A Beginner’s Guide to Online Trading Platforms
What online trading platforms are, in essence, is trading via the Internet with the help of trading software that a broker provides. For some, a trading platform can be quite confusing. However, it’s important to thoroughly understand how to use a trading platform as it gives you all the essential tools that you need to do technical analysis and to take your trading to a new level.
There are some advantages to using online trading platforms, such as:
- A trading process that is fully automated and is broker independent
- Investors have direct access and control over their trading portfolio
- Access to advanced trading tools for performing technical analysis
- Ability for trading multiple markets and/or products (you can trade in BSE/NSE)
- Faster trade execution (crucial if you’re a trader)
- Real-time market data
- Accounts are easy to operate and manage
- No geographical limits (if you are in Dubai or New Zealand, you can invest in the Indian share market with online trading platforms)
It is important that you check the speed and quality of the trading software that you broker provides.
Login ID and password
Your online trading platform needs to be protected by a login id that you receive from your broker and a password of your choice. You should change the password frequently. There is some software that prompts you to change your password every 15 days. Additionally, there is an extra security feature to ‘lock’ the trading software to one computer. With this feature, you’ll only be able to log in from one specific personal computer.
The market screen
For a newcomer to online trading, the market screen may seem like a jungle of all different numbers. But, it is nothing to be confused about.
The market screen is the most essential window that will help you to trade. This window gives you a tabular representation of the current market position of selected shares. Each share makes up a row of data, containing the scrip name, last traded quantity, its last traded price, best offer rate, best bid rate, total volume, etc. The Market Watch window is extremely configurable, meaning that you can decide which columns you want to view and which you don’t want to view, whether you require column or row separators, adjust the size of all rows or each column, the color for displaying data, etc. There is a range of options that are available on a pop-up menu that is accessible by right clicking on the Market Watch window. The windows will all be updated dynamically in real time, and you don’t need to ‘pull’ or refresh any information. It’s all updated in real time. In fact, you are in a live market.
It takes just one day to understand the market screen. The Market Watch window is the main controlling window from where you can launch all your trading actions. You can buy or sell a share just by clicking on the particular share on the market screen.
The trading screen should have indices that are shown on the screen in a convenient location.
It should display all popular Indices like Nifty and Sensex. The indices display should be capable of being customized to show the other indices which you are following. An investor needs to keep track of the market indices so that they can get an overall picture of what the market sentiment is and where it is standing.
With online trading, the reports comprise of Order Book, Trade Book, Margin, Net Positions, Exercise Book and Holdings. In any trading terminal, all of these reports get updated dynamically without you needing to refresh or pull the information. From the Reports window, you can ‘Modify’, ‘Square Off’, ‘Cancel’, or ‘Exercise’. The appropriate buttons will be enabled/disabled, all depending on which action is taken based on the row that is currently selected. You can save these reports either in a text or a CSV format.
Any good trading software will provide you with the following facilities to chart:
- Streaming of intraday tick-by-tick charts and historical data
- Ability to simultaneously chart multiple companies and to open unlimited charts
- Unique draw tools, including Fibonacci tools and trend line customization
- Different options of chart types, such as Line, Bar and Candlestick
- Many analysis options, including indicators like RSI, MACD, Williams % R, etc. for volume and price panels. There are, at least, 14 useful indicators for traders
- Ability to save charts as JPEG file
The market analyser feature provides top traded, top gainers and top losers with the percentage change, value and total quantity. Also, it provides the list of shares that have reached their 52 week high or 52 week low. The market analyser helps with analysing all the quotes and extracts the quotes where quantity that is traded exceeds a given figure, or a transaction value exceeds a given value. This feature helps to you identify which are the large trades and it can give you vital indications and clues as to where or in which scrip there is an activity that’s currently happening.
How To Choose The Best Online Trading Platform
For beginners, selecting an online trading platform can be confusing. A trading platform is a tool one uses for communicating trade data between trader and broker. There are many different options available, and you should determine which platform is best for you depending on your needs. These tips will help you refine your choices and assist you in making the best possible decision:
While some online trading platforms offer traders free usage of their services, others have a one-off sign-up fee or a monthly fee. Depending on your budget or on your needs, you will want to keep a lookout for any fees that you may incur.
You will want to be sure that your personal information is secure while you are trading. Each country has its regulatory body, such as the Financial Conduct Authority (FCA) in the UK. You will want to make sure and check the credibility that the broker and online trading platform you choose is properly regulated so that all your information is secured.
Online trading often happens up to 24 hours a day; you will want to be sure that you can reach the customer service departments if the need should arise. Checking out the different customer support options that each trading platform offers and the wait time to receive help, could be valuable and save you much stress in the long run.
Deposits and Withdrawals
Each online trading platform offers different methods for making deposits and withdrawals. Some methods can be more time consuming than others. Try to check out the various options for deposits and withdrawals and the time each one takes can help prevent any frustrations when you are using the platform.
There are different platform options such as desktop, and mobile. Depending on if you are doing most of your trading at home or on the go, you will want to find the trading platform best suits your needs.
When selecting a brokerage, most people have stocks in mind. However, there are also many investment alternatives that are not offered by every company. These include Forex (FX), CFDs, ETFs, futures, options as well as gold/silver certificates.
Some online trading platforms come with different features, such as advanced charting tools, live updates, and risk management tools. Having extra features can help make your trading experience the best it can be.