When you
started out in stock trading, you may be inexperienced about which online
broker to choose. If you search online, you will find that there are a lot of
top brokers but choosing a broker is not about selecting the one that rank
number one in the top 10 broker list. There are several factors to consider to
make the right decision in choosing the online broker.
Decide Between a Full Service and
Discount Broker
Firstly, you
must decide whether you want a full-service broker or discount broker. The
full-service broker offers advice on which stocks to trade. The discount broker
does not provide this service so you are on your own to make a decision on the
trading. However, it does provide a lot of educational resources to teach you
how to become a professional trade.
Check the Brokerage Fees
Next, you
want to check the fees of the broker. There are various fees including
commissions, account minimum, and account fees. The commissions usually depend
on what you are trading, for example, the typical commission for individual
stocks range from $4 – $7. Options stocks will have a base commission fee plus
contract fee. The account minimum is the minimum amount of money you must
deposit in your account in order to start trading. You can check the FAQ
section to determine the minimum initial investment. Account fees refer to fees
for withdrawing the funds. Some brokers offer to reimburse your fees in case
you want to switch to them from an existing broker.
Check the Fee Structure in the
Brokerage
The fees may
be charged in a tier based structures. Newbies could probably get confused on
the fee structure and don’t know what they are paying for. You can ask the
customer support if there is something you don’t understand about the fee
structure. It is important that the fee structure matches your budget and
investing style. You should be wary about broker with a fee structure that was
too good to be true rates. In addition, you also want to check if the broker
has any hidden fee.
Find a Platform that Suits Your
Trading Style
When
selecting a platform, take into consideration your trading technique. Newbie
investors probably don’t need an advanced trading platform with extra features.
If you are a newbie, it will best to join a broker that has an extensive
educational resource including written and video tutorials. You can download their
PDF trading tutorials and spend some time to study it every day in a PDF
viewer.
You may also want to invest in a PDF editor so that you can make annotations while studying the trading tutorial. It is also convenient to study the trading tutorial PDF on a mobile device while you are on the go. You should compare different brokers on the tools and features they are providing to decide which one is worthwhile for your money. Get more details at https://pdf.movavi.com/.
Check If the Broker is Offering Any
Promotion
Many online
brokers offer promotions every now and then to attract new customers. The
broker may offer discounts in the form of a cash bonus or commission-free
trades. You should not choose an online broker based on the promotion that it
is offering. Some platforms offer a big bonus for new members but they charge
high fees. Therefore, you should check all the details carefully before joining
a platform.
Sign Up for a Free Trial at the
Brokerage
Many brokers offer free trials for customers to test out the features on their platforms. The free trials usually come with some cash bonus so you don’t have to load real money to access the platform features. It will give you the idea on the quality of the brokerage by just taking a look at the basic package. After you sign up for the trial, place a trade to check the process. Click on all the tabs to see how accurate the data they are providing. Check what types of commodities you can trade on the platform. Does the platform support watch lists? Does it provide screener to help you find a stock that meets your criteria? Can you control the trade execution? Does the platform support trading extend hours?