| | Almost every online FOREX broker has a software
package for their clients to make transactions and get information about market
prices. Due to the relative maturity of online trading there is a consensus
among FOREX brokers about what clients need in terms of software tools. There
are two main classes of FOREX software – web based and client based.
All FOREX software needs to provide up-to-the-second market information. The
fast moving pace of the FOREX demands real-time data delivery for making
decisions about when to enter and exit the market. FOREX dealers claim their
software performs well with a minimum of delay, but in fact there can be a
number of factors that could delay data transmission.
Internet connection speed and distance from the broker's servers are the two
main factors that can slow down data transmission. FOREX traders should have a
reasonably modern computer and a high speed Internet connection to take full
advantage of the FOREX software offered by their broker. It may also pay to
choose a broker in the same area as you live. Traders in Bangkok who deal with
brokers in Ohio may experience delays – especially during volatile market
conditions.
Web Based or Client Based?
Web based software is on the broker's website – you don't have to install any
software on your computer. Client based software requires you to download and
install the software package used by your broker. Which is better? More and
more brokers are offering web based client software for reasons of convenience,
safety and reliability. Web based software allows you to log on to your account
from any computer – you can make trades from any location that has an Internet
connection. Client based software, on the other hand, restricts you to making
trades from just one computer.
Besides the convenience, web based software offers greater security. Data is
secured with high-strength encryption making it impossible for outside parties
to access during transmission. Client based software is also secured during
transmission but there are more possibilities for data loss from the trader's
computer. Viruses and hackers may be able to access valuable financial data
stored in a home or office computer.
Features
FOREX software needs to access real-time quotes and offer a means to enter and
exit the market. Even the most basic packages offer these functions. Current
quotes can be seen for most currency pairs and the software allows you to buy or
sell at market prices or enter and exit the market using stops or limits. Ideally, trading software should have integrated charting functions with a
variety of viewing functions.
Basic software packages should be offered free of charge, but many brokers also
have more advanced packages available for a monthly fee. Some of the features
you could expect to see in advanced software include the ability to trade
directly from the chart and full analytical functions.
Technology
The backbone of FOREX software is a series of data servers that allow you to
connect to your broker's web site and make transactions. Servers operated by
the FOREX broker need to be reliable and secure for maintaining data integrity
and assuring accurate transaction processing. Servers are subject to power
outages and natural disasters, so to ensure maximum uptime, the broker should
operate at least two sets of servers in separate locations. Brokers should also
offer regular data backups to guarantee the integrity of their customer's
financial data in case of server failure.
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