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Friday, December 13th
TradeStation is known for its robust tools and platforms, with so many features that even seasoned day traders are impressed. It has won multiple awards and has a wide variety of futures products for the active trader. TradeStation has recently updated their website in an attempt to attract less experienced investors. They have also improved their customer service and pricing structure. However, their fees are still higher than competitors, they employ outdated fee-charging practices, and they offer little by way of educational resources for such a high-level platform. The positives and negatives of this company end up being about even, so we feel comfortable giving TradeStation an average rating.
Robinhood is controversial by design. Their sole focus is to shake up the industry by allowing anyone - not just the wealthy - to invest in the stock market affordably. They are the originators of the no commission, no minimum stock trading model, and they indeed turned the industry on its head. Since then, they have continued in their irreverent and boisterous way to shake up the market. Unfortunately, we have found that they are more "outlaw” than is acceptable. Recently, they had to pay a $7.5 million fine for the "gamifying” of their mobile app platform, and before that, they were slapped with the largest fine in FINRA history for questionable practices that have led to people's financial distress and, in one case, resulted in a suicide. We cannot recommend them as a stock trading platform, but we do appreciate their innovative ideas. We just wish that Robinhood could carry them out with a bit more integrity.
This can be an overwhelming question for beginning investors - but that's a great place to start. First, ask yourself what level of skills or knowledge you have in investing and what your purposes for investing are. Are you brand new to the financial world of stocks, ETFs, fractional shares, and options? Are you trying to manage a large amount of wealth? Are you looking for a safe place to grow your savings over the next few decades?
Or, are you someone who has had a lot of experience in investing and wants to get back into the game or take your game to the next level? Are you wanting to take high risks, or are you more conservative in your approach? There are plenty of options out there and there are some who focus on everything and some who specialize in one or two niche markets.
For beginning traders, there are platforms that have devoted a big part of their online presence into education. Some have partnered with banks so you can do all of your investing along with your banking.
For active traders, the best platforms will have advanced charting capabilities, responsive customer service, robust toolkits, and they will also offer high-quality research resources. We highly recommend those platforms that allow for backtesting - a way to put in a particular strategy simulation and see how it might play out before committing to the trade in real life. Be sure to ask questions and double-check that whatever stock trading platform you use, they will have the tools that fit your particular needs.
For example, if you are going to be trading mostly on your mobile phone, you will want to make sure the stock trading company you choose has a strong mobile platform. Some companies do a bare-bones mobile app, and that would not be a suitable fit. Be sure to check if software platforms have a history of outages or glitches, too.
Are you the kind of investor who doesn't want to actually pull the trigger on choosing which stocks to buy on your own? You might want to look into robo-advisors or a dedicated financial advisor or team of advisors. These accounts usually come with fees as a percentage of the total amount invested, but it can be well worth the cost if you don't want to be involved in the day-to-day management and strategy on your account.
Most advisor accounts (robo or personal) involve you completing a questionnaire and/or a phone call that considers your time frame, financial goals, and risk tolerance. From there, the company will create a portfolio matching the information you gave. This portfolio will be rebalanced automatically, and you don't have to do a thing. On those types of accounts, you can find options with no fees, and the ones that do charge fees are usually much less expensive than working with a human advisor one-on-one.
Keep in mind that most of today's online stock trading platforms very proudly advertise that they charge "$0 fees." That usually just refers to a $0 commission fee. There will definitely be at least one or two fees for most accounts. Whether it's for withdrawal or broker-assisted transactions, there are going to be some extra costs associated with your account.
So, which online stock trading platform is best for you? Here are some of the criteria to keep in mind:
To help you make the most of your investments, Top Consumer Reviews has evaluated and ranked today's most popular online stock trading platforms. We hope this information helps you reach your financial goals!
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