Finding the right broker and a good trading platform on top of that is of crucial importance when it comes to brokerage. Making the wrong choice can land you in serious trouble. This article will help you understand the basic features of a trading platform and how to select a platform that best suits your needs.
What is a trading platform?
At its very core, it is simply a software interface that connects the trader and the broker. It also provides crucial information related to trading. Some of these platforms may be completely based online. This means that they will be accessible from almost anywhere. Most of these platforms are almost entirely free. A few of them, however, may charge a nominal fee for extra features like advanced statistics and graphs.
Now that we know what a trading platform is, let us understand the intricacies of picking the best trading platform.
#1 Understand all the terms and conditions:
Opening an account with a broker who offers cheap prices may not be the best option. There is always a trade-off at some point. For instance, there might be higher pricing when a take-profit order (limit order) is placed with the brokerage.
#2 Delve into other investing opportunities:
Stocks are not everything. Investing in a multitude of other stuff like debt securities (bonds), financial contracts that require the buyer or seller to buy or sell an asset respectively (futures), financial derivatives, etc. can be quite profitable. Check if the platform and online broker offer these options.
#3 Verify the responsiveness of your chosen platform:
The fluidity and security of the online platform always serve as a good metric to determine its worth. Make sure the website is secure by cross-checking if it has an SSL certification. If it is, there will be a ‘https://’ before the URL.
#4 Word-of-mouth:
It is still a reliable way of verifying if the platform is legitimate. Check to see if any of their previous clients had any issues with the brokerage or platform. Online forums are the best place to find these dissatisfied individuals. You will probably find them complaining about the sloppy interface or bad experience. Always remember to take these complaints into account; more often than not, they are legitimate guides to narrowing down on the perfect platform.
Learn to assess the required minimum deposit. Some brokerage firms will ask you to deposit exorbitant amounts that you cannot take back without incurring a penalty. Make sure you thoroughly understand the justification for high initial deposits before signing up for the firm’s services.
There are many other factors to consider before making the big choice. The platform that you choose and the brokerage firm should go hand-in-hand. There are many brokers in the market today, each claiming to offer lower commission cost than the other. A lot of your choices will depend on how experienced you are when it comes to trading. Perhaps you don’t need advice and tax tips unlike a novice in the field. You don’t always need to start with a full-service broker. Make an informed decision after carefully examining each of the points in the above list.
