Best Online Trading Platform

What is a trading platform?

Best Online Trading Platform
Best Online Trading Platform

A trading platform is a software where traders and investors can manage their trade. These online trading platforms are offered primarily by brokers. In some cases, clients are given a free account or they may also give a discount provided that you maintain a certain number in your account.

When you search online, you will come across different trading platforms. They come with a wide range of features and tools that are very useful to traders. For instance, these trading platforms have news feeds, charting tools, real-time quotes, etc. Depending on where you will sign up, there are even trading platforms where you can get premium research. With these trading platforms, you get to trade curies, stocks, etc.

Differences Between Trading and Investing

Your choice of platform would actually depend on your goals. Investing and trading are actually different although you may often read content where these two are used interchangeably. Investing makes use of a different method where the goal is build wealth over a certain period of time. This is made possible through stocks, mutual funds, bonds.
On the other hand, trading involves frequent dealings like buying or selling of currency, stocks, and other financial instruments. The goal is to optimize rate of returns. For investors, a 10% to 15% yearly return may seem like a good deal. But for traders, they might want to get a 10% monthly return.

Tips When Choosing a Trading Platform

Run a search online and you see yourself browsing through different trading platforms offering you a wide range of tools and features. With so many options, how do you get to choose the best trading platform that best meets your needs?

Here are the things that you have to take into consideration when deciding which trading platform:

  1. Fees
    When signing up for a trading platform, you always have to take into consideration the fees. Some companies waive the signing free for as long as you maintain a funded account while there are companies where you have to pay for a fee. On top of that, you also have to shoulder some fees. For instance, you need to know about commission fees.
  2. Features and Tools
    The features and tools that you need in an online trading service platform would depend on the kind of trader you are. For day traders and those who consider themselves as day traders, they may need features to lie for instance Level 2 quotes. This type of quote is used to provide investors with price information. Level 1 only provides the best bid as well as the ask prices whereas the Level 2 provides the supply and demand of the price. In addition to these types of information, there are cases where users also need tools that enable them to visualize their options.
  3. Reputation of the Broker
    Since you will be putting your funds for trading, it is crucial that you take the time to research about the intermediary or the broker. Keep in mind that you will be trading online. For all you know, some of the companies that offer these trading platforms are not even legitimate to operate. There are so many shade operators and you wouldn’t want to get involved with them. Make sure that you take the time to research the company. Read reviews and conduct in-depth research to make sure that it is not a scam.

Steps to Find the Best Online Trading Platform

There are many various trading platforms that you can find online. Whether it is stocks or currency that you are trading, there will always be risks. It gets riskier if you choose the wrong online broker. That is why it is important that you find a trading platform that you can use efficiently and effectively in light with your investment objectives and goals as well as trading style.

There is no 100% guarantee when it comes to investment returns. But if you can find a good trading platform, it is definitely a good start.

Best Online Trading Platform
Best Online Trading Platform

Here’s a step by step guide in choosing the best trading platform.

  • Step 1: Know what you need.
    Before you even start browsing for trading platforms, take the time to know what kind of trader you are. What is the most essential feature for you in a trading platform? Do you consider yourself an active or a passive investor? Next thing you have to assess is your knowledge level. How much do you know? What specific kinds of trades do you want to have?
  • Step 2: Check if the trading company has the necessary permits and licensed as required by the government. If you are looking for a stockbroker, the brokerage firm should be a member of the SIPC or the Securities Investor Protection Corporation as well as the Financial Industry Regulatory Authority.
  • Step 3: You have to know what kind of account and security protection the trading platform offers you.
    All of the trades that you will execute will be conducted online. This also means that your financial transactions are also done online. You have to make sure that the company offers two-factor authentication. This is to make sure that your transactions and dealings are private and secured. In addition to this, you also need to know what technology they use to keep accounts safe. For instance, are they using encryption or cookies? The trading platform should be able to guarantee you with safety and security. Lastly, it should be clear that the company does not sell information of clients to third-parties.
  • Step 4: Get to know about the account offerings, fees, and trading commissions. Companies vary when it comes to the different tools and features that they offer to their clients. For example, there are some brokerage firms that may offer Education Savings Account or even a retirement account? Along with these, you need to know the fees that you have to pay.Will they be charging for a fee if you open an account? How about the minimum deposits? Keep in mind that most mutual funds require a min. deposit of $1,000. Not only that, there are also companies that require maintenance fees. This can either be a yearly or monthly annual fee.It is also crucial for you to know about trading commissions. How do they calculate the trading commission? Is it calculated based on how often you do the trade or the amount you have invested? What about the commission rates for different securities?
  • Step 5: How do they educate their clients? You cannot assume that everyone who decides to invest and trade and open an account is knowledgeable and has extensive experience. If you are a newbie, you cannot just start trading without any know-how. Your trading platform should provide you with resources and materials that will help you hone your trading skills. Trading platforms vary when it comes to this aspect. There are companies that offer comprehensive data and information that enable their clients to study the market and financial instruments and variables.

How to Be a Good Trader/Investor

To be a good trader, you cannot just rely on online tutorials. There are tons of educational resources that you can use. As with any other skill, it takes time and constant effort for you to become a good trader. Keep in mind that there are so many things that you have to consider in order to be a good trader.

First is you need to be an active trader. This means that after you have finally decided to open an account, you trade regularly. It does not matter where you buy or sell. After all, the decision is up to you. The next step is for you to be updated with what is going on in the market, the local, and global economy.

There are so many factors that affect trading. It is important that you identify these variables. By having a solid understanding of the market and economy, you can make your own forecasts. If you are able to make forecasts, you can make a wise decision.

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