Are you interested in investing online but you are confused and not sure where to start? Online stock trading has made it easy for everyone to trade as it can be done easily from home and without the need for a huge amount of starting capital. The research team here at TopTradingPlatforms.co.uk have done some work to help you out and find the best platforms that can be used not only by beginners but also by trading veterans. After a very close look at the different options they have put together the following article which is aimed to help anyone to get started with online trading.
Criteria for the best online stock trading sites
The financial market has become very competitive and it has been a very tumultuous time for online brokers as with the competition increase and the few major acquisitions the landscape has changed significantly.
If competition is generally good for traders it might also be confusing as ultimately there isn’t one best online stock broker or trading platform but every of them has different strengths and weaknesses. So some might be more appropriate for a certain trading style and some for others.
In this article our ‘mission’ is to highlight strengths and weaknesses of the most common online brokers and trading platforms so that you can make your own mind and eventually pick the one that better fit your trading style.
One important thing traders need to look at when picking a trading platform is costs so we have spent a considerable amount of time trying to balance costs with the offering of each trading platform:
Cost per transaction: commissions are normally the biggest cost base for an investor. As mentioned before the competition has increased significantly in the latest years and this has reduced the costs for traders. For example in 2016 a typical transaction fee was about $8 but at the beginning of 2017 it was down to $4.95. Regardless of the price though it is very important that you get transparency from the online broker. Having this will increase trust and will also ensure you get your cost base right when determining profits targets.
Account minimums: make sure you check what are the minimums in the account as if things move against you the last thing you want is getting dinged by your broker’s minimum balance requirement.
Other charges like data, research and tools: the majority of online brokers have very good quality market data like real-time quotes, educational resources and stock-screening tools already integrated into their trading platforms. Some however do not charge for those and this could be a very good added value when picking the best online broker.
Extra costs: lots of online brokers will offer extra services like financial experts on call 24 hours a day and similar things but they do not tell clearly that there are extra charges. For example some brokers do charge an increase in commission fee to $25 or more if the trade is executed over the phone, etc. Other brokers do offer free education on trading strategies but the do require an upgraded platform with an annual fee. Although some of the added value can really help in being successful as a trader longer term, it is important to understand what are the costs for those and how they will impact your profit and loss.
The above examples are just some of the top criteria to analyse when picking an online broker and trading platforms. If you want to know more make sure you visit our trading platforms comparison section where our experts have analysed in details all the pro and cons of all the major brokers online and the trading platforms that they offer.