Trading Software
Almost every online FOREX broker will have a software package for their clients to make transactions and get information about market prices. Due to the relative maturity of online trading there is a consensus among FOREX brokers about what their clients will need in terms of software tools. There are two main classes of FOREX software to be considered – web based and client based.
All FOREX software needs to provide up-to-the-second market information. The fast pace of the FOREX demands real-time data for making decisions about when to enter and exit the market. FOREX dealers claim their software performs well with a minimum of delay, but in fact there could be a number of factors delaying data transmission.
Internet connection speed and distance from the broker's servers are two main factors that can slow down data transmission. FOREX traders should have a reasonably modern computer with a high speed Internet connection to take full advantage of the FOREX software offered by the broker. It may also pay to choose a broker in the same area as you live. Traders in Bangkok who deal with brokers in Ohio may expect delays – especially during volatile market conditions.
Web Based or Client Based?
Web based software is hosted on the broker's website – you don't have to install any software on your computer. Client based software will require you to download and install the software package used by your broker. Which is better? More and more brokers are offering web based client software for reasons of convenience, safety and reliability. Web based software allows you to log on to your account from any computer – you can make trades from any location that has an Internet connection. Client based software, on the other hand, restricts you to making trades from just one computer.
In addition to the convenience, web based software offers greater security. Data is secured with high-strength encryption making it impossible for outside parties access during transmission. Client based software is also secured during transmission but there are more possibilities for data loss from the trader's own computer. Viruses and hackers may be able to access valuable financial data stored in a home or office computer.
Features
FOREX software needs to access real-time quotes and offer a means to enter and exit the market. Even most basic packages offer these functions. Current quotes can be seen for most currency pairs and the software allows you to buy or sell at market prices or enter and exit the market using stops or limits. Ideally, trading software should have integrated charting functions with a variety of viewing functions.
Basic software packages should be offered free of charge, but many brokers will also have more advanced packages available for a monthly fee. Some features you could expect to see in advanced software include the ability to trade directly from the chart and full analytical functions.
Technology
The backbone of FOREX software is a series of data servers that allow you to connect to your broker's web site and make transactions. Servers operated by the FOREX broker need to be reliable and secure for maintaining data integrity and assuring accurate transaction processing. Servers are subject to power outages and natural disasters, so to ensure maximum uptime, the broker should operate at least two sets of servers in separate locations. Brokers should also offer regular data backups to guarantee the integrity of their customer's financial data in case of server failure.
