How to Pick a Trading Platform and Broker
Before you pick a trading platform or broker, you need to be clear about your investing style. Each platform as its positives and negatives, so choosing one that suits you best is vital to keeping the process of trading as easy and enjoyable as possible. Similarly, when choosing a brokerage service you want one that will support your investing goals and have transparent fees, a broad range of features and excellent security. Here is how to pick a trading platform or broker.
Investing or trading for profit requires a broker. Some brokers deal directly with customers and broker-resellers who act as intermediaries between you and a larger broker. The best broker for you will depend on whether you an active or passive investor, how much you know about investing and if you need help identifying opportunities. If you want to learn more about investing and need help to do this, the broker you want will be very different to someone investing long-term towards a pension.
The broker you choose does not have to be the broker that stays with you for life, just choose the best fit for where you are today. You can always check reviews of brokers online for additional peace of mind.
Before searching different broker sites, decide if you want a broker offering individual advice and recommendations for trades, known as full-service brokers, or if you want to hold long-term investments where you have an appointment with a broker once a year. Once you have decided your trades and investments, search out incentives brokers are offering, such as a forex bonus or other promotions. These are offered to experienced traders as well as people entering the investment world for the first time.
Be Clear About the Fees
Knowing the fees and other charges is essential to make the best return on your money. Generally, you want these as low as possible. However, most brokers require a minimum balance for setting up an account, with online brokers having the lowest limits.
Check if the broker fees suit your investing style. Brokers may charge for opening an account with additional maintenance fees due annually or monthly. Trading commissions may vary depending on the number or value of trades through the brokerage. Read the small print, particularly if the rates seem too good to be true. You may find additional fees mentioned in the account agreement and fee summaries.
Once this is done, check the customer service support on offer including the fees to communicate with a human being for trade assistance. Also, check what technical support is available. Finally, choosing a broker is not permanent, you can switch and transfer your holdings to a new broker.
The best trading platforms offer a mix of features to help your investments, coupled with low fees. Free online trading platforms are often offered by brokers in exchange for making an agreed number of trades each month or holding a set sum of money on account. Choosing a trading platform has to be based on your personal needs and not solely on the recommendation of others until you have completed your own research.
Always test out the trading platform’s demonstration site to see if you find it user-friendly. Trust your first impressions, because if you are comfortable using the site, you will have more confidence in the features and functions that you have not yet seen. If on first sight you don’t like the platform, it probably is not for you. It could be that a basic order entry screen suits you best as a new investor, with more complex sites best for later, for advanced traders.
Do not worry about features that you are not going to use, because that will just complicate your trading experience. You should use at least 80 per cent of the functions available, or the site may be too sophisticated for your needs at this time. Start simple and learn faster.
There is no universal rule that makes one good trading platform better than another, just make sure you have the software so that everything can run smoothly for you and your broker.
Featured image: WittySparks