Are you a new or experienced investor who’s in search of a better trading platform? It’s important to remember that online securities buying and selling is a service offered by companies, just like thousands of other service-based industries. When people decide it’s time, for whatever reason, to find a new dentist, barber, doctor, financial advisor, or auto mechanic, they go through a selection process. Maybe you’ve read online reviews of physicians and called their offices to see how the staff treats prospective patients. Or if you want to hire a roofer or painter, you do the due diligence and check out backgrounds, licenses, and client reviews.
Deciding where to do your market transactions is no different. Some service providers are better than others. That’s a given. But in addition to the good vs bad element, there’s the question about which platforms are a good fit for your style of trading. It’s obvious that day traders want and need different things than forex enthusiasts. The same goes for whatever your special niche happens to be, whether it’s tech stocks, precious metals, options, ETFs (exchange-traded funds), or something else. We all have our own set of needs, so it makes sense to know exactly what yours are. What should be your starting point for finding an online brokerage that suits you? Here’s a list of nine things to look for, ask about, and evaluate when you begin the due diligence phase of the decision process.
A Track Record and Good Reputation
Some excellent questions to ask are important. Does this broker have a good reputation within the industry and with clients? How long have they been around and what are their specialties, if any? Based on customer reviews and published data, is there some way to evaluate their success? What do their past users think about the pros and cons of using them? In today’s highly competitive market, another important consideration is how connected your new online brokerage platform is. Namely, is it a stand-alone company or is it part of a larger, more reputable organization. Some of the industry’s startups mean well but have no backing from a larger corporation.
Indicators and Apps
Investigate the bells and whistles that come with a standard account. What kinds of technical indicators will you have access to? Is there an educational resource within the site that helps newcomers learn how to use and understand indicators and apps? It’s one thing for a site to brag about its wealth of apps and technical metrics, but it’s quite another thing for them to help you get up to speed with those offerings.
Solid Customer Service
Get phone numbers and make direct calls to customer service reps. Have a list of standard questions about things like fees, commissions, and assisted trading. Even if you know the answers, ask anyway. This is an ideal way to see how the owner of the site deals with customer inquiries. For example, if it takes you 20 minutes of waiting to get to a real person, make a note of the fact. Alternatively, if your call is answered quickly and by a polite human being, you should note that as well. Everything makes a difference. What might seem like a pointless exercise today can reveal much about how your future requests are handled.
Mostly Positive Reviews
Make a shortlist of candidates based on all the factors mentioned above and screen those companies even more by reviews. Be careful, though. Online customer reviews can be tricky. Use only the top websites that post client feedback and avoid any sites that look suspicious, sponsored, or otherwise fishy. Once you come up with several dozen reviews, read them carefully. Avoid just checking how many stars the writer gave the site. There’s a lot of detail in well-written reviews, and it can guide your decision in multiple ways. For instance, you might read a Thinkorswim review that points out positive customer service and strong educational resources. If those two things are high on your priorities list, you’ve found something very useful and relevant for your search.
Ease of Use
Once you develop a shortlist and begin testing out actual sites, check to see how easy the platform is to use. Do you have to struggle to find pages and functions that you’ll be using frequently? Are the technical indicators located in a logical place, and do they come with a short description and information about how to place them on your charts? When you try to browse various pages on the site, is moving around a seamless, fast experience? This is a time to make some detailed notes about your impressions.
Test out the paper trading simulator. These practice apps are called by different names, so you might encounter practice bots, sims, or paper trading apps. They’re all proprietary or rented versions of simulators that allow you to buy and sell with fictitious money. But, as noted above, some are much more educational than others. On the low end of the spectrum, a few of the sims are downright frustrating. Do your homework so you won’t be surprised later on.
Mobile Trading Capability
In today’s fast-paced world, you’ll want to be able to purchase and sell securities at the click of a mouse, phone pad, laptop key, or tablet cursor. Mobile capability is essential for people on the go. Unless you intend to do 100 percent of your trading at home, be sure to find out about mobile transaction capabilities.
It’s not a requirement, but keep in mind that your needs might change as you develop new skills. Look for versatility in terms of what you can trade. Some sites only let customers buy and sell stocks, bonds, and options. That might be okay for now, but what if you decide to get into forex or commodities later on? Versatility is something to keep on your radar as you shop around.
Streaming Financial News
Streaming financial news is a very handy little add-on, and not every platform has it. Check to see not only if your intended site has it but who offers the feed. The financial news networks are ideal, but standard news is a good runner-up.