Some people perform their trading activities directly using an online broker, while others prefer to consult financial advisors from the banks. When you are still a neophyte, you should consider self-studying.
In this way, you will learn how to execute buy and sell activities in the market. If you can understand the concepts, you can proceed with the demo market. Once you understand how the prices, volume, graphs, trends, and participants work, you may now start trading or investing in the live market.
If you want to know how to choose the best online broker, you must consider several factors first, before applying for an account.
Key Factors to Consider in Choosing an Online Broker Platform
1. How much is your capital?
For every online broker, there is a required minimum capital that you need to deposit. For example, you can invest for a small amount of $200 for first timers based on the eToro broker review.
Also, you must consider setting a tolerable amount for yourself. Meaning, the money you will invest is the amount of money you are willing to give up.
Online trading and investing are business activities hence, just like in a traditional business, you need to understand the possibilities of making a profit and incurring some losses.
2. Do you have knowledge or background about the Stock Market?
As mentioned in the introductory part, you need to invest first in your knowledge before investing money in stocks. You must understand the trend, volume, prices, news, economics, government, and market sentiment. You should analyze the connection of all these things first so that you will appreciate the flow of the market transactions.
If you are a newbie, you can refer to CMC Markets or IG Markets because these trading platforms have the most comprehensive demo account details among the other online brokers. You may also watch several YouTubers who specialize in stocks or cryptocurrencies.
3. What do you want to do in the market?
Before you apply for an online trading account, you must understand your goal first. Will you purse as an trader or investor? The main difference between the two is the timing of the acquisition and sale of the shares.
Generally, you are an investor if you wish to hold the shares for a long-term basis. A long-term is a period of a year to several years. If your capital is small, this approach may not be suitable for you. This investment is best for people who have large capital since they can also receive dividends relevant to their held shares.
Whereas a short-term pertains to a less than a year activity. You can position your trades on a given timeframe and wait for the shares to gain profits within the next minutes, hours, days, or weeks. Short-term trading is a great opportunity for small capital participants, but it is riskier than investing.
4. Deposits and Withdrawal Procedures
Time is essential when it comes to trading and investing in a stock market. Your online broker must be able to fund your account successfully and promptly. In this way, you can be able to capture the best price available in the market. You do not need to wait for a day or weeks before the money comes into your account.
5. User-friendly Functionalities
If you are a beginner, you must choose a trading platform with easy-to-understand functionalities and features. You might feel overwhelmed if you see various figures, lines, and charts on your screen. In this way, you will have an idea of how the system works.
You may request a 7-day trial account so that you can navigate the dashboard and learn how to generate the reports. Once you get familiarize with the dashboard and reports, it will be easier for you to read and analyze the data regardless of the platform.
6. Speed and Security Features
If you are engaging with trading rather than investing, you may encounter several times when a stock reaches its ceiling price, your screen may slow down or freeze due to the quick and enormous volume of the trades.
If you want to experience quality service, you should look for a platform that provides great speed regardless of the trend. It must also have an offline hour’s execution so that you can plan your trades.
When it comes to security, you should choose a trading platform that asks for a two-step authentication feature. Aside from that, the online broker dashboard must have an automatic cut loss point if ever your trading patterns show unfavorable results. In this way, it will not cause a tremendous impact and capital losses on your part.
7. Customer Support Services
As a customer, you will feel valued and appreciated if their support service can return to your emails or calls within 24 hours. Since we are talking about trading and investments, this kind of business involves a lot of money. With this regard, it is very important to know if their customer support can handle your questions and requests as soon as possible.
Are you ready to invest or trade now?
Now you know the basics, you can now choose the best online broker for your business. Apart from the factors above, you need to compare their starting capital requirements, broker’s commissions and fees, and their dashboard. By checking all these considerations, you can select the appropriate trading platform based on your preference. Always remember, you must trade at your own risk.