How did Trading Brokers choose our best stock trading platforms?
Following on from our best stock trading platforms, we will now look at what stock trading platforms are used for and some of the most important factors to consider when looking for a reliable stock trading platform.
What is an online stock trading platform?
An online stock trading platform allows traders to access different global markets for speculating on the price movements of various trading instruments. This can include Forex, Commodities, Cryptocurrency, Stocks, Shares, Indices, Metals, Energies, Options, Bonds, ETFs and CFDs.
Best Stock Trading Platforms: Desktop, Web & Mobile Platforms
In the past, investors and traders would have had to go through an offline stock broker which meant that the markets were less accessible than they are today. As technology has improved over the years, there are now many stock brokerages to choose from. Anyone aspiring to be a successful trader can open a stock trading account with an online broker and gain access to the brokers stock trading platforms for online stock trading from anywhere in the world with an internet connection. Most brokers provide these stock platforms free of charge and for use on desktop and mobile devices.
Best Stock Trading Platforms: MetaTrader
Through a stock trading platform you can view real time bid/ask prices of various assets and load charts that show the historical and current prices of chosen assets over multiple timeframes ranging from tick to yearly charts. You can add technical indicators to these charts to help identify potential trending and ranging market conditions. These indicators can provide stock trading signals and are often used as part of an overall stock trading strategy that involves technical, fundamental, sentiment and price action analysis. When you find a suitable trading opportunity, you can execute, manage and close your buy or sell position directly through the stock platform.
What makes a good online stock trading platform?
Stock trading platform regulation
When you choose an online stock trading platform it is very important to ensure that the stock brokerage providing the platform is regulated by a respected government authority. The most respected regulatory authorities to look for include the Australian Securities and Investment Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) and the Financial Conduct Authority (FCA) in the United Kingdom.
Investors have more protection when using a regulated broker as they have to conduct business according to strict rules and regulations put in place to protect investors. If a broker claims to be regulated, you can verify this by checking the broker’s license number with the relevant authorities to ensure the regulation is legitimate and up to date.
Stock trading platform instruments
Each stock broker will offer a range of different markets and trading instruments to trade via their online stock trading platforms. If you wish to trade a particular asset class such as forex, stocks, cryptos, etc, you should check whether the broker offers that market through its platforms. It may also be wise to consider if you plan to diversify your investment portfolio in the future. If so, the more trading products and markets offered by the broker, the easier it could be to expand your portfolio when the time is right.
If you would like to trade particular stocks then you should check that the broker has these amongst its selection of stock trading instruments. Some brokers will only offer US stocks or UK stocks. Other brokers will offer a choice of global stocks.
Stock trading platform tools
All stock platforms come with a range of free built in trading tools to assist with your online trading, helping to improve overall efficiency and performance. These can include technical indicators for analysing charts such as a moving average, MACD, Bollinger Bands, RSI, CCI and many more. Some platforms offer fundamental analysis tools such as built in economic calendars to efficiently keep track of the latest market news releases. They may also have trading calculators to help with planning your trades. The more advanced stock platforms will have depth of market (DOM) with level 2 pricing and sentiment tools that show how many traders are buying/selling a particular instrument.
If you require a specific set of trading tools or would like access to as many as possible, you should check what trading platforms the broker offers along with the trading tools included. Some trading tools are stand alone and thus will not be incorporated into the platforms but can still be very useful.
Stock trading platform fees
Most stock brokers will provide traders with free online stock platforms although there are some who charge monthly and volume-based fees, usually for specialised trading platforms that have specific features a professional investor may need. That being said, the free stock trading platforms will most likely be sufficient enough for the average retail trader.
Stock trading platform commissions
In addition to potential fees for gaining access to the brokers stock trading platforms, you should consider other online trading costs. Most online brokerages will charge a commission for placing trades in addition to the spread and overnight swap fee. These costs can vary significantly from broker to broker so it is important to consider the overall costs you will incur and the affect that will have on your money management.
Stock trading platform spreads
The spread is the difference between the buy and sell (bid/ask) price which can vary depending on the volume of liquidity and quality of liquidity providers that an online broker has. Some brokers offer fixed and variable spread accounts, some will offer commission free accounts but instead mark up the spread to make up for this. In general, the more liquidity that the broker has, the tighter the spreads can be. It is important to account for the spread when planning your stock trading strategy, especially if you are planning on using scalping strategy.
Stock trading platform swaps
If you hold a position with your online broker overnight then you will probably need to pay a swap fee. This is an interest fee for the procedure of moving open positions from one day to another, also known as the rollover. This is another cost to factor in to your money management planning. Some brokers offer swap free Islamic trading accounts that conform with Sharia law which allows Muslims to engage in online trading through their platforms.
Other stock trading platform fees
Along with trading platform, spread, commission and swap fees, most stock brokers will charge additional fees that should be checked and clearly understood. Other fees that are worth considering include withdrawal and inactivity fees.
Stock trading platform usability
If you are already familiar with a specific stock trading platform then it could be a good idea to choose an online broker that offers that platform. However, if you have yet to use a trading platform then it may be a good idea to start with a broker that offers a user-friendly stock platform which has plenty of tutorials available to help you learn how to trade stocks online. The MetaTrader 4 (MT4) platform is often considered as one of the most intuitive and easy to use trading platforms which makes it a popular choice amongst new traders.
Stock trading platform leverage
Nearly all online brokers offer leveraged stock trading via their platforms. Leverage basically means that you can open a position larger than you could without it. If for example you had leverage of 1:50 and a trading account balance of $1,000, you could effectively open a position size of $50,000 (1,000 x 50 = 50,000). Although leverage can increase profit potential, it also increases trading risk and thus, can lead to large losses. It is imperative that you have a thorough understanding of leverage and the significant risks involved before you start trading online. Check the broker offers a leverage that you require via your preferred trading platform.
Stock trading platform education
Some stock brokers also provide traders with educational resources such as videos and trading guides to help them improve their trading knowledge and skills. They may include detailed tutorials on how to use trading platforms which could be helpful for those who are new to online stock trading and need help to familiarise themselves with the different stock platforms available to them.
Stock trading platform minimum requirements
You will need to make sure that the stock trading platform will run on your computer, VPS or mobile device by checking the specification requirements. Each online brokers stock trading platform will have a minimum deposit requirement which is worth considering.
Stock trading platform funding
Each stock broker will offer different options for making deposits and withdrawals to and from the trading platform. Most brokers accept bank wire transfers and credit/debit cards but some traders prefer online payment processors such as Skrill, PayPal, Neteller, etc. Ensure that the trading platform supports your preferred method of funding your stock trading account.
Stock trading platform customer service
If you have an issue with your stock trading platform that you need help with, it is important that the broker has a prompt and efficient customer service team. Online chat is often the quickest way to speak with someone whilst other options include telephone and email. The more hours the brokerage support team is available, the better. Some run 24/5 whilst others are available 24/7. You should also consider the brokers office locations as they may be in a different time zone to you which could affect the response time. Check that the broker has a method of contacting support that is most convenient for you and available in your language.
How to start trading stocks online?
Now that you have had a brief overview of what stock trading platforms are and what to look for, you may be considering opening a trading account with an online broker to gain access to their stock platforms. This can be a quick and easy process that requires completing an online registration form. Simply choose an stock broker, follow the account opening process and you will be able to start trading stocks online through one of their stock trading platforms. You may refer to our guides on how to choose a stock broker and how to open a stock trading account if you would like to learn more.