Selecting the correct online trading platform is critical for those who hope to enjoy success within the world of electronic trading. In fact, it has been shown that a significant portion of failed portfolios are the direct results of embracing the wrong platform. One can follow the most prudent strategies in the world and still fail to appreciate how pivotal it is so select only the most advanced software. To prevent such mistakes, it is always wise to take a look at a handful of the most common pitfalls to avoid.
Overly Complicated Systems
One of the most prevalent hazards involves platforms which are overly complicated. While no system should represent the “bare bones” of investing, it is very important to appreciate the benefits of an uncluttered presentation. Any portal should be easy to navigate and executing a trade must be accomplished on a point-and-click basis. In the same respect, key metrics such as chart movements, prices and one’s current holdings must be absolutely clear. There is no need to make the markets any more complex than they already are.
A Lack of Diversity
One key to success involves the ability to access numerous underlying assets. Some of these include commodities, indices, currency pairs and contracts for difference. The premise behind this observation is that more options are associated with a greater number of choices when opening and closing positions. Additionally, multiple holdings are able to nullify (to a certain extent) the volatility often present within individual trades.
Substantial Trading Lag Times
Many individuals will prefer to utilise online trading platforms for day trading purposes. As such positions tend to be rather short term by their nature, the significance of substantial lag times becomes apparent. Although some instances are the result of a poor Internet connection, older platforms tend to be quite hefty in terms of the memory that is required. Even some streaming versions can be frustratingly slow. The best way to separate the good from the bad is to open up a demonstration account and observe the times required to execute a trade (particularly during hours when there may be high Internet traffic).
Poor Customer Support
Even the most reputable systems such as CMC Markets could have technical issues from time to time. This is only natural with these revolutionary software packages. The trader must always be able to speak with a customer support representative; 24 hours a day if necessary. It is also wise to search for multiple points of contact such as a telephone number, a dedicated email address and even live chat widgets embedded within the trading platforms themselves. Sites which exhibit high levels of customer support are unsurprisingly those which tend to rank positively in terms of customer reviews.
These stumbling blocks are easy to avoid if they are identified before any real commitment takes place. As always, it is best to compare and contrast a few different portals in order to gain the clarity required to make an informed decision.