Market Strategies: Trading Platforms and Market Approach
One of the most important aspects of any trading strategy lies in the market platform itself, as it can be a key indicator of the combined influences that will impact price action. This is especially true if you are a shorter-term trader that uses intraday strategy approaches. If you do not have an efficient trading platform, it is possible to become the victim of slippage that can generate unnecessary (and largely unfair) losses.
Perhaps many of these issues are less important if you are taking a long-term time horizon but there are situations even then where market volatility requires some sort of position adjustment that is more complicated by the inability of the technology to match the swiftness of the moves seen in the market.
There are many examples of these types of situations, and we do not need to pull back to major crashes (like those seen in 1929 and 1987) in order to find these types of instances. For example, the monetary policy changes by the Swiss National Bank to remove its price peg to the Euro caused massive changes in the markets that impacted several asset classes at the same time.
Other examples can be seen after the tsunami events recently in Japan or even to the stock market collapse of 2008 to see instances that are not so far from our current market influences. Unfortunately, many investors are not informed on the market history (or even choose to ignore it) but these are all market forces that continue to impact positions today.
Trading platform offerings have made some significant advancements over the last decade and it is now possible to achieve supreme execution. The most advanced charting packages should be combined with updated news feeds found directly on the trading platform so that you can have a better understanding of why markets are moving in a certain direction on a given day.
There is no piece of the puzzle that is too small when looking to define, refine, and maximize days with your trading strategy. This includes the trading platform itself, and there is plenty of flexibility involved in the testing of demo offerings from the best brokers in the market.