What is a Forex trading software?
A Forex Trading software is a computer program which enables traders to analyze the currency exchange market, provide charting prices, execute orders and monitor their accounts based on pre-set instructions.
Forex trading software refers to all automated trading systems or applications also called Expert Advisors. Expert Advisors are add-on software for Metatrader4 platform, programmed to execute orders on your behalf following pre-designed rules automatically.
Expert Advisors goal is to improve your trading efficiencies. MetaTrader, on the other hand, is a currency trading platform which links your computer to forex trading software.
Forex trading software automatically carries out your trading entries and exit without necessary being physically present at the time.
Trading systems are handy especially for beginners, frequent travelers or traders with multiple accounts.
Beginners, for instance, have little experience in trading. They tend to go for the quick success promised by the Internet and forget about managing risks. This is one of the reasons why many people fail before even starting.
Trading is about setting a trusted method or plan that will help to control risks and to put the odds in your favor. Thus, they need to opt for a trading application to help them choose a more profitable currency trading pair and alert them before entering a risky trade.
How do automated trading systems work?
An automated system helps you to achieve your goals by executing your orders and let you take care of your other businesses. Therefore, you should match your pre-set instructions with your trading plan or strategies.
Often, traders will download a forex trading application on the internet and use the trading platform or brokers' pre-selected rules. These rules set in advance are the conditions under which the system will enter or exit a trade, or impose stop losses to minimize your losses in case a trade moves against you.
Other traders opt for a more customized system where they program the app according to their trading plan and profit targets.
Once you set your conditions, the system will then monitor your accounts, analyze the market's trend and locate the most profitable opportunities based on your pre-set rules.
Online Forex Trading Software Benefits
1. Emotionless and increase discipline. Forex market displays a higher level of risk compared to other financial assets markets. Therefore, dealing in it can be quite emotional (anxiety, panic) and cause you to make bad decisions. Also, your emotions can tend to take your eyes off of your trading plan; whereas a trading system will get you to stick to it.
2. Minimize the risk of failure. Forex platforms will alert you anytime there is a risk of failure in a transaction you are about to enter.
3. Test-drive. Most trading platforms offer a test drive which is a free trial before you start dealing with your account.
4. Real-time. It is almost impossible to sit in front of your computer, capture every market trends to make the best move. However, your automated system will take your place and immediately make a move after locating a profitable trade.
Although Forex automated systems allow traders to succeed and minimize their losses, they still require a human eye to monitor them in a case of mechanical or internet connectivity failures.
Top Five Forex Trading Software
It is not easy to determine which trading app performs the best as each has benefits and disadvantages. Based on success rate pricing, here are a top five of the best Forex trading systems on the market today.
Founded in 2001 as a GAIN Capital Holdings subsidiary, Forex is one of the best Forex trading software in the US. Forex.com offers the most powerful and the largest platforms such as MT4 worldwide. It operates in more than 150 countries, and it is regulated in the USA, UK, Canada, Australia, Japan, Cayman Islands, and Singapore.
Forex.com has a good reputation from both the beginners and professional traders. Being a large and leading currency exchange broker, Forex.com offers 84 currency pairs with American people having access to 83.
Forex.com offers multiple and highly regulated platforms (registered with CFTC and a member of NFA).
With nearly 20 years of experience, Forex.com is a well-trusted currency exchange platform. They offer various advantages such as low spreads (they start at 1$), newest market research, a demo account, Live trading session, professional guidance and free tutorial for beginners.
To set up an account with Forex.com you need to make an initial deposit of 250$. The good news with the software is that there are no commissions on the trades you make.
Forex.com specializes in CFDs (Contract for Difference) trading; therefore dealing with them implicates a higher risk of losing money due to leverage. Please make sure you understand how to trade CFDs and consult their tutorials before setting up an account.
Acquired in 2009 by US brokerage house TD Ameritrade, this forex trading software is the best for both the beginner and the advanced trader despite its high trading fees. Thinkorswim is regulated under CFTC which makes it trustworthy trading software.
It allows you to trade 120 currency pairs and to integrate different investments accounts in one place with an initial deposit of 2000$ to start forex trading.
Their users benefit from a variety of investments courses, free webinars, and tutorials. Additionally, Thinkorswim has an easy to use mobile app, but their platform is only available for download.
You can also create watchlists and alerts so that the system will automatically enter you in a profitable trade or start stop-losses to avoid staying in a losing position for long.
Thinkorswim offers its users with better charting and technical studies to help them analyze the price on the market before making a move.
Besides, they have a few unique features such as Thinkscript which allows you to write your algorithm and customize your platform. Thinkorswim has a prophet tool to help you predetermine the future performance of a particular currency pair.
Thinkorswim charges a commission on every trade and offers higher trades.
3. Ally Invest
Formerly named TradeKing, Ally invest is known for its low commission fees (free for forex trade) which makes it a good choice for beginners or active traders on a budget. Ally's web-based platform makes it the best tool for users as it provides easy access from multiple devices.
Ally Invest allows you to trade more than 80 currency pairs (including exotic pairs) and offers relatively tight spread (as low as 1 or 2 pip).
Ally offers a wide range of useful features such as real-time streaming, alerts on potential risks, charting tools, a mobile application and an active customer service that assists you 24 hours a day for five days a week.
There is no commission fee to trade forex on Ally Invest, and the minimum deposit is 250$ to open an account although Ally recommends a deposit of 2500$.
However, Ally Invest lacks educational resources and does not allow you to integrate your forex trading account with your other investments. For example, if you want to start trading stocks, you will have to open a separate account.
Created in 1996, Oanda offers its clients a trusted and regulated service and 71 currency pairs to trade. Oanda operates in the US, UK, Australia, Singapore, Japan, and Canada.
The software has a desktop, web-based, and mobile phone application. It doesn't require a minimum deposit to start trading, and it is commission free.
Oanda's platform is easy to set up and has powerful searching tools with 58 technical indicators to help you create a trading plan.
Oanda doesn't offer great courses or training, and it won't allow you to set alerts or watchlists.
Sub ParagraphNadex is a CFTC regulated entity with a low commission fee and spreads compared to its peers.
The platform gives you access to a demo account before setting up a trading account. The initial deposit to start trading is 250$.
Nadex offers the lowest currency pairs (10 and no exotic pairs) and technical indicators (22) making it a better tool for beginners.
Nadex also lacks alert tools making it difficult to monitor the market trend and make a move on time.
On the other, Nadex offers multiple and regularly updated learning instruments such as articles, blogs, courses, training and so on.
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