Advertise with Us

Bookmark and Share

How To Find The Best Online Trading Broker

Online trading brokers have an important role to play when you open an online trading account. Each broker can offer different services and features. You must research all the online brokers to find the best broker to meet your needs. Here are some tips to ensure that you find the best online trading broker for your investment needs.

What are the brokerage rates being charged?

Brokerage rate is the rate at which you are charged for buying or selling shares or stocks through your online account. These rates are usually charged based on a sliding scale. The more units you purchase in a single transaction, the less the "cost per unit" you will pay. The exact sliding scale can vary and may sometimes be negotiable for larger purchases. Compare each online trading broker and read the fine print within contracts. Pick the one that best meets your buying and selling style.

Are there any hidden account fees?

Make sure you examine if there are any hidden fees in account contracts within the terms and conditions. For instance some brokers may require an extra $10 to transfer money out of an account "quickly" as against withdrawing money normally. This is not a fair fee, bust just a way to make some extra money. All fees should be listed by the broker in the terms and conditions listed in opening an account.

Is there a backup phone service?

Computers and the internet are notorious for breaking down. Online services can go down during crucial trading periods. Interruptions to broadband services, power outages and computer problems can stop you from accessing information you need at critical points. This is why you must have phone access to your online trading broker. Do not even consider using an online broker if they do not provide phone access.

Do you have access to your money?

It is always better to have instant access to your money even though it is held in a cash account by the online trading broker. Most brokers will have a cash account facility that is linked to your trading account. Your account could be linked to a MasterCard account, so you can access that money anytime through any ATM or make purchases as you would normally using a MasterCard. Don't be misled into thinking you must only have a separate cash holding account with the online trading broker. There are lots of options open to you as a client and good online brokers will provide several options for your cash holding account.

What are the extra benefits being offered?

Look for online trading brokers that give you extra incentives to open an account with them. Such as a limited free brokerage period or free reports on the markets you are interested in. These bonus offers can help you getting you account established and setup a profitable online trading account.

Is the broker’s website user friendly?

One very important factor is to consider the ease by which you can trade using the web sites of a brokerage firm, because if the web pages are very hard to navigate and are very confusing, you will be more prone to making mistakes. You also need to be comfortable with the platform the broker uses and ensure that it's reliable and you have 24 hour support. In most cases, a broker will let you test drive the trading platform and you can see how you get on with it with a demo trading account before risking real money.

It would also be a good idea to pick an online trading broker that you can get in touch with apart from the Internet, as this will allow you to talk to your broker and get more personalized services. Remember to research on a broker that you are considering so that you can get a feel of how they take care of clients; one good source of this research is from their other clients.

Can they offer “Execution Only” services?

If you are interested in day trading and want a day trading broker, you want them to transact orders only and don't want advice. Many brokers will offer you signals and alerts and advice - don't fall for it. If brokers could make money they would be traders and not brokers. If you want to be successful in trading then you need to do it on your own - only you can give yourself success.

Is the broker well established and have a good security record?

Look for financially secure online trading brokers that have been in business for a few years, are stable and look at regulation and protection of your money. Bigger is better when you are using a broker on an execution only basis.

You want a broker that has been known for reliability over the years and you can easily check this by looking on the web. You should always search the brokers name and check any good and bad press they have. In many instances you will surprised at what you find.

When choosing an online trading broker, check the above points and keep in mind that your major cost is your transaction fee and this should be as low as possible. Do your research, don’t be afraid to ask questions and select the online trading broker who can offer you the service that best meets your needs.