If you’re new to forex trading, or even if you’re not, you may be wondering, “What are the best forex trading platforms to use?” Because forex trading has no centralized market, transactions are always completed online and, in many cases, carry some risk due to a lack of regulations. That’s why it’s so important to understand the various trading platforms and the brokers who offer them.
There are a lot of forex platforms available, but not all are created equal. In this article, we’ll take a closer look at forex trading, the risks involved, the best forex platforms for beginners as well as advanced traders, and how to choose the right platform for you.
Best Forex Trading Platforms
Because of the risks involved and the difficulty in predicting market trends, having a great forex trading platform is essential to help you avoid losing on your investments. The best forex trading platforms do so much more than give you a medium for conducting the transactions; they should be easy to use, cost efficient, and come with lots of helpful features.
When choosing a forex platform, it’s a good idea to do your research beforehand. To help you get started, we’ve gone ahead and compiled a list of the best forex platforms on the market, along with popular brokers who offer these platforms.
MetaTrader 4
MetaTrader 4, or MT4, has been around since the early days of forex trading and is possibly the most widely used platform available. MT4 was the first dependable third-party software made specifically for forex, and it remains one of the best.
MT4 is a highly stable platform–like a good car that just keeps on running, the platform rarely experiences problems. It is simple enough for a beginner to use, but also includes great features that will keep experienced forexers coming back to it again and again.
Some of the included features are 1-click trading, which allows you to complete transactions quickly and easily; multiple timeframes so you have some control over how quickly your exchange is processed; multi-charting to help you track market trends and history; over 50 forex indicators; and expert advisors to help you if you have questions or run into any problems.
MT4 is also a highly versatile platform; while many forex brokers offer their own forex platforms, almost all of them offer MT4 as well. So if you choose to use the MT4 platform, you will be able to choose from a wide range of brokers to work with.
MT4 is a browser-based platform, but it can also be downloaded as an app that’s compatible with most mobile devices. This fantastic feature gives you the ability to do your trading from any location or device at any time, day or night.
There is no charge or fees related to using the MT4 platform. Though it’s already one of the best forex platforms in its own right, the lack of fees combined with the diverse features and ease of use make MT4 our top choice among forex platforms.
MetaTrader Pros and Cons
Pros:
- A highly-versatile platform great for both beginning and advanced forex traders
- Free to use
- Mobile capabilities
- Stable and dependable
- Lots of useful features
Cons:
- May be slower than some platforms
Best MT4 Brokers
MetaTrader 5
MetaTrader 5, or MT5, is a newer platform that includes all the features of MT4 but also comes with some improvements and advanced options. It was initially intended to replace the MT4 platform; however, it has never achieved the same level of popularity as MT4, and the platforms’ parent company, MetaQuotes, has allowed them both to stay in use.
Generally speaking, MT5 runs faster than MT4, has bigger and better features, and can handle a greater number of transactions at once. That said, it is also more advanced and may not be as easy to use for beginners.
While there aren’t a ton of differences between MT4 and MT5, MT5 contains a few improvements that not only set it apart from its predecessor, but also from every other forex platform available.
MT5’s most popular advancements include 21 distinct timeframes, which include multiple minute-to-minute, hourly, daily, weekly, and monthly tracking charts; six different types of pending orders, including buy-stop-limit and sell-stop-limit types; the ability to switch from “hedging” to “netting” mode so you can participate in transactions from various positions; and a depth-of-market feature.
Most of the above features are not available through any other platform, making MT5 quite unique in its offering.
Like MT4, MT5 is highly dependable and free to use, making it a popular choice among forex traders. MT5’s faster speeds and advanced features make it an ideal choice for intermediate traders, as well as more experienced traders and professionals.
MT5 also offers a mobile app so you can use it while on the go or at home. Being able to access the platform from a desktop computer as well as a laptop, tablet, or phone is one of MetaTrader’s most popular features.
