Learning how to trade is one of the best ways to grow an investment portfolio, for both short and long-term returns. Luckily for you, there’s no time like the present to start trading. With the competition growing stronger than ever between online brokers, they keep optimizing their platforms to provide better features at more appealing prices – and, you’ll be the one winning in all cases.
However, picking the right platform is about more than just choosing the lowest price or the best features. There are a few more factors you should take into consideration before settling on an online broker. If you’re not sure where to start, here’s a quick guide to help you out.
Identify Your Trading Style and Needs
Before you can find the right online broker, you should identify your trading style first. You need to know how you’ll be trading and what you’ll need throughout the process so you can start comparing between online brokers. Your style will vary significantly depending on your goals and intended learning curve. If you’re just getting started, you’ll want platforms that provide comprehensive guidance, such as educational resources, supporting staff, glossaries, and the ability to practice trading before you start using your actual money.
Narrow Down Brokers According to Features Provided
Once you’ve formed a clear idea of your style and needs, you can start researching online brokers. Make sure to categorize the list according to the features provided by each platform. As a novice trader, you should go for a beginner-friendly online platform that offers easy-to-use, features in a user-friendly interface. In his review at publicfinanceinternational.org/iq-option-review/, Ziga Breznik elaborates that IQ Option is one of the most popular platforms among beginners, as it includes a multi-chart layout, economic calendars, volatility alerts, technical analysis tools, and market updates. These are tools that both beginners and veterans need. Choosing a platform that gives you room for growth helps you ensure that you won’t outgrow the platform once you become more experienced.
Understand How Commissions Work
Out of the features offered by the online broker, the menu of investment is arguably the most important one. Most online brokers will offer a variety of investment options, including – but not limited to – bonds, mutual funds, exchange-traded funds, stocks, and options. The menu of investments offered by the broker will help you figure out if your needs will be met, but they’ll also give you an idea of the commissions you’ll have to pay. Make sure to fully understand the commissions you’ll have to pay with your preferred kind of investment before using the platform.
Figure Out the Fees and Account Minimums
You’ll likely have to pay a certain amount of fees with any online broker, but you can try to look for options where you minimize the fees you pay. You do so by choosing a broker that doesn’t charge these fees or avoiding the services that cost you extra. Meanwhile, look out for common fees like subscriptions, inactivity fees, service transfer fees, annual fees, or research and data fees. When it comes to account minimums, every platform will have its own rules. Some of the highest-ranking platforms allow you to start trading without any account minimum, while other demand a minimum investment so you can even access the platform.
Test out the Platform
While you can surf through different platforms to build a basic idea of the way the platforms operate, you won’t be able to fully evaluate the platform by merely taking a look. More often than not, the best way to make a decision is to test the product for yourself.
There are a lot of online brokers who offer a free trial phase, so be sure to take advantage of that to test out the platform. The free trial will mostly be limited to free and less advanced tools, but you probably need anything more advanced than that right now. On your trial phase, be sure to check out if the broker provides educational guidance and the kind of customer services provided.
Check the Ease of Depositing and Withdrawing Funds
You’ll also want to check the ease of depositing and withdrawing funds from the platform. While depositing may not be too difficult on most platforms, withdrawing money is not always easy. That becomes especially important in case you’ll be relying on trading for a regular source of income.
Finding a good online broker is one of the first steps toward becoming a successful trader. However, just because the reviews say that a certain broker is good doesn’t necessarily mean they’re right for you. You need to take your needs into consideration and look for an online broker that can satisfy them.