on making money. If you use an online Forex trading platform, you will not find yourself in a situation in which you are trading for months on a system that is completely outdated. Winner: Online Forex Platform
This is a tricky one, but when it comes to online vs. downloadable tools, there is generally a basic difference when it comes to the pricing. While you own a downloaded piece of software, a Web-based environment leaves you being dependant on the provider of that service. What this can mean is that while you would pay a one time fee to download the program, you might be required to pay a subscription when working in an online environment. This is of course not always the case, and is very infrequent when it comes to Forex trading platforms. However, on a more intangible level, you might feel more confident using a program that is legally yours and stored locally on your own personal computer. This is very much a personal issue, but when it comes to pricing and the overall feeling, I think most people would prefer a locally saved Forex trading platform. Winner: Downloadable Forex Platform
One of the biggest trends nowadays is what is known as “Cloud Computing”. This refers to a shift in the way users store and access their information. If most users would once access their email in Outlook, which stores your emails locally, today, Google’s email service, Gmail has become one of the most popular email services. If yesterday, people worked in Microsoft Office that would store your documents locally, today Google Docs is becoming increasingly popular. The list goes on, but there is no question that Google is leading the Cloud Computing movement. One of the many advantages of this method is of course constant backup. While a local program can easily lose all your information and settings, say with a crash of your PC, if you are working in an online environment, your data is generally safe and secure, at least in terms of deletion. Winner: Online Forex Platform
While it is true that in terms of losing data or settings, a Web-based environment is better than a downloadable one, there are many people who are hesitant to trust Google or any other company with their data. You might call such people overly paranoid, but I would not say their concerns have no basis. Between Google Docs, Google Calendar, Gmail, Google Tasks, Google turn by turn navigation, and Picasa, I think it is safe to say that Google knows more about some people than those people’s parents know about them. Without taking sides in the debate for or against Cloud Computing, there is no denying that in terms of privacy, a downloadable Forex platform is more secure. Winner: Downloadable Forex Platform
When you trade with an online Forex trading environment, there is obviously no installation process. Now, it is not the five minute process that bothers some people, but rather the use of the computer’s limited resources. Some people are still using relatively older computers, and the lack of storage or processor power is a serious obstacle. The ability to trade in a robust and advanced environment without the concern that your computer will crash on you might be a huge advantage for some Forex traders. Just to be clear, if your computer is REALLY old, than it might not support the online platform either, but once again, generally speaking, Web-based software is lighter on computer resources than a locally stored program. Winner: Online Forex Platform
Now with the issue of compatibility, there is no clear winner. On the one hand, an online Forex environment is not dependant on the kind of computer you are using. The internet works on Mac, PC, Linux, and any other OS last time I checked. This gives the online Forex platform an edge over the downloadable one. However, a Online environment is often times not compatible with all browsers. In fact, many sites and online platforms do not support the fastest growing browser in popularity, Google Chrome. So, at least with a downloadable tool, once you find the system that is compatible with your OS, you know it will work, whereas an online Forex trading platform might work sometimes, while others it will give an error of being incompatible with the browser you are using. Winner: Up for Grabs
In conclusion, the decision whether to trade with a downloaded Forex trading platform or an online environment is obviously not a clear-cut one. The choice very much depends on the kind of person and trader you are. Each has its advantages and disadvantages, but one thing is for sure, every Forex trader should take the above points into consideration when making the critical decision of choosing a Forex broker.