MT5 Pros and Cons
Pros:
- Fantastic option for advanced traders and professionals
- Free to use
- More timeframes and pending options than any other platform
- Fast performance speeds
- Mobile options
Cons:
- Some brokers only allow limited trading assets through MT5
Best MT5 Brokers
cTrader
cTrader was developed by Spotware as a competitor for the MetaTrader platforms. It is newer than both MT4 and MT5 and is another popular platform option. Like the MetaTrader platforms, cTrader is offered by a wide range of forex brokers. It offers advanced charting options and similar features, but it does have some differences.
cTrader is less customizable than MetaTrader, has less online support, and comes with fewer luxury features. For example, the Metatrader platforms come with economics calendars and signal-trading capabilities, whereas cTrader does not.
Despite its limitations, cTrader has its own set of strengths as well. It contains more charting and analytical tools than the MT platforms, lots of indicators, and depth of market features. cTrader also comes with the cAlgo algorithm and C# language, which many traders find to be more user-friendly software.
With a UK-based server, cTrader may run slower than the MetaTrader platforms, which have their servers in the USA. That said, cTrader is exceptionally easy to use and is a good option for both new and experienced traders.
cTrader has both web-based and desktop versions, appropriate for laptops and desktop computers, respectively. Like the MetaTrader platforms, there is no charge to use cTrader.
cTrader Pros and Cons
Pros:
- Lots of charting and analytical tools
- User-friendly
- Easy to use
Cons:
- Comes with more basic features than other platforms
- Not as much user support
Best cTrader Brokers
eSignal
eSignal is one of the older forex platforms and is among the most advanced platforms you’ll find. It is known for its technical charts and analytics. Designed with professional traders in mind, eSignal is a premium option that sets itself apart by offering a number of high-tech features in addition to the all the usual bells and whistles of other platforms.
eSignal is a highly accurate and reliable platform. It provides detailed real-time and historical trading data, allowing you to track the market minute-by-minute as well as look at past activity to predict future trends.
Other premium features of the eSignal platform include advanced drawing tools, access to hundreds of indicators, the ability to show 500 symbols at once, and a feature called Market Screener Plus, which allows you to quickly screen markets based on various criteria.
Of course, with so many great features and premium additions, there has to be a catch somewhere, right? The catch is the price. eSignal is not free like the MetaTrader and cTrader platforms; in fact, it can get pretty pricey depending on the subscription you choose. That said, it does offer various subscription levels so you can customize your platform to your individual preferences.
Another thing to keep in mind is that eSignal is probably not the best platform for beginners, but it is a great option for advanced and professional traders. Those who are already well established in the world of forex may be more willing to pay for a premium platform to help up their game and increase their investment potential.
eSignal is compatible with a number of forex brokers. The basic plan doesn’t include mobile capabilities, but some of the more advanced plans do.
eSignal Pros and Cons
Pros:
- Highly advanced tools and features–great choice for professionals
- Reliable and accurate data
- Unique features
- Fully customizable
- Premium platform
Cons:
- Expensive
- Limited Classic plan
- May be difficult to use for beginners
Best eSignal Brokers
NinjaTrader
NinjaTrader is a US-based forex platform created in 2004. Though it isn’t one of the most well-known or widely-used platforms, it has slowly built up a following over the years, particularly among American traders.
In many ways, NinjaTrader is similar to eSignal. It offers advanced and customizable charting tools, real-time data, hundreds of preconfigured indicators and a selection of drawing tools. It also comes with a customizable market analyzer tool to help you scan market activity and predict changes.
Despite fantastic tools and tracking features, NinjaTrader doesn’t include any market data, which means it must be connected to a compatible market data provider, such as Google Finance.
Another drawback is that NinjaTrader is only offered by a handful of brokers, so your options when choosing a broker will be fairly limited. Also, NinjaTrader has no mobile options and only comes in a desktop-based option.
Considering its limitations, NinjaTrader can also get a little pricey. That said, it is an effective and reliable forex platform for advanced traders and has payment options that include leasing the platform monthly or yearly, or purchasing a lifetime license for the platform.
NinjaTrader Pros and Cons
Pros:
- Advanced charting tools and features–great option for professionals
- Longstanding, reliable platform
- US-based platform
Cons:
- Expensive
- Limited customization and flexibility
Best NinjaTrader Brokers
Which Forex Platform is Best for Beginners?
