Your trading platform is practically the soul of your entire trading experience. On your trading platform, you manage your trades, observe the motion of the markets you’re involved in, and execute orders conveniently. Trading platforms also allow you to access your trading account even when you’re on the move via your smartphone.
A trading platform can be described as a software program that allows you to trade stocks, bonds, precious metals, foreign exchange, and other financial instruments. Every trading platform comes with a unique set of capabilities and features. Hence, it is vital that you choose the best platform suitable for you.
Nevertheless, so many trading platforms exist, which increases the difficulty of making a choice. In this guide, you’ll see the steps you need to take before selecting a trading platform that’s tailored for you. Whether you’re an expert trader looking to switch between platforms or a newbie searching for a new platform, you will find the steps helpful. In this guide, the comparison of popular trading platforms can be followed by every class of traders.
Steps to Take Before Selecting a Trading Platform
1. Inspect the Laws and Regulations
Ensuring that your trading platform adheres to your region’s local laws and regulations is vital. Depending on the region you reside in, the regulations may be considerably different from other countries.
In some nations, trading platforms are mandated to collect sensitive information like personally identifiable information (PII) before customers can begin trading. Some countries also impose restrictions on the types of financial securities that the trading platform can offer its citizens.
2. Understand Your Trading Level
A key factor to check for when selecting a trading platform is the level of trading you are on. Are you a beginner looking to understand and practice the tenets of securities trading? Are you an expert seasoned in the markets and looking for a platform with innovative features?
Understanding your trading level will help you narrow down your trading platform choices. For instance, if you are a starting trader, it would not be best to start on a platform with many tools that require premium payment. Instead, you should be looking for one that allows you to make demo trades easily to perfect your trading strategy.
If you are an expert, it would be best to make the extra payment for the advanced trading features. This way, you can make better decisions in the market and improve your win probability in the long run.
3. Check for the Platform’s Trustworthiness
To make more money, you have to invest an initial amount of money. This is true in the trading space since you can’t trade unless you have made an initial deposit. Practically, it means that you’d be expecting the platform you choose to safeguard your entire trading capital, profits included.
You’d also want to be sure the platform never sells your personal information to different entities. Traders always want to ensure that the platform they’re considering is properly secured against hackers and any other unauthorized-party involvement.
Before you can check for a platform’s integrity, you need to confirm if the trading platform is registered with the Securities and Exchange Commission (SEC) or another standard regulatory agency. If it is, it adds credence to the trading platform’s integrity. Regulatory bodies perform due diligence when inspecting trading platforms. If the trading platform passes the examination, it means the platform is reliable.
Another aspect you should check for in your potential trading platform is the level of security. The trading platform must utilize high-level encryption to protect customer data and accounts. This way, you can rest assured knowing that hackers will never breach the platform’s security.
You also have to ensure that the trading platform offers two-factor authentication. Two-factor authentication is a way to further secure your account, and prevent any hackers from getting access to your login details. Multi-factor authentication methods include security questions, SMS or email codes, or authenticator app codes.
One of the best ways to search for its historic security level is to make a search engine query on whether the platform has been hacked before. If it has experienced a security breach, you can decide on whether to keep or drop the platform.
4. Evaluate the Associated Fees
If a trading platform has all the needed features and capabilities but is characterized by high fees, it might not be the right fit for you. Hence, before you make a trading platform decision, you need to evaluate its pricing and fees.
The charges across platforms are different in structure and price level. For instance, some trading platforms collect a certain chunk out of every trade you make. Other platforms stay free of fees, provided that your account balance is higher than a particular threshold. When evaluating the fees, please make sure that they aren’t high enough to erode your profits.
It is important to rank all the trading platforms based on their pricing and features. Some might have high fees but few trading capabilities, while others may have moderate fees and more trading features.
5. Ensure the platform has proper customer service
Another factor you need to consider is the platform’s customer service feature. It doesn’t make much sense to choose a trading platform with several features and no help on how to utilize them from the customer service. Hence, it would help to ensure that your potential trading platform has excellent customer service.
In the process of trading, a problem might come up. For instance, a deposit may not reflect in your trading account, or a withdrawal could take too long to go through. Other issues may also arise, like bugs with the program. Events like these can cost you a ton of money by making you miss out on certain opportunities.
First, you can check for reviews about the platform’s customer service on different forums. Going through the trading platform’s app reviews could also give you an idea of how their customer service works.
Second, you can try to contact customer service and see how swiftly they respond. The best platforms come with multiple customer service channels like chat services, emails, calls, Whatsapp, Twitter, etc.
It’s easy for a trader to get confused when deciding on a trading platform. There are several choices out there. You have to filter platforms with specific qualities depending on what you need.
Before selecting a trading platform, you’ll need to take care of a few things, such as inspecting the laws and regulations, understanding your trading level, checking for the platform’s trustworthiness, and evaluating the associated pricing. You’ll also need to ensure that the platform features proper customer service, so that your issues can get resolved faster.
Trading with a top-rated platform will guarantee a good trading experience.