Tips to Choose the Best Online Stock Broker

Author : baljitsinghseo
Publish Date : 2020-11-25 15:56:09


Tips to Choose the Best Online Stock Broker

Online discount brokers have changed the ways and means of stock trading in the last decade or so. A minimum brokerage, flat-fee model, and nominal maintenance charge is the new trend. Today most casual as well as professional traders use online brokers because of the lower fees and endless investment options offered at fingertips.

When you compare the traditional brokerage firms with the growing online discount brokers, the latter are cheaper and pass the benefit to you by offering lower brokerage and account management fees. And, opening a demat and trading account has become much easier. But before that you must learn how to select the perfect and reliable stock broker.

So, let’s move on to some interesting tips which will guide you before choosing your online broker.

Importance of Online Brokers

  • Low commissions: The primary benefit of choosing online brokers is the lower costs, whether in terms of brokerage or maintenance.

  • Easy to get started: With the adoption of new technologies, discount brokers eliminate paperwork as much as possible. With everything online and eKYC registrations, you get your trading account started the same day.

  • Efficiency: New brokers understood the problems and inefficiency traders and investors were facing with traditional brokers. Therefore, they tried to eliminate all time-consuming processes and established safe, secure, and stable platforms for trading that can execute the orders with just a few clicks.

  • Great analysis tools: With improved chartings, advanced technical and fundamental indicators, they provide you a bird’s eye view of the company and its stock with just a few clicks. You can enjoy features like notifications, smart orders, mobile apps, and everything that can increase efficiency.

How to Choose an Online Stock Broker?

Here are some important tips to select a good online stock broker:

1.Match Your Needs

Every individual investor has different priorities. His needs, long-term goals, education level, trading experience, style of trading, risk tolerance, understanding of technical and fundamental analysis, choice of asset classes, size of trading will be unique from others.

Similarly, the services of online brokerage houses also vary from other players in the industry. Some might offer you good indicators, some may give better educational resources, and some might provide great customer service.

Therefore, it is best to match your requirements with the best services brokers are providing, so that you choose a suitable broker according to your financial goals.

2. Check Your Broker List for Safety 

When you make a list of brokers suitable as per your requirements, verify whether they are safe and legit before putting your hard-earned money.

Check if the broker is fully-licensed from the relevant authority based on the country you live in. Whether it provides you any account protection and insurance? What norms do they follow for data safety? What about two-factor authentication? What are the reviews of existing customers? 

You can verify these details by visiting the broker's website and cross-checking it with the information provided by monitoring bodies. 

3. Discover Types of Accounts and Fees

Search the types of accounts the broker is offering. What are the fees they are charging for their investing tools and services? Compare with the competitors for a better view. And, opt for add-on services you think will benefit you and increase your profits.

In terms of fees, you must check minimum deposits, account opening, closing charges, and annual maintenance charges. Are there any existing promotions/offers/referrals, availability of any free trial? What are the margin rates, minimum account balance, borrowing process and costs, brokerage costs? What about the availability of any free asset classes to trade, differential pricing for pro traders, penalties, and fines, if any?

4. Test the Trading Platform

Although every broker describes its features on their website, it is always good to try it out on your own. Many brokerage firms today offer you a free trial of their platform before you go for the paid version.

Spend a substantial amount of time on the online trading portal while trying and testing it. Try to check as many options as you can. Look for a user-friendly and easy to navigate platform.

Use multiple quotes, test screeners, browse asset classes, create watchlists, test notifications, and alerts. Try out different types of orders, test out the indicators (both technical and fundamental), analyze multiple charting capabilities, algorithm trading, and have a complete tour of the platform.

5. Browse Educational Resources 

Educational resources matter a lot when you are a novice trader. It helps professional traders to add on to their existing knowledge with vast resources available.

Are there any blogs, articles, FAQs, videos, lectures, podcasts for your education and learning? Investors overlook this, but a crucial aspect to look for in an online broker.

6. Easy Deposit and Withdrawal

Easy deposit and withdrawal play a key role for retail investors like you and us. If you need money, how fast your broker can transfer funds from your trading account to your bank account? An important question to figure out!

Also, you must check the available ways for depositing money a stockbroker is providing. Is there any processing fee? What time does it take to deposit and withdraw? 

Conclusion

Choosing the right broker can help you a lot. Determine your needs, compare all the alternatives and then pick the right broker to initiate trading.

Look upon factors like taxes, retirement planning, etc., while selecting the account type. These elements impact your profits a lot in the long term.

And, whether you are a novice trader or an active trader, do focus on the quality of customer service a broker provides. It is of great significance as whenever you are in trouble, you will need your broker to resolve your problems. So, what are you thinking? Shortlist the best stock broker names you have in mind and then go ahead.



Category : business

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