Once you develop an investment strategy the next step is to
choose a trading platform that gives you the best price and best research based
on your needs. If you plan to be an active trader the cheapest trade
commission/fees may be your best options. However, if you are a passive trader
that plans to invest in ETFs for the foreseeable future a trading platform
without commission on ETF’s and a trading platform without inactivity fees may
be best suited for your needs.
“As much as one online broker might seem much the same as
another at the most basic level, even a brief side-by-side comparison
illustrates the broad diversity in costs, benefits and requirements.
Some of these services ask for as much as $5,000 minimum to
open an account, on rare occasion even more. Others impose no minimum at all,
allowing you to dip your toes into the investment market with however much you
are comfortable risking.
Usually these brokers will look to recoup the difference in
investment size by charging more per trade. Meanwhile, some online brokers are
willing to offer you hundreds of free trades as you become accustomed to the
interface and the nature of trading.
Some services specialize in entirely different fields -
though the focus is usually on equities and direct investment in companies,
options, futures and other types of derivatives are a growing field of
investment even for comparatively casual traders.
Where you go, and even what you want to look for, will
depend entirely upon the strategy you develop for your investments before you
even start to really compare online brokers.
You should certainly look at what kinds of options you have
available, so that you can use different cost structures and requirements to
inform your investment strategy. But choosing a broker before you know how you
plan to use their services might leave you with a strategy you aren't actually
comfortable with, or a broker that's ill-suited to your strategy.
While it may take some research, investing your time now in
comparing brokers will save you grief when you're actually investing money.”
I recommend http://www.brokerage-review.com/
as a starting point for online brokerage comparison. Also, it is good to research fees for closing an account and transferring an account just in case you need to
switch brokers as your investment strategy changes or you need a different
trading platform to better fit your needs.
