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First let me apologize if the answers to this post could be found on the forum. There is so much information, I got lost.
I am a total beginner and had done only demos so far on TS.
I am looking for a platform and a broker that would suit what I am looking for and that won't be too expensive to use.
First really important thing I cannot understand and I was not aware of, before entering this forum is the difference between a platform and a broker.
I though that all brokers have their platform, whether it is web, desktop or mobile. Maybe it is because the ones I know are TS and TOS by TD Ameritrade.
I wanted to use TOS and was sure that this is the platform I was going to use, as it has free demo and a free platform, which suited me as a beginner, but eventually I found out they don't have Mini Dax, which is the main index for me at the moment.
I would really like to know how do I even start searching for the right broker and the right platform for me, cause I have been searching for hours online and got nowhere really.
Even though I know so little, I think I know what I am looking for, but not sure at all how to find it and note sure how would I know when I found it. Along with it having Mini DAX and free demo (like NT).
1. As I work from Israel, I need a broker that supports foreigners
2. I need that it would be easy enough to protect (hedge?) my future contract with an option trading
3. That it would have free indexes (unlike TS), free studies\indicators and reasonable fees.
4. That I would be able to trade from the chart itself (like in TS).
5. Later on I would like to use algorithms and I am not sure, if all platforms support them.
6. Would be great if I could do Forex trades.
I saw Ninja Trader, Trading Technologies, Sierra Charts, MetaTrader and Trading View mentioned in some threads, but it was so overwhelming and I am still not sure which are platforms that have a broker connected to it (please forgive me, if this sentence is totally inaccurate) and to which platforms I have to also find a broker to work with.
I hope I didn't bore you to death, if you got so far.
To make you less confused, (basically, because other beginners can read the topic)
*The broker is the mediator, he is the one who will allow you to place your orders on the markets (the account on which you will deposit money to trade).
*The platform is only the software part, the interface that allows you to observe, analyze, and allows you to have or create different tools.
* You must then connect your platform to a data feed (prices and data that feeds your charts).
Maybe some of them provide all three but I can not guide you on the choice of a broker, others will do it much better than me.
For the algorithms, you have to watch the compatibility of the language, I think each platform has its own language.
@Orderbook has provided a good quick summary. To elaborate:
- Brokers will sometimes provide all-in-one service, with their own proprietary trading software ("platform"), and their own data feeds and their own handling of order routing to the exchanges. TradeStation and TOS do this, so the customer has everything together and doesn't have to go out looking for alternatives or make any additional choices.
- There are independent companies that have created software packages (platforms) for traders to use. If your broker supports one or several of these (some brokers only use one, some allow many), then you will have a choice based on the different features they offer. None is perfect, but many (most, actually) are pretty good -- good enough for most traders. Some are excellent, but that becomes an individual trader's decision, and opinions will vary. (As far as programming, yes, every decent platform has a programming language. Some use a standard language such as C# or C++ for the basic language but still have their own interface that you have to call to use the platform's functionality, and some of their languages are just built from the ground up. There is a learning curve for all of them.)
- There are independent companies that provide data feeds to the platforms, and take orders inputted on the platforms and route them to the exchange for execution. If you use one of the independent platforms, then the platform will have the ability to connect to some or all of these outside networks, and to connect to your broker account.
Why all this complexity?
Most brokers prefer to just have arrangements with platform companies to use their software, and with data and trading networks too, since (a) the different platforms and data/trade-routers are usually widely-known in the trading community and traders will find it a plus to be able to use something they already are familiar with, and (b) it saves the broker from having to make the serious effort to create and maintain their own software and/or data networks.
I would not automatically decide that the convenience of having everything provided in one broker-supplied solution is better. It's obviously good for the broker because it is a package they can offer to their customers, and it tends to tie the customer to the broker. But to understand what is available, you will need to look around to see what else is out there.
If you don't use a one-stop all-in-one type broker-provided solution, you may feel that the packages that have everything together are actually tying your hands... On the other hand, many of their customers prefer the convenience, and in most cases the packaged solutions are good enough, even excellent. You can see how there would be different opinions among traders.
Another wrinkle in all this is that there are two layers (actually, three) of "brokers" out there:
1. You have Introducing Brokers ("IB's"), who are customer-facing companies that service traders essentially in a customer service (and sales) capacity, and who "introduce" customers to the next group, the FCM's.
2. FCM's, which stands for "Futures Commission Merchants" (don't ask me why the name was chosen ) actually have your account in the sense of holding the money and providing the platform, data and routing services.
IB's may represent many FCM's, and many FCM's have their own customer-facing operation, and many will have both IB's and their own. For example, you can open an account directly with TradeStation, or you can go through an IB who has a business relationship with TradeStation, and perhaps with other FCM's also.
3. I said there is a third level of brokers, and they are the Clearing Brokers, but you won't be dealing with them. That story is for another day. (And some FCM's are also Clearing Brokers .)
Is this more or less confusing? Well, let me add some more complexity while we're at it.
At one time, NinjaTrader was a leading independent platform maker, used by many brokers. Then and opportunity occurred in the brokerage market as an IB was in trouble, and NinjaTrader, wanting to change its position in the marketplace, bought them up and started NinjaTrader Brokerage. Since they were now a broker themselves, they ended some of their relationships with other brokers who had offered their platform, but not all.
Since they are an IB, if you open an account through them, you will need to choose one of the two FCM's they are connected with. If you want to use the NinjaTrader platform, which is widely known and well-respected, you are going to have to either go through NT Brokerage, which means you will have an account with one of NT's FCM's, or you will need an account with one of the few other brokers NT has kept a relationship with (see their website for details.) But if you have accounts directly with one of the FCM's, you may use a different platform depending on what they offer.
