With so much volatility in the stock market recently, choosing which firm you use to invest is a more important decision than ever, due to the major differences in trade execution, quality of support, services offered, and costs associated with trading and maintaining the account. It’s very important to analyze your personal needs and compare them to the options available before making your choice.
Trade execution is especially important if you are a frequent trader or scalper that looks to move in and out of positions rapidly, because any delays in transmitting your order to the exchange could cause you to miss out on your expected price, but should be a consideration of any investor. Many retail brokerages do not focus on this aspect of trading because most of their customers do not place trades often or rely on small price changes to make a profit on a trade, but there are brokerages known for their execution speed, and it is important to understand how your trades are routed between exchanges, dark pools, and other markets to make sure you are getting the best price possible.
Customer support is an aspect of investing that is often overlooked, but can save you large sums of money if you need them. Whether there was a problem with transferring money in or out of your brokerage account, the execution of a trade, or access to your account, prompt, helpful customer support can be the difference between profit and loss in certain situations.
Another factor when choosing an online broker is the number of services offered. It can be very convenient to find a broker that offers the ability to trade multiple financial instruments from a single account, rather than having to manage separate accounts for equities, options, bonds, ETFs, and currencies. Also, many brokerages are offering banking services, which can make managing your money even easier. The final service to consider is the options available for accessing your account. A mobile application or mobile-friendly website can allow you to easily trade from anywhere, and could be a big benefit in certain situations.
Last but not least, the cost of the account must be considered. Most people focus on the cost of trades when choosing an account, but it is important to determine the total cost of the account for you. Infrequent traders might be better off paying a higher fee per trade in exchange for lower account fees, frequent traders might focus only on their cost per trade, and traders with large sums of money might be most concerned with finding the best interest rate available.
In summary, you are the only person who can decide which brokerage is the best for your financial future. Be sure to do some research, discuss the options with other investors, and then choose wisely, since you are using them as an aid toward improving your financial future.
Read original blog post