Desktop vs. Web-Based Futures Trading Platforms

Originally published at: https://optimusfutures.com/tradeblog/archives/desktop-vs-web-based-futures-trading-platforms/%20

This article on Desktop vs. Web-Based Futures Trading Platforms is the opinion of Optimus Futures.

Most futures traders would say the financial markets took a terminal leap in the early 1990’s when the Globex Trading System forever changed the way people participated in the markets. In just a few years, almost any trader with an internet connection was able to independently place trades, financial markets were accessible on a global scale, and trading hours were extended 24/5.

With this came a huge shift in trading culture. Trading pits began to dwindle before dying off, digital technology and speed became an increasingly competitive factor, and the entire decade saw the rise of the Do-It-Yourself (DIY) trader–with self-managed accounts replacing broker-assisted services, ETFs (in the securities space) replacing mutual funds, and algorithmic systems replacing human advisors.

It’s almost as if we reached the “end of history,” as Hegel once proclaimed, only to realize that radical changes are happening yet again. This time, traders, especially the younger generation who grew up as “digital natives”, demand another level of engagement which can be summed up in two words: mobility and flexibility .

Disrupting the Already-Disrupted – Desktop Software vs Software as a Service

Sure, trading software may have changed the way we interfaced with the markets. But it also transformed the way we interfaced with our own “potential” as traders. Perhaps it provided more speed, efficiency, and to a certain extent, more freedom. But it has its limitations, particularly in the realm of digital security, computing capacity, and most importantly, mobility.

Software as a Service, sometimes associated with web-based (or even, cloud-based) trading tech may offer better security, more flexibility, and greater computing efficiency (its bytes don’t slow down your computer processor in the same way that software does). But is it the best solution?

You may be wondering: “Should I stick with a desktop-based futures trading platform (software), or should I opt for browser-based execution?”. They both have their pros and cons, so it’s a matter of what you are willing to give up in order to get what you need. Here’s a quick comparison.

Trading Speed for Day Traders vs Scalpers

One attribute that is constantly in high demand for day traders and scalpers, yet one in which these very traders are often confused, is speed . In short, they perceive platform speed as one seamless process. Nothing can be further from the truth.

The speed of your chart data can often be separate from order routing speed. Yes, this means fast data in and slower data out. Or slower data in and faster data out (less likely).

So, when it comes to software vs web-based platform, what matters here are three things: your computer’s processing speed (if you use desktop software), your internet connection (applies to both desktop software and web-based), and your order routing speed (also applies to both). Co-location might even count, but it typically benefits traders who trade higher volume (at least a hundred contracts in one trade, and most professionals would even consider that low on the pro end, though high on the retail end).

But when it comes to the quality of execution strictly on the retail side of things, then some data and order routing feeds may be better than others. If you scalp or day trade, you are probably looking for low-latency execution, preferably one with co-location and, if you run automated processes, one which can be customized via API.

In short, you might need a feed that gives retail traders the same services offered to professional trading institutions . Do such services exist? Yes, but few and far between. Do your own research.

As for us, we feel confident enough with Rithmic’s order routing technology to power our Optimus Trader platform.

But ultimately, you are the best judge for the kind of speed and execution that best suits your trading. Try it out first and compare it with others.

The Advantages of Flexibility and Mobility

Now this is a space where retail traders might find themselves separated. Let’s suppose you trade from your desktop at home. Later in the day, you hear a financial report (i.e. the U.S.-China trade war just escalated) causing U.S. indices to plunge. You realize that this makes a potentially good shorting opportunity.

But you can’t place the trade, The problem is that you’re at work, or walking down the street during lunchtime catching Pokémon on your mobile phone, or in a board meeting utterly bored and pretending to be taking notes on your mobile pad while you’re really just playing Crossy Road. In each case–work desktop, mobile phone, or mobile pad–you’re missing out on that one important trade.

Flexibility and mobility is something that a desktop trading platform will not give you. Hence, a web-based platform might serve you better.

