In financial trading, a software that is used to execute a trade such as managing market positions, opening, and closing through an online broker that acts as a financial intermediary is called – A Trading Platform. Brokers usually offer the use of these services for free or at a price in exchange for maintaining an account and/or doing a minimum number of trades per month. Some don’t require a maintaining balance, but will charge you for every trade you made through the platform. Basically, this service or tool is useful for making basic order entries by investors that are just starting up in trading.

Trading commonly refers to stocks and bonds, but it encompasses a number of items that can be traded like currencies (real or digital), future markets, or stock options. The platform offers trading charts analysis tools, news feeds, up-to-date quotes, and research to help the investor in navigating through numerous markets in the platform.

Trading Software

This helps investors in trading and the analysis of the stocks, options, or currencies. In addition to learning the basics of forex and trading, using trading software can help you to effectively get the most of a trading session. Common features of trading software may include the basic functionality in a trading platform plus technical and fundamental analysis, automated trading, and sandbox simulation. It is not necessary that trading platforms provide their investors with software, you can purchase third-party software to supplement the ones you get from the brokerages.

Rise of Cryptocurrency and Legalities

In the last decade, there has been a rise in popularity with cryptocurrency. A digital medium of trade that is decentralized and is accepted in many countries and convertible to real money. According to although there are some warnings about engaging in cryptocurrency trading there are also those that have made profits from using a trading software in crypto trading platforms. The uncertainty stems from the fact that it is neither illegal nor does it have a standard status like money across different states or regions.

Trading Regulations

In the United States trading is being regulated by the National Futures Association (NFA) and they have set some basic rules for any brokerage to comply.

  • One is protecting small investors by labeling them as customers when they have less than $10 million and many small businesses.
  • Leverage should be 50:1 this means a deposit requirement of only 2% on the notional value. This to curb uninformed investors to take high risks. This only applies to major currencies such as the British pound, the Japanese yen, the Swiss franc, Euro, the Australian, Canadian, and New Zealand dollar, the Swedish krona, and the Norwegian and Danish krone.
  • For minor currencies, available leverage is limited to 5% of the notional transaction value or 20:1.
  • For short options, the notional transaction value amount and the option premium received will be the security deposit maintained.
  • For long forex options, then the whole option premium will be required as security.
  • To prevent holding simultaneous positions in the same forex asset, the first-in-first-out (FIFO) rule should be implemented. This also means that there is no possibility of hedging when trading forex.
  • Only one or more qualified institutions in the United States or in money-center countries should hold the money the broker owes the customer.

Aside from being exciting, trading is also very profitable, but you also educate yourself thoroughly to avoid painful losses. Also, don’t fall for quick and easy money schemes so that involves trading. This business requires practice and many hours of research in order to call yourself an adept investor.

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