Trading platform software for real time trading

What is real time trading platform software? Purpose, types and functionality

In exchange trading activities, traders used to use trading platform software. A trading platform is a system where one can place orders, buy/sell different financial products such as stocks, bonds, currencies and commodities. In this list today, we can include electronic currencies. The trading platform is a natural bridge between the exchange and the traders. The platform, at its core, runs exclusively on the network of the stock exchange. This factor contributes to the fact that traders can use it regardless of location.

The trading platform is provided to traders free of charge when they open an account with a broker. Brokerage companies are allowed to add additional tools to the system, often attracting clients for cooperation. Of course, when a trader installs the trading platform software, technical support is provided directly.

The real time trading platform software consists of two parts:

  • Client terminal.

This programme is installed directly on the electronic device that traders should use to make transactions. (computer, tablet, mobile phone). Today, almost all real time trading platforms are adapted for such devices.

  • The company's server.

These are adjustments. The broker introduces them for increasing the use of the trading platform. With these adjustments, the traders' client terminals perform trade operations on orders.

There are many types of trading platforms software nowadays. For example, the real time trading platform is a guide between broker and trader. With the platform, it is possible to trade currencies and stocks, futures, and options. That is why you need to choose a good trading platform that will suit your objectives.

Setting the type and colour palette of the quote chart
Setting the type and colour palette of the quote chart

The functionality of the platforms 

So, the trading platform software functionality is not limited; each brokerage company has the right to make changes and add different tools to the trading platform. So that is why we can see that there is such a difference in the functionality of the platforms.

Of course, we cannot take into account every know-how from brokers; it is simply impossible. So we can consider the essential features inherent to the platform, and that tend to vary.

  • The speed, as well as the number of actions performed. For example, by trading on the platform, you can open up to several hundred trades at a time.
  • User-friendly interface. It is an opportunity to change a colour palette, superimpose several charts simultaneously, and download data quickly.
  • Safety. Safety of platform usage implies complete confidentiality and encryption of your data.
  • Mobility. The use of the trading platform does not depend on the time of day or your location. As a result, the only factor affecting the operation of the platform has access to the Internet.

It turns out that the trading platform software can be adjusted for each trader. All you have to do is to specify your needs. As a result, many brokers are "meeting their clients". Thus, they formulate their functionality of tools when trading.

Explore the mobile app menu
Explore the mobile app menu

Approaches to market analysis 

As a trader, you will need to know how to analyse the market to be successful. There are two approaches to market analysis: fundamental analysis and technical analysis. 

Fundamental analysts track the general state of the economy, interest rates, company profits and so on. They believe that the market may misprice a stock in the short term, but it is bound to come out at the "right" price in a long time. Thus, fundamentalists buy "mispriced" instruments and wait for the market to recognise the error.

Technical analysts believe that the price of any stock reflects all the information about it. Prices change as a result of changes in the opinion of the market crowd. Emotional waves are reflected in price charts, allowing an experienced analyst to recognise buy or sell signals.

Any trading, whether based on fundamental or technical analysis, requires courage. The current price of any security reflects the consensus of all market participants - professionals and non-professionals, long-term investors and short-term traders, large and small investors. With their opinion on an instrument and money in the account, each participant influences the final result - the current price.

A trader who gives a buy order challenges the collective knowledge of market participants because he believes the consensus is wrong and that the stock should rise. Another bold trader, who sells down, also believes that others are wrong and that the stock will go down. 

Which type of analysis is more reliable? 

There is no magic mirror that would allow us to look into the future and guarantee success, neither for fundamental analysis nor for supporters of technical analysis. Instead, there are highly successful traders (Warren Buffett and Peter Lynch among fundamental analysts, and Richard Dennis and his "turtles" among technical analysts) and losers. Which method to choose is up to you, based on your preferences.

  • If you are leaning towards fundamental analysis, remember that "price is tied to value by a kilometre rubber band". So an analysis of a company's share price may be correct, but it offers no guarantee that its price will move in the direction you predicted. 

The same fundamental factors can be bullish or bearish under different conditions. The market reaction to these factors is much more important than the factors themselves. The most bullish market reaction to bearish news is no downward movement. If the Federal Reserve raises interest rates and the market doesn't go down, it indicates that it intends to move up.

