Online Futures Trading Platforms

How to Choose a Futures Trading Platform

Whether you are just starting out in the world of futures trading or are a seasoned pro, having an appropriate trading platform to support your trading style and execution needs can be the biggest difference in your ability to either be a futures market participant, or just an observer…to identify and capture futures market opportunities…or not.

So how do you determine which trading platform is best suited to your needs? We attempt to help break down the decision-making process here to help you make a more informed decision in selecting a trading platform suited to support your personal trading style, goals and unique market needs.

Explore Trading Platform Considerations Based on Your Experience Level:

New Traders

Experienced Traders

Professional Traders

Day Traders

Commercial Hedgers


Futures Trading Platform Considerations for New Traders

New traders seeking a futures trading platform for their unique level of experience and needs tend to have very different requirements than professional traders, swing traders, or day traders. As a new trader just starting out in the world of futures trading, the leap into selecting a futures trading platform can be daunting. Let’s explore some of the key factors that go into choosing a trading platform for new traders:

Common Trading Platform Requirements of the New Trader

Futures trading platforms that tend to be ideal for new traders are those that feature easy-to-use, intuitive interfaces offering more of the core functionality and basic functions they need for online trading and mobile trading. New traders starting with a limited amount of capital may also be concerned with the cost associated with a trading platform. Trading platforms can range from being free to having a premium cost, however, new traders just starting out are often interested in free to lower cost futures trading platforms.

Top 5 Features New Traders Want in a Trading Platform According to RJO Futures Brokers

  1. Ease of Use
  2. Practice Account
  3. Clear Order Types
  4. Risk Management Tools
  5. Access to Support When Needed

Educational Trading Resources for New Traders:

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Futures Trading Platform Considerations for Experienced Traders

Experienced traders are those seasoned individual traders who have experience trading futures but are not day traders and do not trade for a living. They have likely tried one or more trading platforms over the course of their trading history and tend to know what core features and functionality work for them. An experienced trader will be less inclined to trade out of emotion will be more focused on the tools of the trade, including charting and understanding risk. Let’s explore some key factors in choosing a trading platform suited for experienced traders:

Common Trading Platform Requirements of the Experienced Trader

Futures trading platforms that tend to be ideal for experienced traders are those that offer an intuitive execution dashboard supplemented by additional tools, analytics and order entry options for online trading and mobile trading. Experienced traders tend to have more capital than new traders and desire a platform where their strategies can be reliably executed. Experienced traders tend to be more focused on functionality for easier market participation.

Top 5 Features Experienced Traders Want in a Trading Platform According to RJO Futures Brokers

  1. Direct Access Order Routing
  2. Available Market Data
  3. Speed / Reliability / Mobile Access
  4. Time & Sales
  5. Customizable Dashboard

Educational Trading Resources for Experienced Traders:

  1. Spread Trading
  2. Technical Analysis
  3. Fundamental Analysis

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Futures Trading Platform Considerations for Professional Traders

Professional traders trade in the global markets for a living and typically are employed by a professional or proprietary trading firm. Professional traders are seasoned experts who may seek out the more sophisticated toolset of a futures trading platform, including high-frequency capabilities, or who may employ algorithms for the placement of large orders. Let’s explore how a professional trader may approach selecting a futures trading platform:

Common Trading Platform Requirements of the Professional Trader

Professional traders generally can assess market conditions using a combination of advanced tools, strategies, and market data, including backtesting strategies and being able to better execute on a trading plan as well as insure trades with pre-risk protocols. Often well-capitalized, professional traders are less concerned with cost and more concerned with high speed performance and reliability.

Top 5 Features Professional Traders Want in a Trading Platform According to RJO Futures Brokers:

  1. Order Management
  2. High Speed Direct Market Access
  3. Configurable FIX or APIs
  4. Pre-Trade Risk Functions
  5. Depth of Market

Educational Trading Resources for Professional Traders:

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Futures Trading Platform Considerations for Day Traders

A day trader differs from a professional trader in that a day trader is classified based on the frequency of their trading and must meet special requirements from their brokerage firm. Day traders are often concerned with price action and volatility and tend to close trades before the end of a trading day. A day trader may select a trading platform for tools and functionality to support short-term speculative (or profit-taking) trading strategies. Let’s explore how a day trader may approach selecting a trading platform:

Common Trading Platform Requirements of the Day Trader

Day traders rely on short-term movement, liquidity and price volatility of the markets to take profits, so in choosing a trading platform a day trader may focus on key functions to support their strategies. Trading platforms that have clear order entry and order flow as well as live quotes and fast-breaking financial news that moves the markets are likely requirements in the day trader’s chosen platform.

Top 5 Features Day Traders Want in a Trading Platform According to RJO Futures Brokers:

  1. Real-Time Data and News Feed
  2. Technical Indicators
  3. Price Charts or Level II
  4. Speed / Reliability / Mobile Access
  5. Price Quote Feed

Educational Trading Resources for Day Traders:

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Futures Trading Platform Considerations for Commercial Hedgers

Traders who buy and sell actual commodities can use the futures markets to protect themselves from commodity prices that move against them- these are commercial hedgers. When choosing a trading platform, hedgers tend to have special needs when it comes to trading futures, including clearing and execution features as well as having access to research and government reports that help drive their decisions. Let’s explore how a commercial hedger may approach selecting a trading platform:

Common Trading Platform Requirements of the Commercial Hedger

Commercial hedgers are concerned about price protection and controlling risk exposure, so the features, strategies, and functionality of the trading platform they choose must support these goals. This can include built-in proprietary market research to inform positions, pre and post-trade risk management protocols, OTC solutions, and special hedge management technology.

Top 5 Trading Platform Features Commercial Hedgers Want According to RJO Futures Brokers:

  1. A Library of Hedging Strategies
  2. Proprietary Pricing Tools
  3. Access to OTC Structured Products
  4. Risk Tools
  5. Research, Real-Time Data and News Feed

Educational Trading Resources for Commercial Hedgers:

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Conclusion:

Choosing a trading platform is an exciting part of a trader’s journey. It is the technology that allows them to participate in the global markets and it houses the tools and functions to help inform and support their trading. When selecting a platform, a trader will need to take several things into consideration, including their level of experience, trading style, and goals. At RJO Futures, we provide the technology and support to a range of traders – from new, experienced and professional traders to day traders and commercial hedgers.