Profitable investing requires a brokerage that matches your goals, and educational needs including access to trading courses, and learning styles. Choosing the best online stock broker can mean the difference between a new income stream and disappointment.
While investment returns can't be guaranteed, you can set yourself up for success by choosing the right online brokerage. In this guide, we'll cover everything you should look for in a brokerage, from the obvious to the not-so-obvious (like how easy it is to get support from an actual human when you need it).
What do you need from a Brokerage Account?
Before clicking on brokerage ads, decide what you want in a trading platform. The answer depends on your investment goals and learning curve.
If you're just starting out, you may prioritize basic educational resources, glossaries, easy access to support staff, and practice trades before playing with real money. If you have some investment experience, you may want more high-level education and opinion-based resources written by professional investors and analysts, as well as fundamental and technical data.
An experienced investor who has executed hundreds of trades will prioritize advanced charting, conditional order options, and the ability to trade derivatives, mutual funds, commodities, and fixed-income securities in addition to stocks.
Be honest about your investing status and goals. Do you want to build a retirement fund with tax-free passive investments in an IRA or 401(k)? Want to day-trade but don't know how? Do you want to tweak and tailor your own portfolio or hire a pro?
Depending on your path, you may need to answer more questions as you gain experience and refine your goals. Start with these four factors to determine which brokerage features are most important to you.
I've included sample questions under each topic to help you get started.
Active or passive?
Want to trade day or swing? Do you plan to become a full-time investor? Do you want long-term investments with little or no day-to-day involvement?
How will you trade?
Do you need a platform that makes it easy and quick to execute trades, or do you want a broker with a broader range of resources to help you identify opportunities? What securities do you favor? Stocks, MFs, ETFs? Want to trade options, futures, and fixed-income securities if you're advanced? Margin trading... Need conditional orders, extended hours, and automated trading?
Do you need support or mentorship?
Do you want to DIY, interpret charts and financial data to find and execute trades, or hire a pro? How far along the DIY learning curve are you? What knowledge-building resources do you need? Do you need easy access to support staff, or can you learn online? Will you execute trades online or call for help?
Investing Goals?
Why invest? Are you trying to boost your standard of living? Want to fund a particular event or expense? Will this be your main source of income? Do you already have a retirement account or will you open one with your chosen brokerage?
Trading Platform vs. app
Don't confuse a full trading platform with live customer support with a simple smartphone app. Due to its solid network and programmed infrastructure, a true trading platform must remain stable during market volatility.
An app-based "trading platform" often crashes during volatile periods, at the worst times. Active traders can't risk system failures with trading apps, but passive investors can. Serious traders need confidence that their armor will deflect outages. Trading apps offer basic functionality, not the tools traders need to perform well.
Trading Platform features
Stability and expert customer service protect you from structural and mechanical disruptions. The offensive component allows traders to spot opportunities, react quickly, and execute with few wasted movements. High-quality trading platforms feature tools that help traders make decisions (i.e., interpret price action) and react with conviction. These features are essential:
Speed is a cumulative effect generated from efficient and seamless functionality. High-quality trading platforms are built for traders. Easy layout positioning of data windows, programmable hot keys, and low latency quotes, charts, news, and signal generation.
All platforms are reliable until outliers occur. A reliable trading platform is less likely to have network, data, or trade execution issues. Access to timely, live customer support is crucial. Zero-commission trading-app platforms are known for multi-day e-mail-only customer service outsourced to virtual call centers with clueless reps reading pre-written templates.
Traders need the ability to customize layouts and windows. Every trader has their own preferences for enhancing speed and efficiency. Multi-layout configuration, linking windows, programmable hot keys, and routing preferences are required. Platforms must be flexible to accommodate traders' preferences.
Trading Charts
Price action, pattern set-ups, triggers, and signals are best interpreted using charts, and advanced pre and post-market charting is required. Seasoned traders rely on basic indicators, but their platforms should let them customize and configure them and set alerts when specific prices or patterns trigger.
Easy-to-use Trading Tools
User-friendly means placing an order or closing a trade is easy. One-click trading and stop-loss, limit, and other order types are advantages. User-friendly navigation is also important. If a platform offers additional charts and tools, they should be easy to use and optimized for opening multiple graphs at once.
Trading Platform Fees
If the stocks and assets you invest in perform well, high platform fees could erode your returns so comparing fees for online share trading platforms is important. Full-service brokerage platforms may charge more than $20 per trade, but brokerage fees and structures vary. Fail fees, ongoing fees, off-market transfer fees, SRN fees, and phone brokerage fees are less common than trading fees. Some online share trading platforms have multiple fee-varying products so before choosing an online share trading platform, do your research.
Recommended Trading Platforms
eToro - Long Term Trading Platform
eToro is a modern broker that allows multiple share investments and lets you buy shares commission-free, trade CFDs, and open and close positions for currencies, stocks, cryptocurrencies, and ETFs.eToro's user-friendly interface is licensed by the FCA, ASIC, and CySec.
TD365 - Day Trading Platform
The TD365 day trading platform is intuitive, efficient, and user-friendly without unnecessary clutter and it executes trades quickly, reliably, and cheaply. TD365 provides exceptional value to traders and is regarded as one of the best-value CFD providers available. TD365 is regulated by the globally renowned SCB governing body.
Disclaimer: eToro is a multi-asset platform that offers both investing in stocks and crypto assets, as well as trading CFDs. Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not an indication of future results. Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.