  • As for technical analysis, it has no predictive powers. The patterns on the charts are repetitive, but each pattern occasionally misfires.

That is why traders recommend backing up any analysis with proper money management. Most beginners ignore risk control and end up with disastrous results. Money management is a fundamentally important aspect of trading, as it keeps money in your account and mitigates mistakes. This fact applies equally to fundamental analysis and technical analysis.

Technical analysis indicators
Technical analysis indicators

What to trade on the trading platform?  

So, the question is always on the minds of novice traders: "What can I trade on the platform?"

On the platform, you can trade:

  • Shares.
  • Bonds.
  • Currencies.
  • Commodities.
  • Precious metals. 
  • Cryptocurrencies.
  • Options.

Which Stocks to Trade? 

Keeping track of all stocks is impossible. Jumping around from one share to the next is not very useful, as following the same stocks allows you to learn the nature of their behaviour. This pattern is individual and reflects the actions of relatively stable professionals who work with the stocks in question.

Focus on quality rather than quantity - make a small list of stocks to track regularly. These stocks should score highly on two metrics - liquidity and volatility.

Popular financial markets. Choose your strategy
Popular financial markets. Choose your strategy

When the markets are open, there are two prices for each stock - a buyer's price (bid) and a seller's price (ask). Bid-ask spreads in popular stocks with high trading volume are narrow, while they widen significantly in sluggishly traded stocks. Therefore, you are better off trading stocks with narrow bid-ask spreads.

Volatility usually changes cyclically. As you know, market prices are cyclical - stocks fluctuate up and down. Volatility changes in the same way: every stock goes through periods of high and low volatility. Volatility trading is one of the favourite pastimes of professional traders. If you are new to it, it is too early, but you should know that people make money on this kind of trading, and as you gain experience, you should take a closer look at it.

Initially, the stocks get attention when the media and the news discuss them. Of course, there is nothing wrong with that, but you need to establish two crucial habits from the very first steps.

  • If you are interested in a particular stock, look at the behaviour of other shares in that group.

Stocks move in blocks, which analysts call groups and subgroups. So, if you're attracted to one airline stock, look at the behaviour of other airlines' stocks. If most of them are rising, your company's stock will likely increase as well. But, on the other hand, if the majority of the group's shares are declining, it's best to hold off on buying them.

  • Come up with a list of stocks and follow them regularly to learn more about them.

The effectiveness of each strategy depends on market conditions. That is why you should start your analysis with an overview of the markets. Next, use several indicators to assess the weekly charts of significant indices. First, determine whether the market environment is currently bullish, bearish or neutral. Then, using the weekly charts, identify the most robust industry groups. You can then focus on the strongest stocks in the groups and trade them using methods appropriate to the current market conditions.

How to start real time trading in New Zealand? 

To start trading in real time on the platform, you need to choose a broker suitable for the trading conditions. After installing the software and registering on the website, it is recommended to open a demo account. 

Registering on the investing platform
Registering on the investing platform

Demo account 

The purposes of using this account will be broad. Before beginning trading in a real account, it is necessary to master the process of operation of the trading platform. A trader will get acquainted with the peculiarities of the work of a particular broker. 

Unfortunately, trading on a demo account is not always equivalent to trading "in a real account". Not only can the sets of available instruments differ, but also the specifics of order execution and even the quotes. Nevertheless, trading on a demo account, a trader can still get an idea of what to expect when trading with a broker on a real account.

How to open demo account
How to open demo account

Real account 

There are no definitive criteria in determining when you can move from a demo account to a real account. Some newbies are inclined to start trading with real money as soon as they familiarise themselves with the terminal interface. However, the most opportune moment to start trading in a real account is when the trader has mastered the terminal and the basic principles of market functioning. Also, the trader should try to build his trading system or select a ready-made one. This system can also be pre-tested on a demo account to reduce the risks of losses.

But when you realise it's time to move to a real account, you can open one with a minimum deposit. After that, you can use any method you like: bank transfer, e-wallet or credit card. 

Trading is an exciting journey full of risk, incredible events and remuneration for work. Learn, discipline your mind, and success awaits you. 

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