Unlike the stock market, the Forex market is generally an unregulated market with no central location for trading. Traders use the services of a Forex broker to participate in the market. In the US, legitimate Forex brokers are registered with one of the various regulatory agencies. If you are new to Forex trading systems, you must be careful to seek a registered broker and avoid off-exchange currency dealers and the scams that have evolved around the Forex market. Legitimate brokers may be found online and your chosen Forex broker should provide an online platform for you to trade on. Online platforms provide Forex trading systems with less costs and better accuracy in the pricing of currency pairs than conventional trading systems.
Technological advances in computers and the Internet are responsible for create a market of online Forex trading opportunities. The Internet has provided for market knowledge to be distributed to the global Internet community. This information was traditionally limited to banks and other financial institutions. With the advances in online, real-time and near real-time information flows, you have access to market information in line with the banks and financial institutions. Even during periods of market volatility, online platforms are able to provide a consistent flow of quotes. However, many online platforms are disguised as Forex trading platforms when they are really frauds.
Some of the fraudulent online platforms that you should be careful to avoid, particularly if you are a new or inexperienced trader are fraudulent brokers, bookmakers and bucket shops. Fraudulent broker practices may include offering outrageous bid / ask spreads and requiring unreasonable contracts. They may promise profits and never deliver them or claim to be trading your money when, in reality, they have used the money for personal interests. They may also provide you with phony accounting statements that estimate profits that they never made or they may attempt to lure you with phony stories of successful business relationships using fake customer names. The onus is on you to invest time and resources in locating a reputable broker.
Bookmakers are platforms established to bet on treaties. While this type of betting is perfectly legitimate in some states, it is not to be confused with Forex trading systems. In many cases, bucket shops are fraudulent platforms designed to cheat you out of money. Although they will claim to engage Forex trading, they have no connection to Forex. Their fraudulent schemes usually involve you to invest in currency futures and options rather than the spot trading market that is Forex. Since the methods of futures and options trading provide for a broker to contractually engage in transactions over a period time, this scheme allows the frauds to collect more of your investment dollars for a longer period of time. The spot Forex market, on the other hand, is designed to provide simplicity and allow investors to enter and exit the market at will. There is no contractual obligation or lengthy time constraints.
Most online platforms are designed to run with Windows and most web browsers. In general, an online platform provides access to an order entry process and should have a method of displaying currently held positions, charts of monitored currency pairs and some itemized form of account data. You should also seek a platform that offers some method of backup and communication in the case of loss of access to the Internet.