Forex software is the technological breakthrough which made Forex trading accessible to individual traders.
There are two primary forms of Forex trading software. The first is referred to as server side software. This is Internet based software that requires the user to log into his or her Forex trading account with a username and password. Once the user is logged on, trades can be monitored and executed.
The second form of Forex trading software is referred to as client side software. It installs directly on your home or work computer, allowing you to trigger trades and monitor trends directly. Both forms of Forex software enable you to access the market twenty-four hours a day.
That's all fine and dandy, but what does it really do?
Forex software gives the trader the key to unlocking real time Forex information. While this may not appear like a big deal at first glance, there's nothing more valuable to a trader. This is particularly true of the Forex market, which can be influenced by so many factors (political, economic, even weather conditions). Forex trading comes with a warning label for its volatility, and that's why real-time information is so important. It can dramatically reduce the trader's level of risk.
News changes fast, currencies fluctuate equally as fast. Having the advantage of executing an instant trade when changing conditions turn against you is invaluable.
But wait, there's more!
Forex trading software almost always comes with charting capabilities (if it does not, you'll want to keep looking until you find one that does). Charting (generally in the form of Japanese candlesticks, although you can also use tick charts, line charts, and bar charts) allows the trader to spot trend direction, price activity, and historical movements by using technical analysis indicators such as Bollinger Bands, Fibonacci Arcs, and Standard Error Bands. All very cool ways of analyzing the market and making smarter decisions.
But wait, there's more!
Security is always an issue on the Internet, and this is even truer for online traders. Safe financial transactions are always a major concern. A trader not only wants his trades to go through instantly, he wants the best security possible. Fortunately, most forex trading software programs use at least a single layer of 64-bit SSL encryption (most use additional layers), making it difficult for hackers to mess with the integrity and privacy or your data.
Finally, many Forex software programs come with a variety of services. The more you require the more expensive the software. As a novice, you may not be ready for the more sophisticated information that's made available. If you have the option of paying less for fewer services now and adding additional services as you become more proficient in your trading activities that might be your best bet. For the more advanced trader, generally there's no such thing as too much information.
And while I probably do not need to make this one last point, I'll do it anyway just to be on the safe side. Every trader is unique. Every trader has his or her own particular tastes. Therefore, since most (not all) Forex trading software allows you to use a demo version for a short period of time … take advantage of it. Make sure the software does what you want, in a manner that's compatible to way you prefer to trade