Analysis of the Best Trading Platforms for 2018
Are you planning to invest but you’re not sure exactly how to start? Thankfully, there are now online stocks trading sites that have made investing in stocks so much easier than before. With this platform, you can learn and invest even if you’re in the comfort of your own home. To help you decide on the best platforms to use as a beginner, Reviews.com has conducted an in-depth analysis of the best trading platforms for 2018.
What is a Trading Platform?
The trading platform allows traders and investors to place a trade and oversee their accounts using financial intermediaries. This software comes with different features, such as charting tools. Real-time quotes, news feeds, premium research, and many more. In some instances, the trading platforms are tailored for a specific market and have specific currencies, options, stocks, etc.
When deciding on the best trading platforms, it’s important to consider the fees involved as well as the different features that are available on a particular platform, whether you are looking for the best currency trading platforms, futures trading platforms, brokerage platforms, best trading platform for beginners, best electronic trading platforms or the best day trading platform. Day traders, including other short-term traders, may also come with features such as Level 2 quotes, as well as market maker depth charts. These are tools that assist traders with making the best decision, while option trading software have tools that were specifically designed to visualize different options strategies. Lower fares are often always preferable, although there are trade-offs that must be considered.
There are also specific trading platforms that are agnostic to a certain broker or intermediary, while some trading platforms are only used when working with a specific broker or intermediary. Therefore, it’s important that investors will investigate the reputation of the broker or intermediary before deciding to commit to a specific trading platform when it comes to executing trades and managing accounts.
How to Choose the Best Online Brokerage
When searching for a new online broker, you should choose something that can meet all of your specific needs as an investor. Do you consider low-cost trade commissions as something important? Do you prefer a broker that can provide the best customer service? Does the broker have a mobile trading platform, active platform, etc.? Although most brokers specialize in different areas, it’s important that you take time to evaluate and compare all the various possibilities.
Below is a list of some of the most important factors to keep in mind when choosing the best online brokerage:
- Trading Costs – When you’re online trading, you have to clearly understand what are the necessary costs needed to buy or sell. Most of the online brokers would often charge a flat rate for buying and selling. However, there are also miscellaneous day trading costs that you may need to pay for accessing market data and for routing fees, etc. If you’re investing in a retirement account, avoid a broker that will charge you for the annual IRA fees.
- Trading Tools – A common misconception that newer investors often have when it comes to trading is that lower trading cost is an important consideration. But this is not the case. Choosing a broker that has access to web-based or desktop-based trading platform or is using may be the best online trading software can certainly make a huge difference, especially when doing technical analysis.
- Investment Products – Do you plan on only trading stocks or are you also interested in mutual funds, futures, and Forex? In the US, different regulations are imposed on brokers supporting more complex asset classes. Aside from trading assets classes, getting access to online banking and a more advanced order type, including conditional orders, must also be given consideration.
- Mobile Trading – The ability to manage a stock brokerage account while on the go is also something that traders should consider, especially those who need to travel frequently. This option should be available for them to access using their smartphones. A lot of online brokerages have mobile trading apps, but not all are the same. The features would vary from one app to another.
- Customer Service – Having a customer service support 24/7 may be important for some investors, although others may just opt for the online chat support during regular hours. There are also some investors who are fine with sending an email and getting a response in a day. Remember that having access to customer support can certainly make your trading experience even better, especially in the event of a market crisis, such as the flash crash.
- Stock Analysis – Performing fundamental research is the key to a successful and long-term investing. Short interest, SEC filings, earnings growth, and corporate debt levels, are just some of the most important factors that you need to investigate when doing your research.
- Regulation – US-based stockbrokers that are governed by the United States are regulated by the SEC and must be a member of the SIPC and FINRA. The best way to verify if an online brokerage firms are regulated is by visiting their website and reading about the disclosures. You can also check with FINRA for verification.
- Banking Services – Remember that online brokerage accounts are not only limited to stock trading. Customers can also take advantage of several other services, such as banking services offered by a full-service brokerage. There are also some online brokers that offer savings accounts, checking accounts, credit cards, and other services if you have a deposit of $250,000, which is backed by the FDIC.
- Account Security – Luckily, the investors of today will not have to worry much about account security for as long as they choose a large and well-known brokerage firm, and above all, properly regulated. Nevertheless, make sure you choose the best online brokerage where the website is secured by an SSL encryption and that they should be storing client data in secure servers. Other security features that the site should have are Touch ID, dual authentication features, and several other security protocols.
- Order Execution – It’s important that you clearly understand how your order is being routed and executed. You should not make any mistake when it comes to this, and remember that there’s a wide variation between poor execution and quality execution. It’s unfortunate that most online stock traders are not able to tell the difference.
