Trading has continued to attract massive attention globally as more people join the financial market, a trend partly linked to the high earning potential. This growth has led to an increase in online broker accounts and trading platforms. There are more online brokers today, and as a trader, the onus is now on you to choose one that you feel ticks all the boxes.
An online broker can help you gain more experience and improve your investing strategy, which translates to more wins. An online broker can also make your trading journey more frustrating. How do you choose the best online broker?
Here are six things to consider when choosing a low-cost broker:
- Your investment goals
Are you interested in day trading or more advanced investment strategies? Or are you looking to establish a long-term retirement fund?
Knowing your investment goals will help you get an online broker who understands you as a trader and knows what you want to achieve. This ensures that the strategies will be more focused on your goals, making maximizing your profits easier.
Investments offered by the online broker will dictate two things: one of them is how much you will pay in commission. While you don’t want to overpay, you also don’t want a broker who doesn’t offer any commission, which makes market research important.
For the active trader, most people recommend choosing online brokers who offer a lower commission. If you don’t trade often or at all, however, then a lower commission could cost more in the long term because your trades would take longer and therefore cost more money per trade (because there’s no fee).
- Trading platforms
Some platforms are better for beginners, while others are for more advanced traders. Similarly, some platforms are better suited to day trading, others to swing trading, and some offer more tools/features and functionality than others.
When looking for a trading platform, it is better to look for a platform/firm that fits your needs and will help you grow and learn more about trading.
- Reliability and Security
Is the online broker/trading platform reliable and trustworthy? While the surge in popularity is a good nothing, it has also opened the financial market to many scams, especially online trading. Online trading makes it easy to get caught in a scam and lose all your investments.
To avoid all this, it is best to carefully check and read up on what each platform offers and its safety measures before deciding which one is best for you.
- Research tools and reports
Research tools will help you see what other people think of your broker and how you compare to others. They can also be used to determine how much commission you’ll pay and whether or not the broker offers any additional services or features.
- Ease of use
Lastly, how easy is it to navigate the platform? To trade well, you need a platform that is comfortable and easy to use. If you’re not comfortable with your investment options, or if it feels like too much work to get started, that’s no good for either party involved.
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