Online Trading Comparison, Choose The Best

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By: Anne Durrell

If you are planning to do any online trading, you will need access to large amounts of information on the stocks and indexes you are interested in. A good online trading site will allow you to buy and sell, but will offer more as well. It will help you to create a clear picture of the current state of the market. Before you get started investing, you need to do an online trading comparison to make the best choice.

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These are the factors that you should consider in your online trading comparison:
An online trading comparison of various sites will help you find which online stock broker is the best match for you. This is a big decision and made even more difficult because you are making it before you have enough experience to really appreciate which features and options will be most important and useful to the way you operate. The good news is that there are several very good brokers to choose from. If you limit your comparison to the most well known online stock trading companies you will be alright, because you will have enough resources to get started as a trader with any of them. But take the time to do an online trading comparison and you can select the very best match. This will improve the whole experience of online trading for you and hopefully keep you from having to go through the hassle of switching brokers down the road.

As a beginner, you will only need the basic trading tools. The more complicated features will only confuse you and can get you in over your head. Discount stock brokers, like E-Trade, Scot trade, or TD Ameritrade will offer you all the features you need with a minimum of fees that cut into your profits. Most fees for trading are set fees so if you are buying and selling small amounts they have a much bigger impact then later on when you are moving larger chunks of money. These discount brokers will cost you far less than the sites designed for experienced investors like Fidelity, Vanguard or Charles Schwab. Down the road you may be interested in opening an account with one of these companies if you are going to manage your own retirement account, manage large sums of cash in mutual funds or make other significant investments. At that point you will want to redo your online trading comparison.

• Cost per trade. Especially since you are apt to be investing small sums to begin with, large fees can really add up and cut into your earnings (or add to your losses).


• Introductory offers. Often you can find a site that is offering a certain number of free trades to new accounts. This is a nice perk, especially as you are apt to be more active right at the beginning as you establish a portfolio. But remember that this is only a temporary savings so this should be considered the least important aspect in your online trading comparison.


• Minimum account balance. You want to be able to start small so look for a site that offers no minimum balance or a very low one. Otherwise sites will charge a monthly maintenance fee if you have less than a specified amount invested and you can find that even though you initially invested more than the minimum, a loss can drive you under the mark and you will lose more each month in fees than you are making.

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