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  • Best Online Brokerages

    When it comes to online brokers we usually steer our users towards two main brokers. You always want to deal with reputable and well-established brokers. After all, online brokerages are basically banks. You wouldn't put your money in a shoddy bank so don't put your trading/investing funds with a shotty broker.

    TD Ameritrade - Arguably the best online brokerage available, TD Ameritrade is an award-winning broker platform that currently offers $0.00 commissions, excellent customer service, and state of the art trading platforms like Think Or Swim.
    • $0.00 commissions for stock, ETF, and options trades with no data fees or transaction minimums.

    Zacks Trade - Zacks Trade is a global, low-cost, online broker dedicated to traders and investors all over the world. Stock trades are just $0.01 per share with a $3 minimum (additional fees may apply) and options commissions of $0.75 per contract ($3 for the first contract).
    • $1 Stock, Options, and ETF trades for your first year

    Ally Invest/MB Trading - MB Trading is the KING of online brokerages for real traders and investors. They are now owned by Ally Invest who has been a powerhouse in its own right for years.
    • $4.95 Stock and ETF trades
    • $0.65 per options contract
    • Live trading quotes and mobile app

    Choosing the Best Online Brokerage Firm: What’s Right for You?

    When you're looking to find a high-quality online brokerage for stock trading, it's important to do your research. You'll want the brokerage to adhere to regulations and be something that works for your needs. Below is some advice on finding the best online brokerages for beginners.

    Why It’s Important to Choose the Right Brokerage Firm

    When choosing an online stockbroker, there is a wide range of factors to take into consideration. After all, this is the company that will be managing your money. Arguably, the company will be partially in control of one of the most important aspects of your life. For that reason, doing extensive research on companies and stockbrokers before doing business with them is not only suggested, it’s necessary.

    Besides choosing a highly regarded firm, you also have to consider details like fees, trading platform features, and security. These are all things that will both, directly and indirectly, affect you and your money. The brokerage service you use needs to align with your investing goals, educational needs, and learning style. For new investors, having the best online brokerage firm for your needs and desires can be the difference between a successful new stream of income and failure or a deficit. Having a company or person that you trust in charge of your finances takes some of the stress out of the investment process.

    The “What Could Go Wrongs”

    If we discuss everything that needs to go right in a relationship between investor and broker, we should also discuss the common things that can go wrong. One mistake that can be made is for the investor or broker to select asset classes, strategies, managers, and funds based on current strong performance. This can lead to bad investment decisions. A stock item that is currently doing well could be nearing the end of its run for that period and could be about to tank.

    Another mistake that can be made during the investing process is ignoring risk aversion. It is important for the broker to be well aware of his investor’s risk tolerance or capacity to take on risk. Investors who cannot handle the ups and downs associated with the stock market would be better off investing in blue-chip stocks within established companies. Startup company shares introduce much more volatile growth.

    Another common mistake to be aware of is averaging up or down. This is common with blue-chip stocks because it works well when there is a long investment horizon. However, for a trader who is trading volatile and riskier securities, it could be the beginning of demise. It is imperative that your broker does not keep adding to a losing position. If the additions continue without the fate of the stock changing direction (which, at that point, is unlikely), your broker could eventually be forced to cut the entire stock when the magnitude of loss becomes inevitable.

    Having a brokerage firm that is well versed in these types of mishaps and is skilled in avoiding them is key to a successful financial relationship.

    Qualities to Seek Out in an Online Brokerage Service

    Some of these qualities will be obvious, such as whether or not this brokerage platform allows you to trade the securities that you desire. Others will not be as obvious to the untrained eye, such as how to get in touch with the right people to satisfy your financial needs.

    Before diving into the vast sea of online brokerage firms, it's important to know what you are looking for. Knowing your needs is the first step in the process of finding the best brokerage service for you. While some seasoned investors will know how to look for specifics such as advanced charting capabilities, conditional order options, and things of the like, newer investors are not expected to know things like this. However, knowing the basics will cause the process to go smoother for both the investor and the broker.

    The brokerage firm you choose should be a member of the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA), covered by the Federal Deposit Insurance Corporation (FDIC). The company should also provide insurance to protect their investors in case the company fails. The company should also have in place some sort of guarantee of protection against fraud.

    Check what current customers are saying about the firm by looking up reviews. The firm's website should offer two-factor authentication, and the firm’s technology should be up to date for the best account security possible. There should be a disclaimer saying that they do not sell customer information to third parties. Finally, the firm should offer options for different investment accounts.

    While there is an endless list of qualities that make an online brokerage firm a good or bad option, the aforementioned qualities are some of the most important. Companies that care about their customers will always be sure that they have all the necessary licensing, insurance, technology, and ability to provide the best possible customer service.

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  • #2
    I personally use ALLY as my main broker. Interactive brokers is a close second in my book.


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