Which online trading platform should I use?
Online trading has become a popular way to invest in the financial market. It allows traders to buy and sell securities, commodities, currencies and other financial products from the comfort of their own homes. With so many online trading platforms available, however, it can be quite a challenge to determine which one you should use.
In this blog post, we’ll discuss a few topics that are important when you are contemplating which platform best suits your needs. We’ll share an overview of the different types of platforms, explain why the platform you choose largely depends on what type of trading you want to do, and give examples of a few of the most popular trading platforms.
We will be looking at online trading platforms that can be suitable for both beginners and more experienced traders in this article. If you are a beginner, however, you may also want to read our article in which we talk about the best online trading platforms for beginners.
Different types of trading platforms for different needs
If you’ve started researching online trading platforms - or trading apps, or online brokers, as they are also called - you may have found that there are a lot of different types of platforms. Therefore, let’s first have a look at a few ways these platforms can be categorized.
Proprietary trading versus commercial trading
First of all, a distinction can be made between so-called proprietary trading platforms and commercial trading platforms. The first one is often used by professional traders at large financial institutions, such as banks, brokerage firms or insurance companies. Because these professional traders often deal with large sums of money, the functionalities of these proprietary platforms need to be top-notch. Often, they are custom-made and highly complex, so that they can address the needs of these financial institutions. Because of that, proprietary trading platforms tend to have a slow learning curve: it often takes a lot of time for beginner (professional) traders to learn how to use them.
Commercial trading platforms, on the other hand, are used by so-called retail investors: non-professional traders who usually invest smaller sums of (their own) money. Most retail platforms are very user-friendly: they are easy to use and the information is depicted in a way that’s easy to understand. For example, commercial trading platforms often show graphs with clear descriptions, so that the trader immediately knows what’s going on in the market and how the trader’s wallet is performing. Some of these platforms might not provide the insights more advanced, or professional traders need, however.
Wide range of product offerings versus specialized online trading platform
Another important distinction between trading apps is whether they offer access to a lot of different products or specialize in just one type of financial product. Here at Equity Flow for example, we offer traders access to forex, crypto, indices, metals, commodities, and shares. Tastyworks, on the other hand, is an online options trading platform: they have limited to no other investment options, but they are one of the best solutions for analyzing, monitoring and trading options.
Desktop versus web apps versus mobile apps
Our final distinction is whether the trading platform is a desktop, web-based or mobile platform. Desktop platforms are typically downloaded and installed on your computer and are therefore available in Windows and Mac versions. Web-based platforms are accessed through a web browser - you can use these on any device with an internet connection. Finally, mobile platforms are designed for use on smartphones and tablets and provide traders with the ability to trade on the go. Lately, most popular online platforms offer multiple versions, a web application as well as a mobile app, for example.
Examples of popular trading platforms
Let’s now have a look at some of the most popular trading platforms:
TD Ameritrade
TD Ameritrade is a great platform that gives you access to a wide range of financial products. It also has a great educational content library, which helps you to quickly understand what online trading is all about. On top of that, the technology they use for trading and analytics is very sophisticated, but at the same time intuitive and easy to use. Therefore, it is not surprising that TD Ameritrade is regarded worldwide as one of the best platforms - especially for beginner traders.
Interactive Brokers
Interactive Brokers combines superior order execution (completing a buy or sell on behalf of a client) with a large range of foreign and domestic products, low-margin interest rates and a highly customizable workstation, which makes it a very popular online broker among more advanced traders. A few small drawbacks: since it is so customizable and extensive, it can be difficult to learn if you are a beginner trader. Also, their pricing can be a bit confusing.
tastyworks
As discussed before, tastyworks is a great online broker for trading options. The platform is purely focused on delivering the best experience for anyone who wants to trade in options. Within the platform, you can find sophisticated tools to analyze and monitor options trades, as well as an outstanding option-specific content library to get all the information you need when you are stepping into the options market.
WebTrader
WebTrader is our web-based trading platform that gives you access to lots of different financial products, including forex, stocks, commodities, and cryptocurrencies. This is a platform that is easy to use for both beginners and more experienced traders: it is intuitive and provides you with a range of tools and features like real-time charts, technical analysis tools, and news feeds - all to help you understand what’s happening in the market and make informed decisions. Webtrader users can trade on the go, since the platform can be accessed from any device with an internet connection.