If you’re brand new to forex trading, you may be confused by the different terminology and all the options available to you. How do you get started in forex? How do you know which options are best? Which platform will be able to help you through the newbie stage?
Many people agree that the MT4 platform is the best overall forex trading platform, and it is certainly one of the most popular options. It is also a great platform for beginners. The platform is easy to use and to find your way around. The MT4 platform includes many great features to help those just starting out to improve their trading skills, as discussed above.
That said, everyone is different. Some newbies may prefer MT4, while others may consider cTrader or even a small, broker-connected platform easier to use. If you’re just not getting the hang of your initial platform, it’s okay to try something different. Whatever platform you choose, just be sure and give yourself plenty of time to find your footing.
When choosing your beginner’s platform, some features you’ll want to look for include:
- Access to expert advisors
- 1-click trading
- Easy-to-read charting and diagrams
- A simple, user-friendly interface
- User guides or forums
Which Forex Platform is the Most Advanced?
If you’ve been doing forex trading for some time, or if you have an international business with expanded foreign exchange needs, you may want a platform that has more advanced features. Maybe you’re not entirely sure that a free platform will have all the features you need and, as a result, you’re looking for an advanced premium option. Which platform should you choose?
The eSignal platform is one of the most advanced forex platforms available. As mentioned above, eSignal was created specifically for experienced traders who want to be able to customize their platform. It’s a great choice for professionals looking for superior technical analysis. It also offers advanced drawing tools and allows you to see and compare up to 500 symbols at once.
While eSignal has some fantastic features, it is also one of the more expensive options. If you’re looking for a premium or advanced platform that doesn’t cost quite so much, do a bit of research. Understand the features you want most and the ones you could do without. There are plenty of forex platforms available, so with any luck you should be able to find one that works for you.
When selecting an advanced platform, some features to look for include:
- Advanced charting options
- Analytical tools
- Customized market scanning technology
- Customizable interface
- Lots of indicators–100 or more
Choosing the Right Forex Platform for You
Whether you’re new to forex or have been trading currencies for years, understanding the various platforms and what each one has to offer is important in choosing the platform that works best for your personal trading needs and preferences.
Remember that not all platforms are created equal. Some are free to use, while others charge yearly or monthly fees. Some paid-for platforms offer better value for the money than others. Many platforms offer similar features, but may include different add-ons that would appeal to different customers. Some platforms are much easier to use than others.
When choosing a platform, make sure you know what’s important to you. For example, if you’re an individual who just needs some foreign currency for vacation, a simple, cheap or free platform would probably be the best option. If you’re a new user who hopes to learn about forex and eventually become an investor, start with something user-friendly with features that will help guide you through the process.
If you own a business or are an experienced investor, you may want to choose a platform with advanced or customizable features. You’ll want to compare prices and fees associated with the various premium platforms before deciding on one.
Remember, if you start using one platform and you just aren’t getting the hang of it, it’s okay to try a different one. With a bit of trial and error and a lot of patience, you should be successful in finding the forex platform that works best for you.
Why Trade Forex At All?
Corporations, banks, and individual traders and investors conduct forex transactions for a number of reasons. Some of these reasons may include:
- Selling internationally
- Conducting third-party transactions
- Traveling
- Making a profit
Large companies who do business with foreign countries need a way to convert the local currency into the currencies of the various countries where their goods are sold. For example, if a clothing company is based in the United States but does business in France, Egypt, and China, the company will need to be able to accept currencies from those countries and exchange them for American dollars.
Banks often conduct transactions on behalf of both individual and corporate clients. Central banks will also perform certain types of forex transactions, called swaps, to make sure they have foreign currencies available to their member banks.
Individuals may trade local currency for foreign currency if they’re going to be traveling. For example, if you were traveling from the USA to Australia, you would need to convert USD to AUD in order to pay for the usual expenses of traveling–food, lodging, transportation, and entertainment.
One of the most common reasons for forex trading is to make a profit through investment. Because exchange rates are constantly changing, a trader may be able to buy a foreign currency at one rate and sell it for a higher rate. Having a solid understanding of world economies and learning to predict rate fluctuations is essential for making a profit through foreign exchange.
