In general, when you start a new activity, it is always advisable to not spend too much money on professional equipment. If you start playing the guitar, a cheap one will do the job. Then, if you really enjoy it or you are good at it, you can upgrade to a more expensive one.
In trading, especially if you have just started, you are probably doing your analysis by charting and using technical analysis. In this kind of trading, the software does not play a big part. What plays a big part instead is trader’s intuition, experience and knowledge of the financial market and the platforms he uses, but it is not of primary importance.
You might be told the opposite; that in order to succeed, you really need some institutional-level platform like CQG. Now try to remember if the person who gave you this advice was trying to sell you anything…
When I first started trading stocks, I was using a ruler, a pen and piece of paper. I used to draw support and resistance, caveman style. I could do almost everything I am doing now in that way, especially when trading using only technical analysis. Of course, it is much slower. However, if I needed to focus on a single instrument, on a slow time frame, like the daily one, you’d be surprised to hear that paper and ruler could find a place in some sort of vintage trading.
What is truly necessary, if you have just started, is an honest, reliable broker—but that is a topic that needs its own article. Even if vintage stuff is very popular these days, I suggest you go for a free platform like MT4. It is supported by every broker, and for discretionary, technical analysis-based trading, it is good enough. Additionally, you will find thousands of forums where you can download indicators or get free support.
But if, one day, you want to jump in the algo trading world, MT4 should be dumped immediately. It is still popular because it is free, but a backtest done on MT4 got zero value. Your algo trading on MT4 will be the same as trading at random. If you wanted to spend a bit more, ProRealTime is very nice, has good support, and is very easy to use. It’s also web-based, so you can run it on every computer without installing anything. But again, for algo trading, it is terrible. Trading view, it is a new popular platform that is very powerful and, on average, is better than ProRealTime. It does have some social trading feature, which is totally useless.
At this stage, if you get a better platform, it won’t add much to your trade.
You might buy something very expensive like CQG, but as long you are a discretionary trader, it won’t give you more opportunity to make money.
The main problem you might have when using this platform is data. If you are using CFD or forex, then you need to make sure that the data in your platform are the same as the one you are trading in your broker.
If you are trading regulated markets, you won’t face any problems, unless you are using data that are not meant to be used for analysis, like interactive broker data. Even in this case, loss of accuracy is relevant only on a very small time frame.
Beginners might feel insecure and think that an expensive platform might compensate for their lack of experience—just as a soldier might feel safer with a bigger machine gun.
Trade Station and multi-chart are very nice platforms that are not too expensive, but they are more oriented to the trading system world. The only instance where a good platform is absolutely necessary is when the trader, together with technical analysis, wanted to analyze the order flow. He will need market delta or CQG, and such platforms are expensive and complex, costing around $5000 USD a year.
Having said that, most of the time, a cheap platform is enough. The only expense has to be for the data if not directly provided from your broker. I consider IQ Feed data to be very good quality.
If you trade forex and CFD, you must use your broker data because every broker has different prices. The smaller the time frame, the bigger the difference.
If you want to know more please check out our algo trading programme