Forex Trading Software

Tips for Choosing Wisely: Which Forex Trading Software is Right for You?
Hundreds, if not thousands of Forex brokers offer their services online; with so many options, choosing the right broker is no less difficult than creating a successful strategy. The average trader is unlikely to have time to check-out all of the various features of the Forex software packages offered by those brokers; and even if they do have the time, it is impossible to fully evaluate and appreciate the complex features of a good Forex trading platform with a glancing examination.
Forex trading software intended for the personal Forex trader comprises a rapidly growing segment of the Forex industry. A number of different types of Forex trading software have found their way into widespread usage among personal Forex traders.

Common Forex trading software types include:

Trading Platforms - allow for the manual management and execution of trades.

Technical Analysis Software - provide charts of historical exchange rates and technical indicators.

Trading Signal Generators - provide recommended levels at which Forex traders can initiate and close out positions; and

Automated Forex Trading Software or Forex Robots - execute trades automatically based on a pre-programmed trading algorithm.

So how do you go about finding the best Forex trading software? The first step is to download a few representative programs to try within their return period to see what works best for trader-specific needs. If the software does not suit the needed purposes well, then the trader can request a refund. Another way to do some advance research on Forex trading software involves reading online product reviews and discussion forum postings from users of the software.

Forex Trading Platforms

In general, Forex trading platforms offer users the ability to manually enter and execute Forex trades with an online Forex broker. They generally require a reliable Internet connection to operate efficiently, and if they require a software download, they usually run on Windows-based computers.
More advanced trading platform features might include: the ability to manage multiple trading accounts, charting functionality, and algorithmic trading support with back-testing capabilities.

Forex Charting Software

Forex charting software can encompass a variety of computer programs that facilitate the review of foreign exchange rates using technical analysis methods. The more basic programs of this type will typically allow a trader to plot the progress of exchange rates over time for several different time periods, to overlay some of the more popular technical indicators like RSIs and Moving Averages, and to draw trend lines.

More sophisticated charting software generally offers some support for traders using Elliot Wave Theory to analyze exchange rate movements that would include calculating Fibonacci retracement and projection levels. Additional advanced Forex charting software features might include: more advanced line-drawing options that include channels and Gann lines, computing and displaying Pivot Points, and a wider range of increasingly-complex technical indicators.

An even higher level of charting software often includes some form of pattern-matching algorithm that identifies forming chart patterns, along with their trigger points and measured move objectives. Other software based on Elliott Wave Theory might count wave progressions.

Automated or Algorithmic Trading Software

Automated trading software operates according to a pre-defined trade plan or algorithm without the need for manual intervention. They also sometimes go by the name of Expert Advisors or EAs and often run as such on the popular MetaTrader4 trading platform. The so-called Forex trading robots available on the commercial Forex market generally fall into this category, as do personalized trade plans that traders program or have programmed.

Often, this automation helps traders by taking the emotional and discretionary component out of trading a particular system; once set up, this software can also help a trader save considerable time. Furthermore, these systems can sometimes offer assistance to beginning traders who wish to learn how to trade like experts.

Forex Trading Robots

Forex trading robots make up one of the main types of automated trading software currently available to Forex traders. Most of them install quickly and run as Expert Advisors.

One of the things to watch for with Forex trading robots is that their vendors often provide profitability numbers based on back-tested trading results over periods for which the robots are optimized to perform well. This means that future trading results might differ substantially, and usually do. Therefore it pays to test these robots in a demo account before setting them to trade live funds. Also, seek out unbiased Internet reviews and check online discussion forums for user comments about any Forex trading robot software you might consider buying.

Forex Signal Generating Software

Forex signal generating software or Forex signal generators generally do not trade automatically for a user. Instead, they provide levels at which a trader can enter the market and usually have a means by which to alert the trader to such opportunities.
Such signal generators also usually provide suggested stop-loss and take-profit levels so that the trader can appropriately manage any losses or gains on any positions they take based on the signals generated by the software.

Downloads

Just about all Forex trading software intended for use by personal Forex traders will provide a download option. Sometimes a trader can purchase CDs containing the software or have it sent via an e-mail attachment, but most often a download link will be provided once the trader pays for the software or gives the required information necessary to obtain the permit needed to download the software.

Also, most Forex trading software is written for personal computers running a relatively recent version of Windows. Traders should keep that in mind when looking for Forex trading software, and make sure they have a compatible operating system or emulator available.

If a trader does not have the ability to run Windows-based software, he can check with the software product vendor to make sure his operating system is supported and how.

Software Updates

Many of the higher-end Forex trading software products will provide free updates to the software for life or for a specified time. These updates can be important because they might correct existing problems or provide new and useful functionality.

Having software updates included in the cost of software proves to be a valuable feature. Most software updates are either installed automatically by the software or require a new version of the software to be downloaded from the Internet and manually installed onto the computer.

Online or Web-Based Platforms

Online or Web-based trading platforms remove the download time factor and possible installation frustration out of running Forex trading software.
The main advantage of this type of trading platform is that it can generally be used anywhere that there is an Internet connection and compatible Web browser. They also permits use by operating systems other than Windows, which can really help Apple Mac OS and Linux users get started trading Forex.

Client-Side Platforms

In general, client-side platforms consist of Forex trading platform products that require that the software be downloaded onto the trader's personal computer or onto a remote server that the trader then pays a fee to use and access. This term is often used to contrast such downloaded platform installations with Web-based Forex trading platforms.

Data Security

Make sure that all Forex trading software, especially if Web-based, and the Forex broker use appropriate data security measures to protect the traders data. These might include operating duplicate data farms and using SSL-encryption technology to protect any personal data entered into online forms.

Real Time Exchange Rates

The best Forex trading software displays real-time exchange rates that change along with the market as it ticks up and down over time. Naturally, the best type of real time exchange rate is one a trader can deal on. This way, when a trader goes to enter a trade or an order using the Forex trading platform software, you don’t get a nasty surprised about where the market really is trading.

Remote Servers

Remote servers provide a useful service for those running downloaded or client-side Forex trading platforms. This is especially the case when they require around-the-clock market-monitoring and execution capabilities, which can be essential for running an automated Forex robot or trading algorithm profitably.
Most remote servers charge a fee for both hosting the Forex trading software in its storage space and for allowing the software to use its always-on Internet connection to execute trades through. Such services usually offer a very high degree of reliability in terms of providing 24/7 Internet access to software installed on their servers.

Technical Indicators

Many forex trading platforms provide a built-in charting capability with the most common technical indicators. One or more of these indicators are used by technical analysts when determining how to trade the forex market, and also in generating objective trading signals. If you need to use a particular technical indicator for your trading strategy, make sure that any platform under consideration includes this indicator.

Instructional Videos

Forex trading software packages increasingly come with helpful instructional videos that can be downloaded or played using your Internet browser. These videos usually contain screen shots of the software being used along with any audio or text necessary to describe how the software should be used and for what purposes.

News Feeds

Forex trading platforms often provide access to high-quality news feeds from professional forex market information sources that might include Reuters, Associated Press, Bloomberg or Telerate. Check to see that the news your trading platform provides is suitable for your needs, especially if you have a strong interest in trading based on fundamental factors.