Before You Begin Trading: Understand the Types of Forex Trading
There are different types of forex transactions used for a number of purposes. These transactions include:
- Spot transactions
- Swaps
- Forwards transactions
- Futures transactions
- Options
Spot trading is the simplest form of forex trading. It occurs when two currencies are exchanged between two parties at the current exchange rate. This is the most common type of transaction used by individuals and small parties. In theory, spot transactions happen “on-the-spot” and are effective immediately, though it sometimes takes several hours up to a day or two for the transaction to process fully.
Swaps occur when two parties trade currencies with each other at the current exchange rate and agree to return the currencies at a future date, and at the future rate. While similar to spot trading, swaps are more short-term; the parties involved are essentially borrowing currencies from each other. Banks often use this method for short-term lending and for keeping a supply of foreign currencies on hand.
Forwards transactions are when two parties agree to make a certain transaction at an agreed-upon future date. The parties involved set the terms of their agreement and pay a fee to ensure the transaction occurs as agreed. Some businesses and investors may engage in forwards trading.
Futures transactions are similar to forwards transactions, but they are much more regulated. A futures transaction is less of a hand-to-hand deal, making it more strict and protected than a forwards transaction. Futures trading is a preferred method of forex trading by most large international corporations.
Options are like futures contracts, but they allow either party to buy or sell the contract at some future date before it expires.
Why Use a Trading Platform? Mitigate Risks of Forex Trading
Since the exchange rate is always fluctuating and transactions are almost always done online, there are some risks involved in forex trading. Some of these risks include:
- Transaction risk
- Leverage risk
- Interest rate risk
- Country risk
- Counterparty risk
Transaction risks are associated with the amount of time that passes between when a trade is agreed upon and when it is completed. The greater the time gap, the greater the risk that currency values will change. Exchange rates fluctuate so much that you may buy currency at one price in the morning but have to pay a greater price by the time the trade is finalized in the evening.
Leverage risks are fees associated with leverage. The leverage fees, or margins, can fluctuate almost as frequently as the actual exchange rates. Depending on how much they fluctuate, the investor may be required to pay additional margins on their trade.
Interest rates are closely associated with exchange rates. If a country’s interest rates rise, so will the value of its currency. The same is true if interest rates fall. The fluctuations in interest rate can cause you to lose money on an investment as easily as you can make a profit on it.
Country risk denotes the risks involved in dealing with another country’s currency. The value of the currency may change based on political, economic, or social changes. National emergencies may also cause fluctuations. Learning to predict how a specific country’s exchange rate will fluctuate is important in forex trading, but it’s impossible to predict every situation that may come up.
Counterparty risk refers to any risks involving the other party in a trade agreement–the seller, broker, or dealer. If the counterparty is unable to keep their end of the agreement–or refuses to do so–it puts the investor at risk of losing money on the exchange. Counterparty risks are generally greater in a volatile market, but the risks never completely disappear even under ideal market conditions.
Do I Need a Bank to Trade Forex?
If you do your forex trading through a broker, you don’t necessarily need to connect your bank account. However, experienced traders may choose to do their forex trading through a bank instead of a broker.
If you choose to trade through a bank, you’ll need to open an account that supports multiple currencies, including all of the following:
- USD
- EUR
- CAD
- AUD
- GBP
- JPY
- NZD
- CHF
When trading forex through a bank, keep in mind that most banks don’t offer any leverage, so you’ll need to deposit a sizable amount of each currency to get started. Banks may also offer larger spreads than you would find with most brokers.
Conclusion
Now that you know about forex benefits, risks, and platform options, you’re ready to get started! If you’re a professional forex trader, you should be able to confidently choose a different platform that is more in line with your unique trading habits.
If you’re new to foreign exchange trading, keep in mind, it may take some time and practice to really become a forex pro. Understanding currency exchange rates and predicting market changes are not skills that you can learn overnight.
Your best bet is to start small, then build up to larger and more diverse transactions over time. Don’t get discouraged if things don’t work out right away. Keep working at it and, soon enough, you’ll be trading currencies successfully right along with the forex gurus!
