Review of Top Trading Platforms for Active Traders
If you wish to become an active trader, you must choose a trading platform for trading. A trading platform can be described as the software used for trading. You make all trading moves such as opening, closing, managing market positions through an online broker, and so on via the trading platform. Most brokers offer trading platforms for free or at discounted rates instead of a funded account or a specific number of trades every month. There are hundreds, if not thousands, of trading platforms online. However, the ideal trading platform is the one that offers a good mix of robust features and lower fees.
If you are not sure which platform to choose, here is a review of top trading platforms for active traders.
Key points to note:
- Trading platforms use software for managing and executing market positions.
- Platforms vary from basic order entry screens to complex and sophisticated toolkits with live streaming quotes and charts.
- Traders and investors should consider multiple factors into account and balance trade-offs while choosing a trading platform.
Basics of Trading Platform
As mentioned above, a trading platform is a software that enables traders and investors to place trades and monitor their accounts through financial intermediaries. Trading platforms often come with additional features such as real-time quotes, charting tools, live news feeds, and premium research. They might be customised to suit specific markets such as stocks, forex, options, or futures.
You’ll find two types of trading platforms – prop and commercial. As the names indicate, commercial platforms are aimed at day traders and retail investors. These are usually easy to use and come with an array of helpful features such as news feeds, charts, investor education articles, and research data. Conversely, prop platforms are custom-made platforms developed by large brokerages to suit their specific trading needs and styles.
Choosing a platform
Traders use a range of different trading platforms as per their trading style and volume. While selecting a trading platform you should consider both the fees and features available. While day traders and other short-term traders might need features like Level 2 quotes and market maker depth charts, options traders would need tools specifically designed for visualising options strategies.
Fee is an important consideration while choosing a trading platform. For instance, scalpers would prefer trading platforms with low fees due to the large number of trades they undertake. However, you must make sure that low fees do not translate to fewer features and less information. Likewise, some trading platforms may not be welcoming to a specific broker or intermediary while some others might work only with a particular broker or intermediary. You’ll have to check all these before you make your decision.
Lastly, trading platforms might require you to fulfil specific criteria to qualify for use. For example, day trading platforms might stipulate that traders have at least $25,000 in equity in their accounts to be approved for margin trading.
Popular trading platforms
There are numerous trading platforms to choose from. Often the traders can’t decide which one to choose. So here is the review of some of the popular platforms to make your choice easier.
1. MetaTrader 4
MetaTrader 4 or MT4 is a trading platform developed by MetaQuotes in 2005. Although it is primarily associated with forex trading, MT4 can be used for trading a range of markets such as cryptocurrencies, indices, and commodities; via CFDs. MT4 is an extremely popular trading platform because it is highly customisable to suit your trading preferences. It is also possible to automate your trading using algorithms that open and close trades on your behalf based on a list of pre-set parameters.
How to use MT4?
Using MT4 is very easy. These are the steps to follow.
- Create an account – to use MT4, you’ll have to create a live account with the CFD. Once you do that, you’ll set up a live MT4 account from the dashboard.
- Download MT4 – after creating the account, you’ll need to download MT4 to a device of your choice. Once downloaded, you can login with your CFD credentials.
- Open a position – when you are ready to trade, you can go to the tools and click new order to bring up the order window.
The order window might seem complex and daunting at the first, but it is rather easy to understand if you know the components.
Depending on the type of trade you wish to place, you’ll find the following options:
- Instant execution
- Pending order
- Monitor to close your positions and pending orders
- Modify stops and limits on open positions
- Customise MT4 charts
- Add indicators
- Change timeframe
- Set up a price alert
- View your trade history
- Download trade reports
- Add-ons and indicators
As you can see this is a highly customisable platform that suits all your trading needs. There are several indicators and add-ons available along with programs such as Expert Advisors within the platform which allow you to automate the trading on the MT4 platform. In short, this is a user-friendly and highly customisable platform with lots of add-ons.
2. MetaTrader 5
MetaTrader 5 is another popular research and trading platform that can be easily integrated with multiple brokers. The platform is packed with features and can be used as a standalone program or connect to a compatible online broker. It can perform fundamental and qualitative to technical analysis, quantitative analysis and offers in-depth functionality and add-ons through third-party services. It is sometimes considered the epicentre of algorithmic trading development.
