When evaluating which broker to trade with, it is important to give high consideration to the choice of trading platforms offered by the broker. A trading platform is your window to the markets – and it’s speed, reliability, availability, and feature set are all critical factors to consider.
Retail trading platforms have evolved considerably over the past dozen years. Today’s advanced trading platforms offer a plethora of tools and services, real-time indicators and analytics, and are generally available across a range of desktop and mobile platforms. The better ones are designed to allow you to trade and manage your portfolio from anywhere. Better yet, most of these advanced options are usually cheap if not free!
In today’s fast moving markets, high throughput and low latency is of essence. When market making news hit the newswires, prices move within milliseconds. Your broker’s platform offering has to be able to keep up with the speed requirements even during peak loads. Ask your broker how they connect to the exchanges, whether they are co-located at a Tier3 or Tier4 datacenter, and whether they have a choice of internet service provider (ISP)’s to choose from so that you get the best possible internet connectivity. Some trading platform technologies are faster at processing data than others, and the more recently developed ones will usually be faster than the older ones. Before finalizing on a broker, it is important that you actually login and test the speed of the platform. Although we like to think of the internet as being ubiquitous and democratic, the sad truth is that some connections are better than others due to factors outside of your control. It is best to actual login and test out connectivity at various points of the day to ensure there are no surprises later.
This point is critical. There is nothing worst than realizing your broker’s systems are down or unavailable right when you wish to place your trade! Imagine being in a profit making position when some critical news hits in your favor. You wish to close out your position, but due to increased system and infrastructure load, you get an error message saying “System unavailable for trading” upon login. By the time you are actually able to login, it could be that your profit making position turns into a loss! Such problems occur when a broker’s IT department does inadequate infrastructure load planning and have inadequate backup and redundancy systems in place. A broker’s network and server infrastructure is very demanding, and many broker’s simply do not budget and account for peak loads. Since it’s often times difficult to obtain the details of a broker’s server and network infrastructure, it is best to ask around and/or test yourself are various times of the day. You should also directly ask your broker whether they have redundant systems in place. Do they have backup servers and network infrastructure in dual primary mode in case of hardware failure? In case of line failure, in how long can you expect service to be back up online? Are there offline options to place trades if the infrastructure were to go down? (Call & Trade for example). It is important to consider all these points rather than learning the hard way during a time of crisis.
The internet is so ubiquitous and integrated into our lives that we are used to always-on, always-available. This should be no different with your trading platform. Todays’ modern trading platforms come in a variety of offerings. A good broker should have all necessary variants to suit your unique trading needs:
The world’s leading operating system. There is a high probability your broker will have a Windows variant of their trading platform. It needs to come in the version of Windows you use (XP, Windows7, Windows8). Make sure that the install is not too “thick” (resource intensive), and that the build is not buggy!
Apple’s desktop operating system. Although it is relatively less popular than Windows (especially in India), if you use Apple, it is important that your broker offers a variant of OS X for your trading needs. Make sure your broker’s platform is compatible with your version of OS X (Leopard, Snow Leopard, Lion, Mountain Lion), and that they continually update it with the same frequency as their Windows offerings.
India’s leading smartphone platform. If you are a savvy mobile user, there is a very good chance your smartphone runs Android. If so, mobile trading is probably something you are into. Make sure your broker’s Android OS offering is smart and snappy – it should do the basics really well: order placing (limit, market, stop), portfolio management (order book, position book), basic research and even basic charting. The platform should work on a 2G or 3G connection and should not require incessant re-logins which could ruin a good trading opportunity.
Like the Android above, but with the Apple iOS variant in case you are an Apple iPhone/iPad user.
Trading Platforms come in all shapes and sizes. It is important to survey a trading platform’s features in detail and make sure it has what you need. Here are things that may be of interest and that you should look out for:
- Charts: This is a must if you trade based on technicals. Make sure you have basic and advanced charts available, with a wide swathe of indicators at your disposal. Make sure the system supports multiple time frames.
- Keyboard Shortcuts: if you come from the world of operator terminals (Neat and Bolt!), keyboard shortcuts will be a requirement. Make sure the shortcuts are fully customizable and that you can create your own if need be.
- Customizable Interface: a default layout is usually not best layout for every trader’s needs. Ensure the interface is fully customizable so that the colors, panes, fonts, layouts are all editable to maximize your efficiency.
- Positon/Order/TradeBook: make sure the basic windows are all as per your requirements and that there is no problem in accessing trade and position level information with ease. This is very important!
A trading platform needs to be thoughtfully considered prior to fully going live with a broker. At RKSV, we spend considerable efforts to ensure that our trading platform offerings are some of the best in the market. The best way to ensure a platform suits your needs is to try it out. So before you settle down with a potential broker, make sure you fire up their trading platform and give it a try!