Choosing an Online Stock Broker

Stock Trading for Beginners - Choosing an Online Stock Broker

The first thing beginners to online stock trading will need to do is to find an online broker. There are dozens of online brokers out there but in my humble opinion you would do well to steer clear of TD Waterhouse. I found them very unreliable. Just my personal opinion but that's what makes a company's good or bad reputation, personal recommendations.

Nowadays all online brokers provide you with the data and tools you need to make informed decisions, if they don't then you shouldn't be with them. These tools include realtime quotes, realtime trades, realtime charts, streaming news, educational materials. There stock trading platform also needs to be easy to understand and use.

Bear in mind also that many brokers are adding cell phone features to their list of features. If this is important to you then choose a broker that offers this.

Features to Look for in an Online Broker

First off, your online broker's fees and commissions. Fees can soon mount up so make sure you know what you are going to be charged for. Everyone in the financial world makes money out of their customers, that is how they survive. Your online broker is not a charitable trust. So don't believe the hype. They want your money. Of course, if they provide a better service than their competitors then they will get more clients and more money. But it is the money that is the motivating factor, not helping you have a nice day. So watch out for basic fees and additional fees.

What can you trade in? Most online brokers offer stocks, options, mutual funds and exchange-traded funds. Many brokers also offer a choice of international markets in addition to investment services or packages for education and retirement saving. As a beginner to online trading or investing you will probably just stick stocks and shares to start with.

The tools that online brokers offer can include analyst reports, investment calculators, cellphone alerts, charts, will help both beginners and experts make intelligent trading decisions. It goes without saying that the quality of this information is essential.

How easy is the broker's site to use? The site needs to be easy to use for everybody, including the totally computer illiterate.

Last but by no means least customer service. Whether you're a beginner to online stock trading or an old hand you are entitled to expect an online broker's site to be accurate and reliable. It's no use the site providing so-called 'realtime' quotes that are a minute old. Realtime must be realtime. It is also important that customer service be rapid and reliable, you don't want a broker that is just going to cover up mistakes and pretent they never happened. Unfortunately you won't know how good an online broker is until you use them, which is why it is very important to get as many recommendations from clients a possible. To do this I would suggest you check out the online financial forums and ask questions!

For more information on stock trading check out this book - Online Stock Trading for Beginners

By the way did I say that I do not recommend TD Waterhouse?