How to Choose an Online Stock Broker

By October 30, 2018Trader Tips, trading
How to Choose an Online Stock Broker

How to Choose an Online Stock Broker

When it comes to day trading, pretty much all you need to get started is a laptop, an internet connection, and an online stock broker.

In this day and age, most of us have the former two on lock. But as for the online stock broker … which one should you choose?

Your broker is the gateway to executing trades, so it’s important to take the time to choose one that suits your personal trading needs so that you can maximize every trade.

This post will educate you on some of the things to look for in potential online stock brokers, and how to narrow down your choices.  

What Is an Online Stock Broker?

An online stock broker is a web-based broker that facilitates trades.

At one time, your options were limited in terms of online stock brokers. These days, however, there are many different options out there, from brokerages associated with big banks to purely web-based ones.

While the variety is a good thing overall, it can make the decision more difficult because there are many more contenders for your account.

How to Choose an Online Stock Broker

How can you narrow down the many choices available so that you can figure out which broker is just right for you? While the answer is ultimately up to you, these considerations can help you make an educated decision:

What are your goals?

Before you settle on an online broker, take a little time to consider your individual goals as an investor.

Not only can clear goals provide motivation, but they can help you decide on the best approach for trading and a broker.

For instance, if your goal is to save for retirement, you may have different needs than if you want to buy a car in the next year. Assessing the aggressiveness and frequency with which you’ll be trading can help you determine which broker is the best fit.

What’s the account minimum?

Be sure to look at what minimums are required to open an account with various brokers.

These days, many online stock brokers have no required minimum to open an account. This is great for new traders who are starting out with fairly small accounts.

However, others may require as much as $10,000 as a starting account balance. Obviously, depending on the account size you want to get started with, this can take some brokers off the table from the start.

Recently, StocksToTrade incorporated broker integration, so you can execute trades right from the platform. As a limited-time promotion, traders can open an account with Tradier with just a $500 minimum account requirement! This is for a limited time, and it’s exclusive to STT members!

Are there trade commissions or fees?

It’s not uncommon for brokers to charge commissions or fees on trades. However, you want to make sure to research what these fees are before you sign up.

For example, at the time of this writing, popular brokers Ally Invest and E-Trade both charge commission fees of $6.95 per trade. This is charged upon buying or selling.

Other brokers, like Robinhood (soon compatible with StocksToTrade), don’t charge a transaction fee on trades. However, this doesn’t mean that everything is free.

Robinhood Stock Trading App

As their website says, “there are fees charged by the U.S. Securities & Exchange Commission and FINRA on all sell orders.” So while Robinhood won’t be charging their own fee, they will charge the amount required by these regulatory agencies.

Are there other account-related fees?

Be sure to dig a little deeper than just commissions and per-trade fees. While a broker might seem like they have a very reasonable fee structure, sometimes there can be hidden costs that can add up over time.

For instance, some accounts will have a yearly fee, or may charge if you dip below a certain balance, or if you are inactive for a period of time. There may even be a closing fee on some accounts.

Be sure to research any account fees like this from the beginning, rather than being surprised by them later. You don’t want to lose money due to unforeseen fees.

Is it available in your country?

If you’re not in the U.S., can you still use an online broker? Absolutely. Interactive Brokers is available to non-U.S. members, and it’s compatible with StocksToTrade.

Do they have stock analysis tools?

Some brokers offer stock analysis tools for free. Others offer them for a fee. And others have minimal resources for analysis.

If you are a member of StocksToTrade, this may not be as big of a consideration, because you already have a thorough platform to perform analysis and you may not need this feature as much.

So, for instance, if you already have the analysis tools via StocksToTrade, you might be able to choose a broker with fewer analysis tools if you like their other offerings.

Consider customer service.

If you have an issue or an inquiry, how easy is it to get in touch with the customer service department?

Researching the customer service offerings is something that many traders overlook when opening accounts, but that can prove very frustrating later on when you find yourself in need of assistance.

Consider calling the customer service department before opening an account to ask any outstanding questions. It can be very informative!

Ask around.

There’s nothing like a person-to-person review. Read online reviews and ask other traders their thoughts on various brokers.

Chances are, you’ll find out some invaluable information this way that can confirm the brokerage you’re leaning toward, or alert you of potential red flags.

Conclusion:

Choosing an online stock broker should not be taken lightly. The right broker can help you make the most of every trade, which can help you get ahead over time. It’s worth your time and research to make sure you find an online stock broker that’s well suited to your needs.

Big News!

StocksToTrade has established itself as a premier platform to help you choose the best stocks to trade, but now it’s even better.

We’re proud to introduce one of our most exciting developments yet: broker integration! Now, you can research, plan, AND execute a trade all on one platform.

Try StocksToTrade for 7 Full Days for just $7.00!  StocksToTrade was built by traders for traders. Cut the amount of time, stress, and anxiety you experience behind the keyboard and only deal with the handful of real trade opportunities daily. Find the stocks that matter!

The STT scanners do the work for you, navigating through the market based on your imported watchlists. Then, when STT alerts you of a potential trade that meets all your criteria, instead of clicking over to a separate broker page, you can take action right from the platform!

It’s time to simplify your trading process. The new, updated StocksToTrade is compatible with a variety of different brokers — see if your brokers made the cut.

Looking for a New Broker?

More great news: We’ve teamed up with Tradier to offer StocksToTrade members a sweet deal: unlimited trades for just $14.99/month, with a $500 account minimum*. Boom.

Your success is important to us. With such a low monthly fee and unlimited trades, you’re practically covering the data service fee included in your subscription to our platform!

See if Tradier fits your trading needs.

*Offer only available through your StocksToTrade application. Brokerage service provided by Tradier Brokerage Inc. (“TBI). TBI does not offer OTC Markets or OTC-BB trading

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