When it comes to forex trading platforms, the two main types are software-based and web-based. More and more, web-based forex platforms are gaining popularity and more brokers are implementing them (GFT Forex and Forex.com are notable examples), though many traders still prefer software-based trading platforms.

There are a handful of popular software-based forex platforms that are used most often, such as Dealbook FX, Global Trading System, Metatrader, and Tradestation. There are a few good reasons why many traders prefer to trade using this type of setup, and there are many benefits as well as a few downfalls to using this type of software.

One of the most popular reasons for using this kind of software instead of a web platform (which will usually be based on Java) is for developing a technical trading system. Most forex trading software allows traders to view real-time graphs of price data and to use technical indicators to create a trading system with preset entry and exit parameters.

Once a technical forex trading system is developed, a couple of platforms such as Metatrader and Tradestation allow for an autotrading feature, which can completely automate the trading and allow the trader to literally walk away from his computer while the software continues to look for trading signals. This is typically not a possibility when using a web-based forex platform.

There are many benefits to using a web-based forex platform, however, that are not available with its software counterparts. One main benefit is security: the main internet security protocol that is most widely used is called Secure Sockets Layer (SSL) which is a 128-bit encrytion, and every time you see that little padlock icon on your internet browser you know that you are on a page that is using SSL. When it says 128-bit, that means that all of your data is turned into an unreadable mess, and there is a passcode to decrypt it and make it readable that is 128-characters long. This level of security is not as readily available on a forex software platform, which means is it possible (but still not too likely) that a third-party could intercept your data.

Another benefit of going web-based with your forex trading is that you are no longer chained to a single computer that has your software installed, and you can log into your account on any internet-enabled computer. This is great for those of you that travel alot, and it is also great for when you are at a cyber cafe or wireless hotspot and want to see how your trades are doing.

When deciding which type of platform you will choose, it is really simply a matter of personal opinion and which setup you think will work the best for you. A few brokers offer both of these options (and many have wireless versions of their software as well, which means you can now trade from your smart phone or iPhone), so you will typically not be forced into only choosing one or the other.