CFDs – Contracts for Difference
It is important to remember that Forex platforms cannot be used for physical currency purchases or the sale of currencies. They do not function as currency exchange offices. Access to currency pairs CFDs is the basis of Forex platforms’ activity for retail clients.
CFD is a contract to exchange rate differences. CFD refers to a particular type of agreement between two transaction parties. It is required that they reconcile the amount representing the difference in the position’s closing and opening prices.
Modern Forex platforms offer more than CFDs that are based on currency pairs. They also offer CFDs that are based on indices or raw materials. They also allow you to buy real stocks anywhere in the world or units of highly popular ETF funds. You can access all of this information from one platform.
What is a Trading Platform?
Let’s now explain what a trading platform is. A trading platform can be an online, mobile, or computer program that allows trading on the financial market wherever there is an internet connection.
A trading platform allows you to buy and sell financial instruments directly from the broker. Charts with the broker’s instruments are available on trading platforms. They are based upon real-time quotations.
Brokers often try to provide the best technology and functions to their traders due to the competitive nature of the industry. High quality brokers are easy to recognize as they follow the latest trends and ensure they don’t get outpaced by others. Brokers are committed to client satisfaction and strive for continuous improvement.
High-quality trading platforms will provide a variety of functionalities and tools for performing analysis. These tools include, but not be limited to:
- Ratios for technical analysis
- Drawing tools for graphs
- Up-to-date market information
- Access to statistics and analyses
Users are also often given advanced functionality, including the ability to create and test their own investment strategies or implement non-standard solutions.
The trading platform is an important tool for all investors, regardless of their level of experience. A trading platform allows traders to easily submit orders, execute transactions and analyse graphs. It also lets them manage their portfolios in an easy way.
How to Trade Forex
A trader must choose a broker when they decide to invest on CFD and Forex markets.
- Brokers offer trading accounts
- The broker also offers a trading platform
Finding the right platform for traders is crucial, especially for first-timers. New traders find it more difficult to choose the right platform than experienced traders who are familiar with all aspects of trading platforms.
Two types of trading platforms that brokers offer can be separated:
- Broker-created platforms, also known by the term “original platforms”,
- Third-party platforms, which are made available to brokers with a licence, are available to brokers. MetaTrader 4