Before you can start investing and trading your money, you will need to open a brokerage account. Once you place a trade order, the broker will execute that trade for you. There are many platforms competing for your business, so it’s essential to do your research. Consider the following factors:
- Are there any promotional deals being offered for you to join?
- Do they require minimum investment or are there service fees if you don’t?
- Does the platform provide real educational resources or can you find their research tool at any free sites like yahoo finance? Look for actionable information rather than an abundance of content. ASK THE BROKER IF THEY HAVE PROFESSIONAL TRADING SOFTWARE, THEY WILL PROVIDE THIS FREE OF CHARGE. I.E THINK OR SWIM FOR CHARLES SCHWAB.
- What other features do the brokers provide? Brokers are constantly updating features to the latest technology. For example, some provide alerts via SMS, while others only offer email alerts.
- Some less reputable brokers have higher slippage. For instance, when placing a market order to buy at the current price, one broker might secure a price of $47.20, whereas another might do so at $47.24. This $0.04 difference (slippage) multiplied by the number of shares and number of orders you place can make a significant impact.
- Certain brokerage accounts cater to advanced traders, providing minimal support and hand-holding at a reasonable cost, while others offer the opposite.
- App functionality (download their app and test it out).
Below are a few brokers worth considering. These have earned high marks, but new ones are constantly emerging, so do your own research as well:
- Ally
- Merrill Lynch
- E-Trade
- Charles Schwab
- Robinhood
REMEMBER NEW BROKERS ARE CONSTANTLY COMING UP…HOWEVER, CHECK OUT THIS BIG NAME BROKERS
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