Trading Stock For Smarties
If you are a new trader or thinking about starting, you will compare online brokers in order to choose which one to open an account with. The good news is that you have a lot of very solid companies to look at with your broker comparison. The bad news is that they can all start to look alike. Each one promotes something good about itself, but that doesn't mean you can't get the same thing from another broker.
The way to cut through the clutter is to understand what a new trader should look for in an online stock broker. While there are many strong choices out there, some are just not geared toward new traders. Many of the features you hear about are designed to meet the needs of more experienced traders.
So what are the features that are most important to new traders for their broker comparison?
1. Trading Costs - This may be the most important for traders who are just starting. That is because a new trader will place small trades initially as they get started. There is a 100% difference between a $5.00 per trade broker and a $10.00 per trade broker. When you are making trades in the hundreds of dollars, that extra cost can make a difference between profit and loss. Especially when you consider that you will be charged two fees, one for buying the stock and one for selling it.
2. Service Quality - As a new trader, you might have to call on customer service more than an experienced trader. Compare brokers with this in mind to ensure you can get the support you need when you need it.
3. Educational Materials - This can be very important to a new trader. You could just learn as you trade, but you risk making some costly mistakes. It is best to combine small trades with a dedicated education effort in order to ramp up the learning curve quickly. Does the broker have a library of training materials, especially ones that cover Technical Analysis, which is the bread and butter of online trading?
These are the most important features for new traders to evaluate and should serve as the difference makers for beginners or those early in their trading career. All of the top brokers will perform well enough on the other features to satisfy the more basic needs of a new trader.
