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Should I Use My Broker's Online Trading Platform?

Forex Trading | by ForexCycle.com | Wednesday, 02 November 2016 04:29 UTC

The financial markets provide traders with a modern platform to access a wide range of assets and securities such as stocks, forex, commodities, and derivatives. However, it is practically impossible for anyone to trade in the global financial markets without having a brokerage account. You'll need to sign up for a brokerage account with a broker before you can access the financial markets because the broker acts as a point of contact between buyers and sellers of financial securities among other functions.

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More pointedly, brokers provide traders with online trading platforms in line with the best modern practices for trading in the financial markets. The financial markets have witnessed a colossal upgrade from the horse and buggy days when you needed to call your broker to buy or sell your stocks. Now, you can sit in the comfort of your home (or a beach) or anywhere else to access the financial markets on a laptop, tablet or smartphone.

Should you trade with your broker's online trading platform?

Interestingly, many brokers have their own trading platforms, that people using their brokerage accounts can use to access the financial markets online. Stocks, FX, and CFD brokers among others usually go out of their ways to develop proprietary online trading platforms. Nonetheless, opinions are divided on whether traders should access the financial markets using the online trading platform of their brokers.

The first reason for which it makes sense to use your broker's online trading platform is that the broker's platform would have built-in signals that will help you trade with fluid and prompt execution. The fact that the broker owns the trading platform makes it much easier for you to execute your trades with minimal lag and downtime. Conversely, if your trade on a third-party platform, you'll first need to get a trading signal there, based on your technical analysis, before you come back to ask your broker to execute the trade. The time lag will make it hard for you to enjoy the full benefits of a real-time trading environment.

Secondly, a broker's online trading platform will also have quick access to some relevant and important sections of the broker's website. For instance, while trading a FX for a currency pair, you might want to see real time quotes for another currency pair without exiting your trading screen. If you use a third-party online trading platform, you might be forced to exit your trading screen before you can access material data that could influence the success of your trade.

Thirdly, many brokers also include inbuilt instructions and tutorials in their online trading platforms. The brokers consider you as a customer first before anything else, and it is in their best interest to assist you in your trading experience as much as they can. Hence, most brokers will go out of their way to create tutorials (that you can access right within the trading platform) in order to help you succeed.

Some important points to note about online trading platforms

Before you choose an online trading platform, it is important that you consider some important points. To start with, it would be in your best interest to use a trading platform built on an industry standard metatrader4 platform because it provides both traders and their brokers with a win-win scenario to access the financial markets.

The first advantage of MT4 platform is that it sports a friendly and intuitive UI. Hence, you'll find it very easy to navigate the trading markets irrespective of your trading experience as a novice or a veteran trader. Secondly, MT4 is designed to be run on low computing resources; hence, you won't really need to replace your computer and abandon every other task or application before you can run your trading software.

Many brokers also love using the MT4 platform for their trading systems because it is highly customizable. You can easily write your own algorithm to include signals, technical indicators, basic charts, and advanced charting capabilities. MT4 also makes it easy for brokers to include an 'Expert Advisors' feature to help traders automate their trades. In fact, brokers can also customize the 'Expert Advisor' feature in order to provide you with personalized trading automation.

Final words

In the final submission, using your broker's online trading platform or a third-party trading platform is a decision that should be made based on empirical evidence and not sentiments. If your broker's trading platform offers you more value and support for trading success, it doesn’t make much sense to go out of your way to trade with a third –party trading platform. However, there're no one-size-fits-all trading platform; hence, each trader should choose a solution, most suitable for his/her own needs.

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