Ultimate Broker Guide – How to Trade Online
The ultimate broker guide will tackle the key concepts and features you need to look for when choosing your favorite online trading broker. We’re also going to give you a list of the best brokers for all markets, to make your job will be easier.
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If you want to get involved in the financial markets, be it the stock market or the Forex market or maybe you want to trade options, you will need an online broker to give you access to the markets. You’ll be the boss and you’ll be the one giving instructions to the broker what to buy and sell for you.
As a novice trader, it can be quite terrifying to choose the right trading broker. When picking up a trading broker we need to make sure that we find the good guys from amongst all of the bad boys out there. The first step you need to take is to educate yourself on how to find top trading brokers.
And, our ultimate broker guide is here to help you out through this journey.
Top Trading Brokers – How to Choose a Broker
The first question you need to answer is what products or financial instruments you want to trade? Stocks, Forex Currencies, Options, Commodities, or Futures?
Even if you want to trade a mix of financial instruments, there are online trading brokers out there that can satisfy all your needs. You just need to dedicate a little bit of your time and do some research to find the top trading brokers.
The second most important thing you need to look out for is for your favorite trading broker to have the proper regulation. If you want capital protection and assurance then you need to check if your broker is licensed by a governmental regulatory body.
Our team recommends that you only look for trading brokers that are regulated in developed economies like the UK and the USA.
The third most important thing to look out for in your quest for the right trading broker is the minimum deposit required to open a trading account and the fees. Now, each online trading broker has its own minimum deposit for opening an account with them.
Some brokers will require a minimum of $10 to open a trading account, which is the case for some Forex brokers. However, some institutional brokers may require a minimum deposit of $25,000 or a couple of $100,000s.
Last but not least, you need an easy to use broker trading platform. Make sure your favorite online trading broker has all the tools and top technical indicators that you need to run your trading strategy.
Although we try to stay impartial and not recommend what trading broker to use, we’re going to give you a list of the best brokers for all markets from where you can pick one.
Top Forex Trading Brokers
Let’s start the ultimate broker guide with the top Forex trading brokers. We used the guidelines presented in the previous section to pick our top 3 Forex brokers. We can’t stress enough the importance of doing your own due diligence, as we can’t guarantee we have factored in all the pros and cons.
In the Forex landscape, there are some brokers that make their money by trading against their clients. Basically, they are taking the other side of your trade. When that happens there’s a conflict of interest as they make money when you lose and when you win they lose.
There is a saying “The house always wins,” so make sure you do your own due diligence when choosing a Forex broker. If you pick a bad Forex trading broker, you can have liquidity issues, slippages, and delays in transacting trades.
Forex Broker #1: Forex.com
Forex.com is the largest US Forex broker with the highest number of retail traders and daily trading volume. They are based in New York and offer their service to both institutional and retail clients. The individual trader can get support not only through email and live chat but also through phone calls that are open around the clock.
If you’re a novice trader they have a basic course that is pretty in-depth and it will teach you different things about the FX market. You can open an account with them with as minimum as $250 and use a leverage of 1:50.
Forex Broker #2: Oanda
Oanda is the second choice you have as a US Forex trader. Oanda is a Forex broker that’s a pioneer in online Forex trading. It has been around for several years since 1996 and it has offices around the world. Oanda is also highly regulated by the NFA and CFTC.
Unlike other online Forex trading brokers, Oanda doesn’t have any minimum deposit or minimum position size. You can trade through Oanda a wide variety of instruments like currencies, metals, commodity CFDs, stock CFDs, etc.
Next, we’re going to discuss what your top options are when it comes to stock trading brokers.
Top Stock Trading Brokers
The US is the top place for stock brokers. We’re going to outline the best online stock brokers that offer the most value for your portfolio.
Stock Trading Broker #1: TD Ameritrade
TD Ameritrade is one of the best choices for online stock trading. TD Ameritrade is suitable for long-term trading as well as for day trading stocks. We had personal experience with TD Ameritrade and they are fairly good. Since there is no such thing as a perfect broker, they are trying to improve their trading platform and make it quicker.
The TD Ameritrade platform is not that intuitive so you’ll need some time before you can get used to it. They need to simplify their trading stock platform to attract the newbie traders.
Stock Trading Broker #2: Interactive Brokers
Interactive brokers are listed on IEX and it’s highly rated by its clients solely because of the quality of its services. It has competitive low fees and offers its clients direct market access to not only stocks, but also options, futures, fixed income, Forex, ETFs trading, and other financial instruments.
Interactive Brokers have also been in business since 1977, offering institutional solutions for professional traders. Their flagship trading platform TWS is designed for active traders and includes all the trading tools you need to successfully trade the markets.
Let’s now see what choices you have when it comes to online options trading.
Top Options Trading Broker
If you’re looking to trade options, it’s mandatory to choose a Broker that caters towards options trading. Options trading brokers have specific capabilities. Here we’re going to outline the top trading brokers for options trading.
Options Trading Broker #1: E*TRADE
Overall, ETrade is among the best options trading brokers in 2018. Options trading has become extremely popular in the past decade and as a retail trader, ETrade is among the top trading brokers you can pick. ETrade was founded in 1982, so it’s a well-established company with strong financial numbers.
You can find a ton of reviews about E*TRADE on the internet. But, here is what you really need to know about them.
Etrade has some of the best options-based trading tools available on the market. You have complex order types that will help you implement the most advanced options strategies. The bottom line is that Etrade offers you great options tools but you need to know how to use them.
Options Trading Broker #2: Charles Schwab
Charles Schwab is another established brand that has unique features and functionalities. The options base fee is around $4.95, which is one of the lowest fees you can find in this business. Charles Schwab also comes with high-quality researches and various services that can help you better understand the options space.
The minimum investment requirement is low, so it’s more accessible for the retail options trader. Besides the basic web-based platform, you can also have the option to opt for the other two robust trading platforms that they offer.
Conclusion – Best Brokers for all Markets
The ultimate broker guide provides you with objective and independent research to help people better understand what the best brokers for all markets are. We spent over 10 hours reviewing the top trading brokers before selecting the best for our trading community.
As a general rule, you should never leave all your money and your savings in your trading account. Only the amount that you need to trade. Nothing in life is guaranteed and no matter what level of protection you get, and how secure is your broker, bad things still can happen.
If you have any specific broker in mind and you just want a second opinion on them please leave a comment below. One of the TSG team members will try to give his subjective opinion. In the end, it should be your own decision.
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Don't forget to read the beginner's guide - What is The Best Trading Strategy To Earn A Living (Updated 2019).
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