How To Choose The Right Online Broker

Online trading platforms are expected to provide convenience while also meeting your investment needs. Here are some factors to be considered before making a choice on the platform to use.

There is so much that can be done from the comfort of our beds in today’s world. We can shop from virtually anywhere in the world, earn money from freelance jobs, meet people, and so on.

Thanks to the availability of online brokers, we can also invest our funds towards growing our wealth from the comfort of our homes. While online brokers offer the same services as actual brokerage firms - at relatively smaller cost to the investor - there is no gainsaying the fact that investors need to take precautions to ensure that they make use of only the best platforms and their investments are safe and real.

In choosing what platform to buy or sell stock from, here are some of the top considerations to keep in mind.

Your Investment Need

A good trading platform would have different products for the investor’s different investing goals. Typically, online brokers have a wide range of product offerings just like normal brokerage firms.

From stocks to bonds or mutual funds, the investor has to determine whether the online platform can align with his investment needs.

Security

Security is a big deal wherever money is concerned. As such, the safety of your investment is a top consideration in choosing an online broker. Does the company have a form of protection against fraud?

Is there a form of insurance should any form of fraud or loss occur? How fast do security measures kick in? You have to know.

Customer Service

Platforms have different ways they provide assistance. Some have live customer service individuals ready to offer help as soon as you need it. For others, the process of contacting them is a little tighter. It is important to review what customers are saying in this regard. Keep your head on the ground for reviews.

Commissions

Whether we like it or not, this is one of the factors being considered.

Brokers typically charge differently depending on the kind of security being traded. For example, trading stocks generally cost more than options or bonds.

Platforms also charge differently, so it is normal to compare prices before getting signed up. It is also important to watch out for account fees as brokers would normally charge for transferring funds or closing your account.

Account Minimums

While some platforms allow you to trade in quantities that are most comfortable for you, some others require a minimum initial investment. Depending on your investment threshold, this may or may not matter but it is always important to know first.

Complexity Of The Platform

It is counterproductive to sign up on a trading platform having a complex user interface. The idea behind using an online broker is to make your life easier and if you are going to struggle through every investment, it is probably not worth it. It is advisable to start with a simple platform and when your demands and knowledge increases, you can now try something with more complex add-ons.

Education

One of the benefits of using a stock broker is the additional information or knowledge you get from him or her. In the same vein, a good trading platform should be able to educate the investor. For one, it should be able to show you how to properly navigate the platform to meet your needs effectively and it should also show you how to interpret data.

You also want to check if there is sufficient relevant data available and how well they are displayed. An example of this is the historical data of a company that you could potentially invest in. this should be one of the factors that guide your investment.

With these things guiding your choice, you are sure to enjoy your trading experience.

Written by Lawretta Egba.