Trading digital assets is impossible without appropriate specialized software. To some extent, the basic software can be found directly on the cryptocurrency exchanges themselves. At these sites, you can make deals, watch simple charts, etc., but as a rule, this is not enough for full professional trading. The solution to this problem is special trading terminals, which are designed for cryptocurrency trading and in this article, we will talk more about such platforms.
What are terminals for cryptocurrency trading?
By and large, a trading terminal is called absolutely any program or set of scripts that show the current situation on the market and allow to make transactions. As it was mentioned above, absolutely all exchanges are equipped with such scripts. But today we are interested in the definition of a full trading terminal, they can be two types:
- A separate online platform that provides broad functionality for trading and can be integrated into any cryptocurrency exchange.
- Desktop or mobile application with the same characteristics.
It is worth noting that the concepts of “stock exchange trading web interface” and “trading terminal” are rarely distinguished in practice. That is why many people still believe that the stock exchanges are equipped with full trading terminals.
In order to trade on cryptocurrency exchanges through trading terminals, it is necessary that they are compatible with each other. As a rule, each exchange publishes a list of supported terminals on its official website. For example, one of the first cryptocurrency exchanges, which began to officially support, perhaps, the most popular terminal for the traditional market MetaTrader 4, was BTC-E.
If the platform supports separate programs for mobile devices and computers (offline terminals), then you just need to download and install them on your device. If the exchange is compatible only with online services, then you will need to register in them, and then add the necessary exchange in the settings of your account using the API tools.
For those who do not know, API is the application programming interface. In other words, this is a script of program elements of a certain resource (in our case of a cryptocurrency exchange), which can later be integrated into another application. After that, it will be possible to work in a third-party application, with a certain part of the data of the connected resource.
At first glance, this may seem complicated, but in fact connecting via API takes no more than a minute: as a rule, all that is needed to do is copy the API key in your account on the exchange and paste it into the appropriate field in the trading terminal.
By and large, any exchange can be integrated into a third-party application, the main requirement is an open API. As a rule, this tool is open on almost all cryptocurrency exchanges, but there are also exceptions. For this reason, before choosing a certain stock exchange, it is necessary to clarify this nuance.
The main advantages of trading terminals
First of all, trading terminals are needed by professional traders who, in the process of trading, carry out a comprehensive technical analysis. That is why a huge number of different tools are integrated into them. Traders have the opportunity to customize the trading terminal for themselves: remove unnecessary functions, switch on additional plug-ins, etc. In addition to technical analysis, with the help of terminals, it is possible to quickly track the current situation on the market. Through these third-party applications, you can find out information on all digital coins that are traded on one or several exchanges at once.
In addition, some trading terminals have their smaller copies: mobile applications or browser plugins. Of course, they do not have full functionality, but with their help, the trader can receive timely notifications about certain events in the market.
Another reason why most professional traders choose trading terminals is convenience and personalization. For example, you may not like the interface of the exchange, so you can choose a convenient trading terminal. As a rule, it is possible to swap blocks, resize them, adjust the color palette and much more in the terminals.
The most important functions of the terminal, which worth attention:
- a large number of different tools for technical analysis and trade;
- self-tuning of various parameters;
- sorting and systematization of data from several cryptocurrency exchanges at once;
- adaptation and personalization of the interface;
- the ability to use the service on multiple devices at once;
- terminal speed;
- safety and security of trader`s funds.
The difference between exchange and full trading terminals
Despite all the advantages, some traders do not use separate trading terminals but are content with the functionality provided by the exchange. By and large, it is enough to carry out a superficial assessment of the market situation, as well as the trade itself.
What is a stock exchange terminal?
- Basic charts, as a rule, are “candlestick chart” and linear timeframes.
- A limited list of exchange orders. But to see the extended list, you must go to a separate page.
- Standard charts of trading volume and other market indicators.
- Basic indicators for technical analysis, for example, moving averages.
- Standard trading tools, such as stop-loss and take-profit.
- Minimal personalization options (interface color changes, transfer of interval charts to non-interval).
By and large, all stock trading terminals are quite simple. The creators of the exchanges do not integrate a huge number of functions into their own products in order not to slow down the platform. The fact is that additional tools consume a lot of resources. It should be noted that even basic tools can be found only on those exchanges that have powerful servers. Small platforms for cryptocurrency trading can boast only a couple of standard charts, without any indicators. This cannot be said about professional terminals, which are originally designed for high loads. The fact is, online services are running under fairly large servers, and offline solutions use the power of the device on which the trading is performed.
Here is not a complete list of full trading terminals functions:
- the ability to create templates of trading strategies;
- availability of tools for simultaneous trading on several exchanges at once;
- the possibility to create your own scripts;
- simultaneous display of a huge number of tools on the main screen;
- multilingualism, with which it is possible to receive information from different world exchanges in your native language;
- the possibility of forming own asset base.
A full trading terminal can be compared with professional software for graphic photo editing, while the exchange functionality – with an editor that is built in any modern smartphone.
The disadvantages of trading terminals
- The speed of the data display. Even in the most top terminals, there is still a slight delay (a few seconds) between the appearance of data and their direct display. Little-known services can display information even after a few minutes. It is quite obvious that such a delay can lead to serious financial losses, especially when it comes to high-frequency trading.
- Paid access. The vast majority of high-quality terminals are not free: for example, Coinigy is distributed on a monthly subscription basis – $18.66. Licensed versions of other popular terminals can be bought one-time, they cost from $80 to $300. Of course, it is possible to find hacked and free trading terminals on the Internet, but using them is extremely dangerous.
- Low security. Unfortunately, this flaw concerns not only hacked but also official versions. Most of the terminals that operate in the cryptocurrency market (especially free ones) are relatively new and have not yet had time to establish themselves. Therefore, before giving access to own finances to a particular service, better to properly read reviews about it. Also, some terminals may have a vulnerable communication channel with the exchange. Because of this, hackers can easily access the trader’s funds. Only an experienced programmer can find out the level of channel security and only in case if its source code is open.
The largest exchanges constantly supplement the functionality of their products and improve their quality, but all the same, it is very difficult to compare them with full trading terminals. Of course, professional traders, as a rule, prefer third-party applications, but for beginners, it is better to start a journey with the exchange functionality. The fact is that novice traders often use exactly the same functionality in terminals, that is already on the exchange. Against this background, it seems appropriate to sacrifice the convenience of the interface and start trading on the stock exchange, and go to the terminal when the need for it becomes obvious and the income allows to buy a license to use a reliable platform.
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