Trading effectively requires time, experience, skill, and access to the right tools. You can have the best trading strategy ever created but still fail if you are not equipped to execute it. Your trading platform is one of your most potent trading tools because it enables you to open and close orders, compare prices, and decide which contracts or securities you will trade.
But how do you find the best trading platform for your style?
This article will discuss what makes a great trading platform, how you can identify critical functionalities, and ultimately the best way to choose a brokerage based on your experiences and preferences.
This extensive list covers all brokers available.
Set Trading Goals
The first step in finding a trading platform is to articulate your trading goals. Since trading is entirely dependent on the trader’s ability and market understanding, you should match your current goals to a platform instead of the other way around.
Compiling your trading goals can be as simple as deciding if you want to implement buy-and-hold strategies, intraday trading, cryptocurrencies, or a combination of all of them. Once you have your trading goals set, you can start researching trading platforms that align with your desired outcome.
Identify Must-Have Features
Once you nail down your goals, it is time to start listing features that will help you implement your strategy and achieve your goals. Since different brokerages offer unique capabilities, making a checklist beforehand will help you find options that fit your needs.
Orders
Order capabilities are essential for a robust trading platform. The most common orders are buying and selling. Traders can either buy to open a position, such as going long stock shares, or they can buy to close an open short position whether with stocks or options. Most exchanges offer to sell functionality as well, which includes selling to open a short position, such as a call option, or selling to close an open position such as a heavily appreciated stock.
Although these are the most common orders, many brokerages also offer limit, stop, and stop-loss orders, which can differentiate a trade’s success or failure. If day trading and customizable order flow are essential to your strategy, ensure the brokerage you are researching offers them before committing.
Available Securities
Imagine an options trader who opened a brokerage account deposits trading funds and then finds out the brokerage does not allow options trading. That would be highly frustrating, but it is a common issue since so many brokerages are on the market. If you want to trade different securities, you should narrow and filter your search based on the securities the platforms support.
Read The Fine Print
Once you narrow your search down to a few top contenders, it’s time to dig deep. Customer reviews and industry research can go a long way in helping you find the best trading platforms for your investment style. Positive reviews indicate a vetted and reputable brokerage, while sparse and negative reviews can be a clear sign to steer clear.
You should work with a trading platform that fits you, and putting the time in to research your options will make an immense difference.
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