Many financial advisors tell us to invest our money, so we can profit from it in the future. While the stock market has been hard to access for private individuals for a long time, these days there are more and more online brokers that allow anybody to take part in trading with stocks and other assets. When you are looking for a good online broker, there are some things you should keep in mind. Here are tips on finding the best online trading service.
What Types of Online Brokers are There?
It is hard to find the right trading platform for your specific use. You can do some research on websites that test and compare the available offers. This review of the popular website RaceOption, for example, will let you know about the provider, the costs, features of their trading app and much more. Looking at an article like this will give you an understanding on the many ways a trading service can differ from other available brokers.
One basic difference is the provider behind a trading platform. Those can be regular or direct banks or specialized online brokers. Other distinctions are the kind of assets they offer for trade, their fees or the overall investment strategies they allow. Three typical kinds of online brokers for beginners can be separated into discount brokers, platforms with full or automated advisory services and micro investing platforms.
? Discount Brokers
Discount brokers are a popular choice for broker platforms. They might not offer the same all-around service as other options do, but they cost minimal fees and are great for starting out. These kinds of trading apps leave the decisions up to you. That also means you have to do the research on which assets and trading strategies are the right ones for you.
For Example: Charles Schwab, Robinhood, E-Trade
? Full or Partial Advisory Services
Trading apps can also come with additional advisory services. This is typically true for platforms that were created by banks and established financial institutions. They can offer you your own consultant, who can make the investment decisions in your name or advise you on which assets to buy or sell. Naturally, these services are more cost intensive.
For Example: Bank of the West and other established banks
A mix between the discount brokers and full advisory services are brokers that offer a “robo-advisor”. Here, you answer a handful of questions and enter your information, and the app calculates automated financial advice based on your data. These kinds of app might include other automated services, like a daily rebalance and having the platform perform actions with minimal tax-losses in mind.
For Example: Wealthfront, Betterment
? Micro-Investing
Micro-investing is a special subset of investments. Here, you use small sums, like a few dollars a week, to invest and profit over time. There are several ways to micro-invest. You can use a dedicated micro-investing platform. Some online banks also offer the service as part of their regular debit bank account. You can set them up to round up any purchase you make using their service and automatically invest the difference in assets of your choice.
For Example: Acorns, Stash
What to consider when choosing an online broker?
Before you pick an online broker, there are some questions you should ask yourself. Based on the answers, there are several services that suit your needs better than others. The following factors are features that mark a reputable trading service:
? Available Assets
If you have a certain type of asset in mind, like ETFs or Binary Options, you will want to look into which buying and selling options and which markets a specific broker covers. For example, not all trading apps allow you to trade internationally.
? Depositing & Payment Methods
Are there minimum deposits you must make? Do you have to pay a fee for transferring money? Which payment methods are available? A good service has a wide variety of methods to select, no minimum deposits and minimal to no transferal fees.
? Stable & Intuitive Technology
Especially if you want to day-trade and react to market movements quickly, you want to look for a service with a stable platform and high performance. If the service keeps crashing or lagging, you will miss out on great opportunities. The same goes for the complexity of a service. It should be easy to learn and handle.
? Demo Accounts
Good online brokers allow you to set up a demo account. They let you trade under realistic circumstances, with real time market movements and the app’s full set of features, but without using (or gaining) real money. This way you can test out if the platform suits you.
? Customer Service & Additional Services
Typically, bank brokers offer the best service, including a personal consultant. But other trading apps have great customer service as well. Make sure it is available 24/7 and in your language. It helps if the app has some kind of tutorial or info section on trading as a whole as well.
Conclusion
Trading apps and platforms make it easy to take control of your own investments on the stock market. Banks and other financial institutes offer online brokers to help you trade on your tablet, phone, or computer. These services can differ in many ways. Some only offer specific asset types or markets, while others cost more fees but also give you great consultations.
If you are looking for the right app, you can look at test or comparison websites to find the available platforms and what separates them. The reviews will let you know which service is good and reputable. Make sure to keep your own iestment plans in mind and check if the specific app offers what you need on top of that.