Yes, it's complicated.
This post is also already long, as mine usually are, and perhaps no one is still reading it. There are other questions raised in the original post, but this may help in filling in the general outlines. It will involve more looking in more places to find all the answers, and I'm sure someone else will jump in too.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
So if I understood you correctly, the best way to do it is first find the platform and then the brokers that work with it and not the other way around.
Now... Who usually provides the data? The platform or the broker (or should I use a third party for that)?
I am also not sure I understand the fees part. I pay to the platform the cost of the platform and sometimes for the data and for each action I make upon the platform I pay the broker according to its fees, right?
I think that as this is very complex, I tend to go with NT, as they seem to be good and have good rates for everything (the platform might be slightly expensive, but it already includes the studies, the indicators and the data I need - and please correct me if I am wrong).
I took a look at SC and if their interface looks like their website, then I guess it is not for me, although I saw more recommendations for it than for NT.
You are more than welcome to write a book long comment. I don't mind the read, as long as I don't have to search everywhere here
Thanks to Bob for this excellent development.
I don't know Ninja Trader at all, but don't trust Sierra's old-fashioned appearance, it's even paradoxically its strength, it's a powerful and very configurable platform (It makes me think of a Unix terminal, it's ugly but terribly efficient).Take a little time to test and compare different solutions by yourself.
Thank you for the mention. let me approach this from a different angle.
If I took away a platform from a profitable discretionary trader, it would be hard for the trader at first, BUT it would not take him years and months to find one. For the most part, he would want simplicity in order placement and good execution.
Most people who switch brokers and platforms do it due to the speed or accuracy of data. I know this because the majority of our customers come from other brokers.
The experienced traders are blessed with the ability to make things simple while beginners are busy with hypotheticals.
"what if I want futures, and then sell options on it and then add forex and trade from the chart and then turn all into an algorithm?" This is how the OP's thread reads to me.
Choose a free and cheap platform. Execute. learn to trade, and see what you need. You will learn the mechanics of the platform, data, and speed over time.
My 2 cents.
Matt Z
Optimus Futures
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I am glad that things are apparently slowly becoming more clear for you.
I understand your confusion. My basic advice about it to just relax and learn slowly. I had a very similar experience when I left the self-contained world of TOS (and later the equally self-contained world of TradeStation) -- it was basically, "What??? What is all this complex variety and how does it all fit together, and what about this and what about that, and, and, and...."
You just may be used to the enclosed worlds of the brokers you are used to, and never knew about the wide world, which is suddenly confusing. But it's really not that hard.
Now with that said....
1. You will need a broker. You will be doing business with them and trading through them. They can offer you things like customer service and a trading platform and data. They will charge commissions and fees per transaction, and sometimes you will pay separately for the platform or data, and sometimes not. You'll really have to look over what is out there. Just do it slowly and find out what is offered. (I'll touch on fees in a minute.)
2. Any broker is going to give you a means of executing trades, which means a trading platform. Sometimes there will be a choice, which means more complexity, sometimes only one. You will like some more than others, and some are unique to particular brokers while some are not. I suggest you find something you can work with and it will be good enough. If you want to view the field, take a lot of free demo offers. Brokers offer them.
3. Any broker will give you market data so you can use the platform and make trades. Usually you don't even have to think about it. Sometimes there will be choices offered and you will need to decide. Relax about it. It's a competitive market and data vendors that are not any good haven't been able to last.
This is my basic point: there are real differences, but most of your choices are going to be just personal preferences, and most will be good enough. There may come a time when "good enough" is not enough for you, but mostly, if you like what you are using and if you have looked over a few of the alternatives, then that will be good enough. You can branch out later.
See? It's not so confusing.
Now, about fees. There will be per-transaction fees, and they will include broker commission, data network fees, exchange fees and so on. The broker will charge them to your account as you trade, per trade. There are differences, but again, look over the field and see what's offered. You can just ask them.
Always find out the "all in" commission and fees. Sometimes brokers will just tell you or emphasize to you their "commissions," which is just their cut of the all-in transaction commissions and fees. Get all of it. Also, be sure you know whether you are being quoted "per side" or "round turn." Per side: all trades get charged once when it's entered (that's one side) and again, the same amount, when it's exited. The per side charge is always half the round turn total, which is both sides together. Just be clear that you know which is being stated, in your own mind. If you have a per-side quote and you think, "Oh, so that's my total commission and fees for the trade," you are wrong about that; it's half of it.
With some brokers, you will have to pay for the use of the trading platform, not a per-transaction fee but a monthly or similar fee. Sometimes the broker collects that, sometimes you deal with the software company. The broker will make it clear what you have to do.
You generally are going to get data supplied by the broker, and there will be a fee baked into the total transaction costs, which the broker collects per trade. If you want to, you can research the different independent data and trade routing companies, and you can generally contract with them directly if you like, and then you will have a fee, often a sizable one, that you will pay them directly. Since you're just starting out, you would be crazy to get into this level of complexity. Relax and use what the broker provides; if they provide a choice, you can do a little research or just go with the cost or the platform it is offered with. Or flip a coin.
So my advice, is: Relax. Find out more, but be relaxed about it. Do demos until you are comfortable (the exchange won't let you have unlimited free live demo data, which is why brokers won't let you either. So do make up your mind. )
This is actually not that hard.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
I will continue my research for the most comfortable platform (TS is quite comfortable for me, but the demo is not free at all). I was worried for a sec about the data issue and I am more comfortable with it now. No reason to make things more complex than they are.
Last question, which is probably somewhere in the answer you already gave, but can I find which platform works with which broker through the broker, through the platform or through both?
) actually have your account in the sense of holding the money and providing the platform, data and routing services. 
.)
