Online trading can be defined as the act of placing buy or sell orders of currencies or financial securities through the use of proprietary trading platforms of brokerage companies. The introduction of high-performance computers and high-speed internet connections encouraged the use of online trading in the market. The popularity of online trading resulted in an increase in the number of discount brokerages since the reduced expenses can be passed on as savings for the customers. To facilitate online trading, a number of tools are available for a successful online trade.
Automated Trading Systems
Automated trading systems are tools facilitating automatic trading transactions through a computer. Traders are able to set up specific rules on trade entries and trade exits. Once these rules are programmed, the computer will automatically execute the transactions. These trade entries and exit rules can range from very simple conditions, like a moving average crossover, to complex conditions that may require a clear understanding of the trading platform used by the customer. These systems generally use software connected to a direct access broker. There are a number of advantages of using automated trading systems. These advantages include better consistency, a reduction of emotions while trading and an enhancement of trading speed. On the other hand, these systems also have some disadvantages, including potential mechanical failures, need for constant monitoring and over-optimization.
Financial Analysis Tool
A financial analysis tool facilitates the analysis of individual securities as well as the monitoring of news and markets. Some traders provide platforms that cover numerous asset classes, including equities, currencies, commodities, fixed income, and mutual funds, among others. These tools can look into financial fundamentals and descriptive information as well as analyze the trading patterns and price history of securities. There also options for advanced technical analysis, like charting capabilities.
Portfolio Management Tools
Portfolio management tools facilitate the easy monitoring of the investments of customers. These tools can be accessed nearly anywhere at any time. While some tools can be easily synchronized with existing accounts, there are others that require users to enter information manually into their holdings. Once they are synced, these portfolio management tools provide users the latest information on their investments. Some of these portfolio management tools provide visual or audio triggers for different price conditions to allow customers to monitor developments without having to check the market continually through the screen.
When the interface on an online trading platform is customizable, it allows users to change the layout and appearance of the platform. It essentially makes the platform easier to use for the customers basing on their experience and preference. Some of these platforms are user-friendly and allow customers to use pre-configured templates that’ll enable them to use the platform as soon as possible.
These online trading tools facilitate online trading for the customers of online traders. Some of the traders offering these tools include CMC Markets, Bloomberg and Barchart Trader. Using these tools can facilitate successful online trading for anyone interested in online trading.