The Foreign Exchange (Forex) is the foreign currency and exchange market and is an incredibly risky and complex trading market. Usually favored by large organizations, Forex is a market that retail investors should approach with caution.
Before making your first trade, you should spend some serious time researching the market so that you understand its volatility, the confusing language around it, and the mechanisms that are in place.
Something else that you will need to acquaint yourself with is the different types of trading platforms on offer, which is where we come in. Read on to find out everything you need to know about Forex trading platforms.
Finding A Broker
Chances are you have seen a commercial on TV or an online advert espousing the benefits of a particular Forex broker. Don’t be foolish and rush to sign up with that company because they are the only one you know about.
There are dozens of great brokers out there, some of which might be suited to your particular needs and some of which aren’t. Fortunately, there are great aggregator sites that help you answer the question, how do I find my MT4 broker?
Think of these aggregator sites as the comparison sites that you use to find deals on your car or home insurance. Each broker has a star rating made up of actual customer reviews and also has a list of associated pros and cons.
What To Look For In A Broker
Now you know about the comparison sites you can use to find a broker, what are the qualities you should be looking for in one? Here are a couple of key pointers:
• Regulation: If a broker is regulated that means you are protected when things go wrong. Some brokers are regulated in just one country whereas others are regulated and licensed globally. For the best protection and safety, choose to trade with one with a high level of regulation.
• Customer Care: This doesn’t just mean how friendly the broker is when you raise a problem with them. It covers how easy it is to make withdrawals and how easy to access guidance.
• Specificity: Pick a broker that specialises in the area you want to trade in. Are you looking to exclusively trade in Forex? Do you want to dabble in crypto too? Whatever your needs are, pick a broker to match them.
Now for the bit that new traders find the most confusing, the trading platform is often because of the interchangeability of the words platform and broker. Think of a platform as an operating system, like the Windows program that is running the computer you’re reading this on.
The most commonly used trading platform is MT4 which was released to the market in 2005 as a response to the flood of retail investors that were getting involved in Forex trading. Created by a company called MetaQuotes, MT4 provided a standardized platform program for brokers to use.
This saved brokers huge amounts of money on developing their own platforms and also allowed users to change brokers without having to learn how to use new platforms. As a result, there are only two trading platforms MT4 and MT5 (which was released by MetaQuotes in 2010) that traders need to know how to use.
What’s The Difference Between MT4 And MT5
Contrary to popular belief, MT5 was not an upgrade on MT4. Instead, it was released to allow users to access CFD’s, stocks and futures in addition to Forex. Whereas MT4 was designed specifically to be used for Forex and other decentralized markets.
Choosing which one to use ultimately comes down to what you plan to do with your trading. If you’re going to exclusively trade on Forex then you are better placed using an MT4 platform and MT5 if you’re going to mix it up.
There are two main trading platforms that you can utilize when trading. What should be your main concern though is finding a trusted and reliable broker to suit your needs. Everything else should come secondary to that.
When it comes to learning how to use MT4 and/or MT5 platforms, your broker should have a reliable guide. If you’re still lost, head over to YouTube where there are literally hundreds of helpful videos with step-by-step guides on how to use MT4 and MT5.