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7 Point checklist before Downloading an Online Trading Platform in Australia

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Online Trading in Australia by retail traders has grown by a lot in the last few years, especially during the pandemic. A lot of young people are actively trading stocks, derivatives etc.

But not all trading platforms are the same, and lot of the platforms are not even regulated. So, there are certain factors that one should consider before downloading an app or a platform of an online trading broker in Australia.

These factors are highly important as one’s trading platform can make or mar their trade irrespective of their level of expertise. This can hurt your trading experience and spell doom for your investment.

Many Australian brokers offer their own proprietary trading platforms to their clients. However, some use a third-party platform like MetaTrader or cTrader. Whatever the case is, this guide intends to provide online traders in Australia the necessary boxes to tick before downloading an online trading platform.

#1 Safety of the Platform

This is perhaps the most important factor one should consider before downloading an online trading platform. This is to prevent one from carrying out trading with an illegal or unregulated platform.

In Australia, the ASIC regulates the financial services industry and brokers need to obtain an Australian financial services (AFS) license from the ASIC.

For any broker to offer financial services & offer a trading platform in Australia, that broker must be licensed by the ASIC.

In a situation, where the online platform is not licensed by the ASIC, it is an illegal platform and those who use it do so at their own risk. If a broker is regulated by the ASIC, then it provides protection to clients against any form of fraud or illegal behaviour on the part of the broker.

It also ensures that the broker offers the products that adheres to the rules and regulation set by the government of Australia through the Australian Securities and Investments Commission (ASIC). The Australian regulator constantly monitors market participants and brokers to implement new rules/restrictions when necessary, for protection of the investors.

For example, in case of ASIC regulated Australian forex brokers, there are strict leverage restrictions on CFDs for the protection of investors, these limits were introduced in October 2020, when it was noticed that investors $774 million dollars in CFDs during 5-week March-April period, due to use of unsafe leverage. After intervention of ASIC, the losses of retail CFD investors were significantly reduced from $372 million to $22 million in a quarter.

Whereas an unregulated broker is not obligated to follow any rules set by the ASIC which are there for protecting the traders and would still offer unsafe trading environment by offering unlimited leverage to the clients and operate without any investor protection.

So, it is important to ensure that the platform you are trading with is regulated.

#2 Security of the Platform

In any financial transaction, security is of utmost importance. This not only ensures safety of funds, but also of other valuable private data such as credit card number, date of birth etc.

In choosing an online trading platform, you must carry out a background check on how secured the platform is. Do they have a strong firewall? Is your data safe with them? Has the trading platform been hacked before? Do they have a data backup system in the event of a crash? Does the platform allow Two-Factor Authentication?

These and more pertinent questions should be answered before you go ahead to download the trading platform on your device.

#3 Ease of Use

Here we look at the User interface and user experience of the trading platform.

The level of convenience in using the trading platform should be considered before downloading it. You should check the language of the platform, whether it’s in Australian English or can be set in Australian English. Also, you should check whether it’s fast or slow on your device, the memory space it will consume etc.

Consider downloading their platform & signing up with a demo account to test if you are able to easily use that platform or not.

A good online trading platform should also have easy to understand charts and graphs, adequate trading tools, indicators etc.

Before downloading and registering on the trading platform, all these must be checked since they help in making the trading process smooth for all.

Your trading experience might not go as planned if the platform does not suit you or your device perfectly. This can cause losses for you if you are not able to use the platform easily, as you may not be able to use features that you want to.

#4 User Reviews on the App Store or Google Playstore

Before you download a trading platform, you should check out the testimony of those who have used or are currently using the platform. These reviews can be viewed on the Google playstore or the App store where it was downloaded. Such reviews let you know about the trading platform, how it works, how efficient it is, etc.

This knowledge will guide you in deciding whether to go on to download the platform or look for others. Such reviews also reveal the likely problems in the trading platform and how you can avoid them, or if you should choose another platform.

#5 Cost

While some platforms have to be bought i.e., they are paid, others are free.

This should form a major consideration before downloading the online trading platform. You should also check if there are any commissions for using the app or charges you have to pay. Checking all these is important so you won’t be taken unaware when you start receiving deductions.

For example, some brokers have partnership with Tradingview, which is a paid platform used by many traders in Australia. If you want to trader via Tradingview’s platform, then you should check if your broker supports it or not, and are there any extra costs for using it.

#6. Customer Support

In the course of using the online trading platform, there is a high probability that you’ll encounter some problems. The customer support is meant to provide answers to your questions and resolve all the problems you’ll most likely encounter.

It is advised you try to test the customer support of the platform you plan to download to determine whether it’s fast, reliable and suits you.

You should try the language whether it’s Australian English, communication options whether they have an Australian phone line, email options and live chat.

All these are important considerations if you wish to have a seamless experience on the broker’s platform. You should also test the speed of reply to see how fast they reply to queries.

#7 Beware of Scams

Last but not the least, beware of scam trading platforms.

These scams can range from cloned apps, to similar websites etc. To avoid this, make sure you’re downloading your trading platform from the right source and not any third-party source.

You should also check the number of downloads and confirm the logo on the app before downloading. For websites, make sure you confirm the website URL to see if it matches with the broker’s actual website listed on the regulator’s public register.

Don’t Ignore any Red Flags

Finally, remember that it is really important to carefully check everything before you decide to put your money into a brokerage account. There are a lot of scam trading platforms out there, and there is need to be very careful.

These considerations should just be a start, as there are many other things to check.

Remember that trading has many risks associated with it, including loss of capital, scam platforms, instrument risk (as many instruments are derivatives, which are very risky). You must understand the risks before proceeding.

Consult a registered financial advisor before making any decision.