What Are Online Trading Platforms and How Do They Work?


Online trading platforms are used by individuals to make investments, buy and sell on the financial markets and view live price movements. They are the software that’s downloaded onto a computer, laptop, tablet or even smartphone that provides the electronic infrastructure to buy and sell many different financial instruments. Where in the past you would have needed to use a broker to make such trades, online trading platforms cut out the middleman.

What Are Online Trading Platforms and How Do They Work?

Using Trading Platforms

The technology underlying trading platforms is incredibly complex, involving many complicated algorithms. For the user though, the experience of making investments on an online trading platform is relatively simple. Once you have downloaded an online trading platform and opened a trading account you can begin trading.

Every platform is different, but you will be presented with live prices for the many available investments, whether you’re hoping to trade currencies, shares, commodities or anything else. With a few clicks you can quickly begin buying and selling the financial assets you desire. More advanced options can be used for putting in place stop-loss and limit orders to protect your finances.

Benefits of an Online Trading Platform

The main benefit of online trading platforms is that you can buy and sell across many financial markets from anywhere in the world with an internet connection. This means you can start buying and selling shares at a time and place most convenient for you, with no need to rely on a stockbroker being open.

A wide variety of financial assets can be invested in all from one place and using the same online trading platform means you can easily keep track of all your investments conveniently. With live prices, it also means you know exactly what buy and sell price you get for each asset. Plus, with stop-loss and limit orders you can protect your investments as these tools will trigger a sale if prices fall below a certain level.

Live Streaming

Online trading platforms are linked to the live markets, presenting current prices for all financial markets and allowing real-time trading. This means you can make an investment or trade almost instantly, based on breaking news or other factors as they happen. For profiting or avoiding losses, working with live prices is essential. Unlike when using a broker who may require your permission to buy or sell, this saves a lot of time.

Essential Features

There are many different online trading platforms out there, but to help decide which one to use there are a number of features you need to ensure are present. These include:

  • Real time prices
  • Charting and analytical tools
  • High security levels
  • Demo accounts
  • Automation options

These features will all help make trading the financial markets a lot easier and more convenient. Beginners should get to grips with their chosen trading platform first before starting to use more advanced features such as the charting tools.

Online trading platforms have made investing across many financial markets a lot more accessible to individuals.

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