MetaQuotes Software Corp. launched FX Charts in 2000 and later developed MetaQuotes to enable trading application development using MQL programming language. The MetaTrader brand was launched in 2003, and soon MetaTrader 4 and MetaTrader 5 were launched.
Although it makes sense to assume MetaTrader 5 (MT5) is an upgrade to MetaTrader 4 (MT4), it is not so. MT5 was launched in 2010 to accommodate non-forex markets, especially stocks, futures, and commodities that are centralised trading exchanges. MT4 was launched in 2005 mainly for trading forex markets which are decentralised.
So, MT5 is not an upgrade of MT4 as they target different end-users, markets, use separate programming languages (MQL5 and MQL4), and do not enjoy backward compatibility. MT5 is better suited for U.S. markets as it accommodates U.S. regulations.
MT5 is the most preferred platform for the algorithmic, high-frequency, black box, and automated trading programs. Its improved high-level object-oriented MQL5 logic framework and smoother back-testing functionality make it popular among active traders. MQL5 offers wider analytical functionalities to simplify and improve algorithmic trading program development.
The MT5 base software is freely downloadable. But you will need data feeds such as quotes and news as the minimum requirement to truly utilise the platform. You can order these directly from MetaQuotes. However, if you are interested in creating or using the algorithms (or Trading Robots), then you can test, buy, or rent them through the marketplace.
For desktop trading, you can access MT5 via download. The web terminal platform can be accessed via a browser to gain immediate access to forex, exchange, and futures trading. If your broker supports it, the MT5 Mobile app can also be used on Android and iOS.
The MT5 base platform offers over 38 technical indicators, 44 analytical objects, 21-time frames, 1-minute history, and unlimited charts. You’ll need data feeds to use them in real-time. Apart from these basic features, the platform also offers additional indicators and features as add-ons.
Some features include
- Technical indicators
- Real-time news
- Order Entry
- Trading Signals
This allows users to procure developers to create specific trading robots and algorithms for a fee. Here, MetaTrader acts as the middleman that connects the customer with the selected developer(s) to ensure the product is delivered for a fee.
MT5 is an in-depth platform that accommodates the most sophisticated seasoned systemic and discretionary traders and developers. It is best suited for experienced and those with a penchant for developing algorithmic trading programs and algorithms. Tech-savvy traders interested in algorithmic trading find MT5 best suited for their needs. Newcomers might find it a bit complex as the learning curve is pretty steep. However, the MetaTrader Market provides many improvements to the platform to enhance results even for a newbie.
Read Also: 5 Common Active Trading Strategies
cTrader is a strong competitor of the MetaTrader4 and 5 platforms. It has been around for some time and underwent several changes from 2011 onwards. Basically, cTrader is an STP ECN Platform and got a lot of attention for being the first and perhaps the only real contender for MT4. What put it apart was its STP (Straight Through Processing) capabilities which the MT4 couldn’t manage. Traders who wished for an STP or ECN trading platform found cTrader to their liking.
A modern platform
cTrader has a cool and slick look, which is a bonus when you stare at the screen for hours on end. This is an obvious plus point that the platform enjoys over the MT4 and MT5 platforms. This has helped it gain the confidence of the younger generation traders who preferred it over the others.
cTrader is modern in appearance and follows it up with several best practices. One of the main features is the cTrader ID single-account approach. It allows you to have a single account that offers access to your individual accounts with different brokers as your setting are saved in the cloud.
Caters to all
cTrader is a feature-rich platform that offers all features desired by a trader. Its charts are packed with several timeframes, indicators, objects, along with various types of charts such as tick charts and Renko charts. This would satisfy any technical analyst. cTrader also has a variety of order types, including the uncommon ones such as Market Range and Stop Limit Orders. It offers QuickTrade mode for scalpers. The Price DoM trading ladder is another useful tool for scalpers.
cTrader Copy is a great space to pursue and review various forex traders and their trading strategies. When you find a strategy, you wish to follow, you can easily allocate funds from your main trading account to a sub-account. This sub-account will copy the strategy, which is a safer approach than handing over your money to a money manager. If you hand over the money to a money manager to trade it using the PAMM system, you are likely to have no control over your money. cTrader Copy gives you the option to exit at any time.
