You have some money. It’s taken years of scrimping and saving and being a sensible, well adjusted grown up (despite your every urge telling you to spend like there’s no tomorrow), but you finally have some money. Now what do you do with it? Do you keep saving? Sure, you could do that. But if you want to make your money really work for you, you’ll find that the interest rates offered by even the most generous savings account amount to little despite the lack of risk. Perhaps you could invest? You’ve heard a great deal about people making good money by making prudent investments. Of course, in order to do that, you need to make well informed decisions based on a thorough understanding of your chosen markets.
That’s why Forex (foreign exchange) is a good proposition for new investors. Forex or foreign exchange is, quite simply, the strategic selling of one currency for another resulting in a profit for the trader. You can start as small as you want and use trading in your existing currency as a starting point before branching out into trading across multiple currencies as you grow in knowledge and experience.
Sounds simple, right? Well, unfortunately, it’s not. World currencies are incredibly complex and intricate. However, choosing the right digital platform to trade currencies will not only make buying and selling easier but make the markets themselves much easier to understand.
First off: A Platform is not a substitute for a broker
A platform is simply a tool that enables you to track the rise and fall of currencies and keep tabs on your investment. It can present data in a concise and accessible manner but it cannot advise you or help you to build a strategy. Only a broker can do that, but a good broker will be able to help you choose the right platform or even have one of their own. Click here for a good example. Platforms created by brokers are often referred to as prop platforms.
Prop platforms vs commercial platforms
Prop platforms are the native platforms of your chosen broker, and while they may work perfectly well for you, they may lack features that are of benefit to you personally, so it’s worth shopping around. Commercial platforms are those created by third party developers. As they have more time and effort to dedicate to building the platforms (as opposed to a broker) their platforms may be more feature rich and easy to understand and use.
Needless to say this is the first thing you should look for when choosing a trading platform. Many investors can tell you how infuriating it is for a platform to crash in the middle of an important trade where timing is of the utmost importance.
Fees and charges
It’s inevitable for a small administrative charge to be deducted from a trade by any given platform. Why else would they do it? Some, however, charge more than others and you must find a balance between choosing a platform that has the features to facilitate easy trading without charging a fortune for each transaction thereby eating into your profits.
Whichever platform you choose, make sure that every investment you make is as well informed and considered as possible to insulate yourself from risk.