The number of online traders has been rising at an insane rate in the last few years. Thanks to the increase in brokers and convenient apps like Robinhood, trading is no longer exclusive to Wall Street professionals alone.
But as you plan to get into this interesting and high-risk venture, it’s important that you take the right steps and lay a good foundation. This starts by choosing the right trading platform.
There are hundreds of these platforms online, but only a handful of them are good enough to meet most people’s needs. So how do you choose the right online platform for trading? Here is how:
1. Know Your Needs
It’s imperative to know what you want before you start signing up on different trading platforms. Understanding your investment needs helps narrow down your brokerage options.
Unfortunately, you can only know what you need if you have some knowledge or experience in trading. This means intermediate and advanced traders will have an easier time identifying their trading requirements than newbies.
So what should beginners do? Well, the most important thing is admitting that you still have some learning to do and looking for a platform that can facilitate this learning. Luckily, many trading platforms allow you to create a demo account that you can learn and practice with before moving to live to trade. Therefore, a platform that has an excellent demo account should be a priority to you.
As for the experienced traders, identifying the securities you want to trade and the advanced features you love using makes it easier to find a broker that meets your needs.
2. Look For A Platform With A User-friendly Interface
A user-friendly platform is helpful to both beginner and advanced traders. You want a platform that you can open and close a trade in a few clicks. You want an interface that allows you to access all the analysis tools with ease. Something that makes understanding the analysis easy.
The responsiveness of a platform is also crucial. You don’t want to be frustrated mid-trading by a tool that won’t show the graphs you want. A good platform lets you review fundamental and market data with ease.
Trading should feel seamless, so don’t settle for any platform that leaves you struggling.
3. Look For Extra Features
Features are very important, especially for advanced and aggressive traders. Beginners may get away with basic platforms that don’t provide certain tools. However, if you want a platform that can meet your requirements as your trading skills and needs advance, start the journey with an already brilliant broker.
There are several key features to look for here. One, customization of watchlists and alerts is vital. This will deliver real-time alerts to your inbox, helping you stay on top of your trades.
Good platforms also provide highly customizable screeners that you can use to locate securities you are interested in, like ETFs, stocks, and mutual funds.
Check the charting features available. And besides the basic technical indicators like MACD, Bollinger bands, volume, stochastics, and RSI, what other advanced indicators do they provide? Do they let you compare indices and stocks on the same chart?
These features may seem overwhelming to beginners but interacting with them at an early stage makes it even easier to master how trading works.
4. Check The Fees
You must calculate the trading commissions and accounting fees before opening an account. You cannot avoid charges completely, but you can minimize them.
Make sure you ask the broker to disclose all fees. Do they charge monthly or annual maintenance fees?
It’s okay to start with a cheaper broker with fewer features if your budget is too low.
5. Security
Security is crucial for obvious reasons. So ask about the security measures put in place to protect your personal information. For example, whether they have two-factor authentication and inquire about their cookies policy and whether they share user’s data with third parties.
6. Customer Support
Don’t overlook the importance of prompt customer support. The best broker should have staff available to assist you whenever you are stuck. This is even more critical when you are struggling with technical issues
By no means is the above list exhaustive, but it should give you an idea of the basics you need. The information is a lot, and it can feel overwhelming, especially to newbies, but you must get it correctly to start your trading career on the right foot. You are also free to speak directly to the brokers and let them explain what makes them special.
