Choosing Foreign Exchange Software to Trade on the Forex Market By Tracy Austin

Getting started in forex or currency trading requires choosing a foreign exchange software platform. Things can change so fast with the FX markets that you need to be able to execute your trades as rapidly as possible. And these days, everything is done via the Internet, so calling your broker by phone has become obsolete and inefficient.

To run the software you will use to trade the FX, you need a newer computer. Three to five years old at the oldest. A PC is best but you could use a Windows emulator if you have a Macintosh. Keep in mind that if you have a new computer but have added numerous programs and data, this can cause your system to run slower and cause delays in your trading.

Having a broadband connection is required as dial-up is simply too slow for foreign exchange trading. The time delays will make FX trading frustrating and nearly impossible to do successfully. You risk missing trades and having prices change before your trade is ever received.

There are a few things to consider when you are choosing a software package. First understand the software is provided by your broker. This is how you will communicate with your account, and enter the trades you want to execute. You will be able to set-up a free demo account and charts to you can "paper trade" for awhile with digital dollars before you invest your own money. If the free trial isn't an option, choose another broker unless you know exactly what you are doing.

Your Place or Theirs?

You will usually have the option of downloading the software platform to your computer, or interfacing with the system via the Internet. When using the web based hosting, you access and control your account via your brokers hosting platform. If you install it on your own PC, you will run it from your own Internet connection.

This is an important decision since if you choose to set-up a stop-loss for instance, and you or someone else in your household turns off your computer, the trade will never be triggered, leaving you open to possible serious financial losses.

You might consider having a separate computer dedicated to your forex trading activities. This way you can leave it on 24/7 without having to worry as much about missed trades. You will still be vulnerable in the case of a power outage or other unforeseen occurrence that could limit your ability to access your account. You can call in to the brokerage in an emergency, of course.

One last consideration that deserves a mention is hardware failure or the potential for viruses that could put your system out of commission. No pun intended.

There are numerous benefits to having your broker host your software, at least as you are starting out. Once you have the hang of what you are doing, part of the fun of trading forex is having two or more monitors and software programs running in-house, and having full control of all aspects of your trading.