Today, there are a large number of tools for investors to make transactions with various assets on the exchange. The main trading tool is a special terminal, that is, software, which reflects important market data, and it is possible to place orders.
Novice investors may find it difficult to navigate and choose software with a user-friendly interface, risk management functions and strategy testing. Today’s article will discuss what criteria you should pay attention to.
Types of trading applications
Today there are 4 main ways of making transactions on the exchange online:
- Desktop trading terminal. This is a program that is installed on a computer to monitor the market and execute transactions. It is terminals of this type that are most common among investors who are actively trading.
- Web terminals. Many brokerage companies provide the ability to perform transactions through the web interface. Often, such systems are combined with a document management module, mainly used to control the market situation, and not for active trading.
- Mobile terminals. In addition to desktop terminals, mobile applications are often used that allow you to monitor the state of the investment portfolio and make transactions. Usually, the functionality of such applications is more modest than that of their desktop counterparts, but they are well suited for operational control.
- Automated trading systems. According to statistics, for quite some time now, most of the transactions on modern exchanges have been made by robots. At their core, these are programs that conduct trade in accordance with the strategy laid down in them.
Today we will talk about the first option – desktop terminals for trading. What should you pay attention to when choosing them?
Broker’s own development or external solution
There are dozens of brokers working on the stock market at the moment. These include both banks that offer their clients the services of providing access to the exchange, and companies that are exclusively engaged in brokerage activities. The sizes of these companies also vary widely, so not all of them can afford to develop their own software solutions for their clients. Such brokers provide their clients with popular trading programs QUIK or MetaTrader.
At the same time, those companies that have sufficient resources develop their own trading solutions. There are a number of reasons for this:
A “native” terminal allows you to provide more functions – some of them have a number of plug-ins that significantly expand the functionality more influence of investors on developers – in the case of their own terminals, developers from brokerage companies instantly see feedback on innovations or reactions to shortcomings. Therefore, new features appear faster.
Deeper interconnection with the broker’s trading system – for example, a single money position service may be available to clients of such a broker. It allows you to use funds in one of the accounts as collateral for transactions in other markets, which makes trading easier and reduces the amount of resources required to implement different trading strategies.
Convenience of the interface
The trading terminal is an important tool, any click on which can lead to both a successful deal and financial losses. Therefore, the system interface should be user-friendly and customizable. Therefore, it is important to be able to connect an additional desktop, activate the dark theme, as well as the “Quotes” plugin, with which you can create an unlimited number of tables with quotations, and other functions.
Risk management functions
Trading software should provide the ability to configure risk management parameters, which will allow you to control risk, minimize possible losses during trading, and more reliably fix profit on transactions. For example, it is good if the program allows you to configure a ban on placing new orders and opening new positions for a specific account if the established conditions are violated.
It is also important that the software has the ability to use stop loss, take profit and trailing stop orders. Such orders are used to protect open positions – if the price goes down sharply, losses will be limited, and profits will be fixed.
Performance
Performance is important for a trading terminal. The program should work equally well on old or weak computers / tablets, when performing dozens or hundreds of transactions per day, with large-scale movements in the market. On days when important economic news is released, the amount of market data sent by the server to the terminal can grow tenfold in a short time. If the program is not optimized enough and is running on a weak device, it may simply freeze at the most crucial moment, which may result in a loss of money by the user.
In addition, there is a whole class of active traders on the market (for example, scalpers, arbitrageurs and high frequency traders) who, even on a normal trading day, carry out a large number of orders and transactions. Such traders rarely use GUI terminals for direct trading, but often use similar software to control their positions, however, even a powerful computer may not “digest” a large amount of data generated by them. The merchant must be able to handle all such cases.