While MT4 has ruled the forex robot trading space, cTrader has an API. On cTrader, you build your robot in c# and your robot will interface with the platform via the Automate API. The scope of the API is expanding with every release.
cTrader has an active community with forums where traders discuss all kinds of topics. The cTrader community encourages discussions from cBot developers, strategy providers, long-term cTrader users, and newbies. The forum is the ideal place to open dialogue with the company. The community is more than just a forum. It has a jobs board, a list of verified consultants, and so on.
Relaunched cTrader help centre is incredibly detailed, user-friendly, and helpful. It encompasses all versions of the platform with a separate section for trading on Desktop and Web, despite the minor differences between the two. cTrader’s YouTube channel has some useful videos in trading fundamentals.
Many brokers offer cTrader and the majority of them are credible.
Overall, it can be said cTrader has matured into a good platform in recent years. It has consistently improved features and has the same core values and benefits it had several years ago. It is the best option for someone new to forex trading.
Currenex is an institutional forex trading platform. It means that several forex traders might find it a bit out of reach. However, as an institutional FX trading platform, Currenex is best suited for advanced traders, rather than retail forex traders.
This trading platform mainly offers feature-rich execution on assets such as FX forwards, swaps, and precious metals trading. Its clientele is mostly hedge funds and other major institutional players because of its placement within the interbank markets. Founded in 1999 in New York, Currenex is considered the world’s first electronic communications network. Its major competitors include trading platforms such as Hotspot, FXAII, and 360T, among others. MetaTrader is not a competitor mainly because the target users are different for both platforms. While Currenex targets institutional traders, MetaTrader targets the retail trader. However, there are a few retail forex brokers who offer the Currenex trading platform after tweaking it to suit the needs of retail traders.
Currenex offers two main types of trading platforms. These are:
- Currenex ECN
- Viking Trader
Currenex ECN trading platform
Currenex ECN trading platform is proffered as a white label trading platform with a few FX brokers. Because of the advanced trading system, the minimum deposit requirements to trade with Currenex are rather high and this could be a deterrent for retail traders. The Currenex trading platform is also rather complex. So, if you have a huge capital, but limited experience, there will be some steep learning curves to negotiate.
But the platform has its unique advantages too. It has a singular feature on the ECN platform where you can view the level 2 depth of the market. The order book or the level 2 depth of the market offers a list of top five bid and ask prices along with the trading volumes at those levels. The ECN platform also offers a unique executable streaming price or ESP for short and Request for Streaming or RSP for short features.
Corporate FX clients use ESP as it enables them to view a list of streaming prices from various liquidity providers. It thus helps the user to pick the best price that suits them. The institutional clients also have access to a feature called the request for streaming. Here, the user requests a few liquidity providers to stream their prices. They stream their prices for a fixed amount of time, which the user converts into an executable streaming price to place orders.
In terms of charts, the Currenex ECN offers traders the standard set of technical indicators. You should remember that because of the institutional capability of Currenex, more focus is on the orders and prices rather than on charting techniques.
This is a light version of the Currenex ECN trading platform and is more customised for the retail trader. But the entry costs are high for this platform too. The platform is based on Java and is more reliable. Furthermore, Currenex Viking trader does not require operating system compatibility.
However, in terms of charting capabilities, the Viking trader is similar to ECN, where it focuses more on order execution, prices, and depth of market rather than on charting techniques.
Should you opt for Currenex?
Currenex is a good choice if you are an institutional trader and have access to a large pool of liquidity for trading. You must remember that this trading platform is better suited for institutional and corporate needs.
So if you are looking for an intuitive charting platform with the ability to run automated trading strategies, then Currenex or the Viking trading platform might not be the best choice. Furthermore, there is no mobile trading app, which might be a concern for you. Additionally, only a handful of brokers offer to trade on the Currenex platform, making it unsuitable for the average forex trader.
As you can see all the platforms discussed here comes with their own unique strength and features. You must choose one that suits your needs the best. While choosing your trading platform, you should make sure that the company behind the platform is reliable, enjoy a good reputation, and actively maintains and updates the software. There must be a large variety of good, credible brokers offering the platform. Furthermore, you must be able to trade the products you are interested in. If a trading platform satisfies all these, go ahead, choose it and start trading.
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