The good thing about discount brokerage firms is that their “thrifty” price cuts on commissions make them much more viable for the average everyday citizen interested in trading than traditional brokers.
Today, most traders look for discount brokers who have very low fees so that they can have more control over their trades without having to pay a traditional broker to sell and buy on their behalf.
The only potential downside to online discount brokerage platforms is that they aren’t always created with beginners in mind. If you are entirely new to trading, look for an app or service that includes an extensive library of learning materials, resources, and tools. Robo-advisors can be helpful as well, so consider this kind of service.
The discount brokerage firms with the lowest fees aren’t necessarily the best, as they might not offer much about overall value.
In addition to low commissions and little to no fees, also look for these features:
- Secure/private transactions and account information with the best cyber security technology
- Educational knowledge databases
- Reliable customer service and tech support
- A range of investment types to help you build your portfolio
- UI design for all types of traders, regardless of experience level
Discount Brokerage Firms That Match Your Needs
Your own needs are the most important factors to consider when searching for the right trading app or service. Suppose you do have a bit of experience. In that case, you might want to prioritize a higher level of educational materials and opinion-based content created by analysts and professional investors. Truly experienced traders might find discount brokerage firms that have advanced charting capabilities, the ability to quickly buy or sell all of the stocks you are interested in, as well as other asset classes.
Your trading style is an essential factor in choosing the right discount broker. Some brokers offer a more hands-on approach to users who hope to become full-time investors eventually. In contrast, others are designed to allow for long-term, solid investments to hold on to, with little to no daily interaction.
Once you have an idea of what you want, it’s time to start narrowing down your options. Pick a few online firms and do a bit of research. Are any of the firms you are interested in accused of fraud? Is there any controversy involved? Of course, a few negative reviews here and there are normal. Suppose there are several claims of fraud across the internet or controversies/scandals mentioned in news reports. In that case, that might be a firm you’ll want to avoid.
Suppose you are a reasonably knowledgeable investor with some experience or an advanced investor interested in day trading. In that case, Zacks Trade might be right for you. It gets high ratings in lists of discount brokerage firms and awards from big-name sites like NerdWallet, Benzinga, Brokerage-Review, and Consumers Advocate.