Trading can become a good source of alternative income and investment opportunity for you. With the emergence of online stock brokers and brokerage sites, this has become easier to handle, particularly for newcomers. But it is essential to remember that you can make it profitable only if you get the right brokerage service.
It must match your personality, investment styles, and educational requirements. You should find it comfortable too to use.
You cannot predict whether you will get returns on your investment or not. But you can indeed make your journey effortless and smooth by picking the one prominent online stock brokers site that can serve your purpose well. Here you can learn a few tricks that can come in handy in your search.
Tips for selecting online stockbroking platforms
Identify your requirements
There is no shortage of qualified stock broking tools online. That’s why it becomes essential for you to understand why you would want to use a particular trading platform. Your knowledge, experience, and investment goals can play a critical role in decision-making. For example, if you are a newbie, you may want the site to offer you easy access to tutorials, glossaries, customer support, and trading practices.
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Similarly, your expectations may slightly change if you already have some prior experience with investing. Since you may want to actively pursue this investment, finding a platform that gives you expert insights and in-depth information along with all types of data can be sensible.
Furthermore, your expectations can shoot up if you are a seasoned player. You may have traded hundreds of times, but you want to switch to a new platform for a different reason. Now, you may desire to expand your portfolio by trying your luck with mutual funds, trade derivatives, bonds, and commodities along with stocks.
You can belong to any of this group. Hence, it’s essential to do an objective analysis of yourself and determine where you stand and where you want to reach. You have to decide what you want to do – day trading, passive investment, portfolio customization, or something else. You first need to dissect your habits deep and realize your goals. If you cannot decide, ask yourself these questions:
- Do I want to become a full-time investor?
- Am I a day or swing trader?
- Am I a DIY type of investor or need a more resourceful brokerage platform?
- In what kind of securities I want to invest?
Opt for the reputable online brokers
Once you get clarity about your investment requirements and needs, you can quickly decide which type of platform can provide you better services. However, since different features may be more meaningful for different people, you should focus your attention on some fundamental things. Here you will get a brief insight into them.
- Find out if the online broker is a member of The Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA).
- Check whether your choice of online trading platform deals in the certificate of deposit, checking or savings accounts, and money market accounts. If yes, then you also have to make sure that it has the backing from The Federal Deposit Insurance Corporation (FDIC).
- Inquire about the type of insurance cover they offer in case the company fails.
- Ask them how they handle frauds. Some companies offer reimbursements. So, you need to know beforehand what formalities you will have to perform to be eligible for one.
- Go through online reviews and ratings about their customer service, insurance coverage, and protection from frauds.
Choose the safe and secure online trading platform
Protecting your data should be the priority of the trading platform you select for your investment purposes. It cannot compromise with it at any cost. To understand how much a particular platform is safe to use, you can keep the following factors in mind while comparing your options:
- Two-step verification: This procedure involves an additional step other than setting the password. There can be a few security questions you may need to answer for account access, or you can get some codes through SMS or email for verification. It can be anything.
It deserves mention here that you should not use any platform that can share your information with advertisers or any other third-party.
Learn about their fee structure
Another critical consideration can be about how much you may need to pay for particular brokerage service. It is an essential factor because you don’t want to spend your investment returns on commissions or account fees. It is okay if a trading platform charges you some extra pennies for an exclusive or premium feature that is not available on other sites. Anyway, here are a few things that you can keep in mind while comparing your options based on accounting fees and additional charges.
- Do they ask for a minimum deposit amount?
- Do they charge maintenance fees per month or yearly?
- Can you get access to their platform for free?
- Do you have to pay more for advanced tools and resources?
- How much interest rate do they charge?
- What are their commission rates?
- How do they apply commission rates on different types of securities?
- Can you avail any trading discounts?
- Do they take extra money for advisory service?
All this can give you a clear view of what you can expect from them. Judging any choice on these parameters is crucial to make sure you don’t face any surprises or disappointments later. It is also necessary for the success of your investment endeavors.
When you finally come across a platform that suits your needs, just run your eyes through the range of its features and tools. Try some basic ones. It can reveal a lot about what you can get at the advanced level.