Originally published at: https://optimusfutures.com/tradeblog/archives/compare-futures-trading-platforms/%20
This article on Futures Trading Platforms is the opinion of Optimus Futures
Why would you want to switch from one futures trading platform to another? Typically, for two reasons: Something about your current platform is not working well or doesn’t match your trading style; or perhaps you are looking for some new technologies or functionalities to upgrade your capabilities and performance.
If you’ve ever had to make such a switch, you’ve probably learned that there can be significant trade-offs. You may gain something with the new platform but always at the expense of something lost with the older one. If what you gain is of more value to you than what you lost, then it’s a winning situation. If not, then you switch back.
But is there be an easier way to compare both platforms’ pros and cons? To some extent, yes there is. We’ve come up with a list of things to consider that might be helpful to you. Feel free to add your own criteria or question to this list. For now, the following should get you started.
1 – Does your trading platform account for changing technologies that might be useful to you?
Most platforms come with a plethora of indicators/oscillators and drawing tools. If you’re technical approach falls within a more traditional context, then there might not be any reason to make a switch.
But if you require technology geared towards more specialized approaches–such as order flow trading, news trading, spread trading, etc.–or if you need specialized indicators and/or futures trading software–e.g. 1- to 10-year bars or candlesticks, or predictive price trend projection among others–then a futures trading platform change might be something to consider.
2 – Is your platform accessible to multiple FCM’s, or is it broker-exclusive?
Broker-exclusive platforms may seem more common to the world of securities trading rather than futures trading. For instance, TD Ameritrade’s TOS platform has very competitive functionalities, particularly with regards to options trading and analytics. But you can only get it at TD Ameritrade.
The problem with broker-exclusive platforms is twofold: you may be stuck paying steep fees for platform usage, or you may be stuck with non-competitive broker commissions. It’s not surprising that futures brokers spend a lot of time, money, and R&D developing and differentiating their proprietary platforms. Every company has a “monopoly” over their own proprietary technologies. But if these fees are eating significantly into your returns, then it might not be the right platform for you, regardless of its functionalities. In the end, it’s how much you take home that matters.
3 – Do you know that you have a choice of a wide variety of platforms with the right brokerage?
The benefit of working with a brokerage that offers multiple platforms is that you might be able to find the one that works best for you, given that you have a wide enough selection to try different ones. In a sense, this can help you progress as a trader, perhaps even grow your skills over time, allowing you to develop your own trading style based on wider availability of platform functionalities.
4 – Can your platform connect with multiple data and order routing feeds(e.g. RIthmic, CQG, etc.) or does your platform work exclusively with just one feed?
Not all data feeds are equal. The same goes with order-routing feeds. Some are slower/faster than others, some may be hosted on more reliable servers, and some work with multiple platforms while others do not. You know you have a bad feed when your data seems inconsistent, or the speed in which prices come in and orders go out to seem glitchy or too slow.
If your platform works with only one data feed, and if that feed is consistent and reliable, then there shouldn’t be a problem. But if your feed is problematic, then bear in mind that your platform provider has made a wager that their platform is as good as their feed. And if their feed is no good, then by virtue of the connection, neither is their platform.
5 – Can your platform connect to multiple exchanges worldwide?
The U.S. futures exchanges has such a wide listing of products that most traders might not need anything beyond it. But perhaps you have a reason to trade the Mini DAX, or Brent Oil futures. Maybe your trading passion will bring you to the world of Mini Nikkei futures or FGBL Bund futures. If that’s your thing, and it might be for some, then you need to trade on one of many international futures exchanges.
You may even need to cross-margin your accounts, something that most platforms cannot do (many of our FCMs offer these services). But if you need to jump quickly from day trading the e-mini Dow to placing a swing trade on ASX futures or HKFE exchange, then you might have to explore platforms that offer access to international Futures and Commodity exchnages.
6 – Are you receiving adequate platform support from your broker?
Sadly, many brokerages do not offer adequate tech support. Even large institutions can’t seem to pull it off. Why is that, you ask? Small ma and pa brokerages might not be able to afford hiring tech support for their clients. Uber-sized brokerages are likely concerned with larger investors, particularly those who pay for full-service accounts.
As a retail trader, one who takes the craft of trading as seriously as the technologies used to make it happen, you may need good one-on-one tech support from someone who knows your platform well. If you need tech support and can’t get it, then perhaps you need to find a brokerage who can provide you with the right futures trading platform plus support.
7 – Are your orders going directly to the exchange or being re-routed?
There’s a difference in latency between orders being routed directly to the exchange versus one that is left sitting on a broker’s server prior to going to the exchange. Direct is faster, plain and simple. If your trading approach relies on speed or entails large volume, then any process that can compromise your place in the exchange’s order queue can potentially hurt your trading performance.
Maybe you need a new platform, a new feed, or if none of those are available, a new futures broker.
8 – Can your platform also go mobile?
In today’s business world, many employees are enjoying a mobility that didn’t exist a decade ago. That’s because now, we have the “cloud” and the apps that go with it. Databases now follow you virtually anywhere you go (with an internet connection) rather than you being geographically tethered to it.
So what if you need to place trades on the go? What if you’re working at multiple geographic locations, constantly moving from one place to another, or having to attend meetings away from your desktop computer? Got an iPad, or a mobile phone? Hopefully, your platform has an app or is at least accessible via a web-based platform and not stuck to your desktop. If it is, wouldn’t it then be considered something of a dinosaur by today’s digital standards?
9 – Can your platform support day trading margins in both Individual and IRA accounts?
For better or for worse, today’s Do-It-Yourself (DIY) trader wants control over his or her accounts. In the equities world, this DIY mentality has contributed to the capital inflows toward exchange-traded funds (ETFs) and outflows from mutual funds. Similarly, DIY traders may not want to rely on fund managers for certain accounts that traditionally have been their domain, such as IRA accounts.
10 – Is your platform selection based on its integration to third party software and/or indicators?
Perhaps you are subscribing to an expensive 3rd party add-on because you absolutely need the tech for your trading. Did you know that with enough research, you might find something comparable or even better that’s also cheaper if not free?
Most platforms have almost everything you need as a trader. It’s just a matter of taking the time to test multiple trading platforms. And that’s why working with a multi-platform brokerage is so important. The more choices you have, the more options to choose from, the wider your palette for developing your own trading approach and potentially enhancing your trading performance.
The best futures trading platform comparisons are done hands-on. So, if you’re thinking of making a switch, be sure that you’re doing it for the right reasons, that you’re willing to give up a known advantage for another. And be sure to spend time trying different trading platform demo accounts, with adequate tech support.
If you don’t have such a wide selection or option for support, then give us a call here at Optimus Futures. We have an extensive list of day trading software so you can conduct your own futures trading platform comparison, complete with one-on-one platform support. We realize that the platform you use intersects with the skills you develop to engage the markets. By having a wide suite of platform solutions to choose from, you can better select which futures trading platform might be the most customizable for your own personal trading style. Remember, it’s your trading that should drive the platform, your platform shouldn’t drive your trading.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.