- International Trading – The stock market of the US is the most respected stock market in the world. If you’re from the United States and you are interested in trading internationally, or perhaps, you are based abroad, and you wanted to trade stocks through a US-regulated brokerage, you should do your research ahead of time and look for a broker that’s well capable of supporting your needs and requirements.
Some of the Best Trading Platforms
Ally Invest: Ideal for Cheap Trading
Ally Invest is on top of the list when it comes to a trading platform that has the cheapest option commissions, ideal for all types of investors, whether you are a beginner buy and hold trader, or a high net-worth individual. Although some brokers have dropped their commission to be competitive with Ally in 2017, Ally’s $4.95 flat rate is keeping it on edge, along with its zero-account minimum, which greatly entices active investors. While there are several other cheaper trades, the platform of Ally Invest and its resources still stands out, thanks to their quality tools, which includes access to its trader network.
E*Trade: One Best Trading Platforms for Beginners
If you’re new in trading and you need something that’s easy for you to learn, yet comes with endless opportunities to grow, the E*Trade is highly recommended. Its learning center is very educational, which includes articles, videos, and webinars, guiding users on the basics of trading. You will also be updated with the latest on investing news, as well as commentary and reports from their market analysts. It’s also free to book branch appointments. There’s also online chat support, as well as a 24-hour hotline so you will be guided when trading, regardless of where you are in the world. If you have plans to expand investing in the future, E*Trade can handle everything for you.
TD Ameritrade: Best Platform
TD Ameritrade provides the best-in-class platforms that are designed for two kinds of investors. The Trade Architect is ideal for beginners or those investors who prefer a simple and easy to learn interface, which can walk them through the process of ordering while explaining the potential strategies. On the other hand, Thinkorswim is a more powerful tool designed for the more advanced investors. This trading platform regularly receives awards and praises from customers for offering superior tools and excellent features.
OptionsHouse: Perfect for Active Traders
The OptionsHouse is the best platform for investors that have options focus and is no doubt, the best platform for active traders. Just like Ally Invest, the OptionsHouse is a long time leader when it comes to rock bottom pricing, starting with a flat trade commission rate of $4.95. Unlike the other brokerages that cater to active investors, OptionsHouse that does not require any account minimum and will not impose any inactivity fees.
Fidelity: Best Research and Tools
Fidelity is known for its quality and quantity of online investing and trading research. Thus, it’s great for DIY investors who wanted to unleash their potential in stocks trading. With research coming from more than 20 providers and with stellar execution, it’s not a surprise why Fidelity has been awarded in 2016 as the best overall online stock broker. Fidelity is not showing any sign of slowing down, and in fact, they have lowered their commissions in early 2017. This is a sign that they are looking to become an even bigger player as a discount broker.
What Are Options?
A type of derivative security, the options are referred to as derivative since their price is intrinsically linked to the overall price of something else. Options are contracts granting rights but with no obligations to purchase or sell certain assets at a set price, on or before a date. The right to make a purchase is called option, while the right to sell is known as a put option. People who are familiar with derivatives may not be able to see a difference between these definitions and don’t know what a forward or future contract does. Forward or future contracts confer both the right and the obligation to purchase or sell at a certain point in the future.
What is Forex?
The Foreign Exchange market is a marketplace where currencies are being traded. Currencies are very important for everyone, whether we realize it or not because we need to exchange currencies to do foreign trade and business. If you’re from the United States and would like to purchase cheese from France, either you or the company you’re buying the cheese from will need to acquire the cheese in Euros. Thus, the US importer needs to exchange his equivalent value of US dollars to Euros. This is also the same when you travel. A French tourist cannot pay Euros in Egypt when visiting the country to see the Great Pyramids since Euros is not locally accepted there. Therefore, the tourist must first exchange his or her Euros to the Egyptian pound, the country’s local currency.
Since exchanging foreign currencies is important, the Forex market is no doubt, the largest and the most liquid of all financial markets in the world. In fact, it dwarfs the other market regarding size, including the stock market, where there’s an average traded value of $2,000 billion every single day.
One of the unique aspects of Forex is that it does not have any central marketplace. Instead, currency trading is being done electronically, which means that all transactions are taking place in a computer network in between traders all over the world, instead of it taking place in a centralized exchange.
Forex is open 24 hours per day, 5 ½ days a week, and the currencies are traded all over the world through the major financial centers of New York, Tokyo, London, Hong Kong, Singapore, Sydney, Paris, across almost all time zones! This means that if the trading day already ends in the US, the Forex market will start anew in Hong Kong and Tokyo. Thus, Forex market is extremely active any moment of the pay and with price quotes changing rapidly.