Platform trading is the technical term for trading investments using online software prepared by a private company or available to all Internet users through an open source license. The user logs onto a web interface and makes financial transactions using the trading platform.
Foreign exchange, or forex, is one type of trading performed using trading platform software. The investor makes trades between currencies of different countries for the purpose of making a short-term financial gain.
In the United States, investors can also go online to trade stocks in the domestic market, including shares in companies traded on the New York Stock Exchange (NYSE). Providers like Scottrade and TD AmeriTrade provide individuals and groups with accounts, in accord with federal regulations.
Automated vs. Manual
The online trading platform, whether it is for stocks, bonds, futures, or currency, is available in two main types of online software: a manual trading application in which the user makes trades by one transaction or a group of transactions each time; and an automated trading application in which trades are made according to preferences specified in advance by the user.
Interface With Real-Time Information
Investors use real-time information to make trading decisions. When a trading platform is interfaced with the latest market updates, investors rely on an automated trading system (or robot) for making gains. Some platforms even provide protection against reversals -- for example, an alert that one company's stock is projected to jump in value on the NYSE at noon could trigger the robot to buy shares for the investor.
Platform trading also involves using the online platform provider and other sources for advice on strategies for making a profit in the trading environment. For example, the investor can use strategies used by other traders on the same platform or develop his or her own strategy -- although trading websites publish a disclaimer that strategies discussed on the site are not to be interpreted by consumers as trading advice or promises of future returns.
- Image by Flickr.com, courtesy of gilles chiroleu