Trading on a Mac vs PC

Not long ago, most financial software was designed for a Windows-based operating system, hardly any were available for Macs. Although financial software has become increasingly available for Macs, there are still more futures trading platforms that are PC-based. This puts Mac owners at a disadvantage.

And now that mobile apps have become the norm, it appears as if financial companies might spend more time and effort on developing competitive apps rather than making their PC-based software compatible with Macs.

When it comes to web-based vs software-based trading platforms, this one incompatibility has been the primary reason why some traders opted to go “web” rather than desktop. If you do everything on a Mac, either at work or at home, then purchasing a PC solely to gain access to a trading platform can be a real pain in the rear. Thanks to the internet gods, you can now be extricated from your earthly hardware predicament.

Is Your Trading Platform an Open Door for Cybercriminals?

Every step in tech development comes with its own unique form of negativity. The invention of the train was also the invention of the train wreck. The invention of computer software was also the invention of the hacker. And the invention of digital financial software was also the invention of widespread data heists. In the larger scheme of things, cybersecurity solves today’s problems only to open up a new cyber-hacking front at a much higher level in the future. And a software-based system is just as vulnerable today as it always has been.

The difference between your own personal data security and that of a larger institution offering web-based security is that the institution likely has greater means to protect itself ( not always the case, however ). There was a time when people preferred Macs over PCs for the reason that Macs were harder to hack. These days, Macs also get hacked.

So if you are concerned about cybersecurity and protecting your data, then entrusting your data and trading activities to a larger financial institution that might have a better cybersecurity system might be the safer way to go (be sure to exercise your due diligence before trusting any company to backup your financial data).

Desktop-Based Errors vs Server Errors

If you’ve been trading long enough, you’ve likely come across one or both of these tech error scenarios: the first is that your computer crashes in the middle of a trade; the second, your FCM’s server goes down in the middle of a trading day.

These tech-related failures are bound to happen. It’s not a matter if but when they will happen. So, when it comes to deciding between a desktop and web platform, the solution is rather simple:

  • Desktop platforms are vulnerable to both a computer crash scenario and a server crash scenario.
  • Web-based platforms are vulnerable only to a server crash scenario.
  • Both desktop and web-based platforms are vulnerable to disruptions of your internet connection.

That was pretty simple, right? But here’s another thing to consider: desktop platforms take up memory and may slow down your computer, depending on your computer’s capacity. Web-based platforms don’t take up space on your computer, so if the platform has fast data and order routing speed, then you it might serve as an advantage, as long as your internet speed is decent.

Plus, updating your web-based platform may be easier to initiate, as you don’t have to download anything. Often, it gets updated immediately on the provider’s end.

The Biggest Differentiating Factors, Recapped

In a nutshell, here are the main differences.

Web-Based Platforms over Desktop

  • You don’t have to download or maintain software on your computer.
  • There is no software to take up space on your hard drive.
  • You can log into your trading platform from almost any computer that has access to the internet, making your trading more flexible and mobile.
  • You are not as vulnerable to computer crashes as long as you have another means to access a browser via internet connection.
  • If you own a Mac, you don’t have to worry about purchasing a PC to run your platform.
  • You can trade from your mobile phone or pad via browser if your platform doesn’t already have a dedicated app.
  • Your provider’s SSL security may be adequate to ensure the safety of your transactions and financial data.

Now let’s flip it around and see the advantages of trading via fixed desktop. Desktop over Web-Based Platforms

  • Trading on the go means you can trade more often–not necessarily a good thing as you are prone to making impulse trades which can hurt your trading strategy and account.
  • If your web-based provider does not have adequate cybersecurity, there’s nothing you can do to protect your personal financial data. The desktop might have been safer.
  • If your web-based provider runs a cloud-based system and for some reason or another shuts it down, there’s no guarantee as to what might happen with your data. This might not have happened if your data was being stored in your hard drive.
  • If your provider has an inefficient web-based platform, then your trading execution capacity will be compromised (typically, you would close your account and find another provider).

So, what might be better for your trading needs–a desktop or web-based platform?

The only way to answer that question is to give both a try.

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.