If you’re looking for a way to build more wealth in 2018,
getting
started with one of the best online brokerage accounts is a solid first
step. Doing so will allow you to invest outside your traditional
retirement accounts and on your own terms. The best part is, the best
online brokerage firms charge little or no fees and offer excellent
resources that can help you learn more about investing along the way.
Of course, not all brokerage firms are created equal, and that’s why we took the time to break down each of their details and rank the top options on an array of factors.
If you’re looking for a new way to invest this year and are ready to strike out on your own, the following online brokerage accounts should be at the top of your list.
The Simple Dollar’s Top Picks Best Online Brokerage Accounts in 2018
Of course, not all brokerage firms are created equal, and that’s why we took the time to break down each of their details and rank the top options on an array of factors.
If you’re looking for a new way to invest this year and are ready to strike out on your own, the following online brokerage accounts should be at the top of your list.
The Simple Dollar’s Top Picks Best Online Brokerage Accounts in 2018
- Optionshouse – Best Discount Broker (also Best Options Broker)
- Scottrade – Best Support and Service
- E*TRADE – Best Trader Resources
- TD Ameritrade – Best For Developing Traders
What Matters When You Trade Stocks on Your Own?
Managing your own money
can be a stressful endeavor. To minimize this,
and to minimize information overload that tends to come from watching
the markets 24/7, there are a few must-haves to look for in an online
broker.
- Clean interface. When I trade, I want to be able to easily find my order entry ticket. I don’t want it buried under a number of drop downs. This interface should have intuitive access to see your balance, available cash, positions with real time P/L and all be easily navigated.
- Quick access to basic charting. A chart tells me where the stock has been recently. I don’t trade minute to minute anymore, so I don’t need complex tools like stochastics or retracement lines. All that’s important is that I have a basic chart on a yearly, monthly, weekly, daily and intra day time period. I use a chart to see current price relative to those time periods, mainly to avoid purchasing at a bad price.
- Low fees. One of the biggest roadblocks to building wealth is fees incurred to invest your hard-earned dollars. Because the fees charged by different brokerage firms vary so dramatically, it’s crucial to seek out options that charge low fees (or no fees) for account management and trades.
This industry is more complex than the average person thinks. You shouldn’t just pick any online broker and sign up for an account. The best online broker for one person is often completely different for the next person. Use this resource as a guide to your decision process. Figure out what features are best for you, and make your selection.
What Makes a Great Online Broker?
I analyzed a number of
elements to come to my decision on which brokers
are the best. Later in this post, I provide full details on how I
selected the best online brokerages.
When you take all the features, resources, trading platforms, and technology into account (while also considering every type of trader), the full-service brokers, like E*TRADE and TD Ameritrade are the best for the largest number of people.
For those simply looking to make cheap trades, I would recommend going with Optionshouse.
If you’re a very advanced trader, high-volume trader, or a professional who manages money, I recommend going with Interactive Brokers. However, I didn’t include Interactive Brokers on my list because they’re best for a very small group of traders and the platform is very complex.
When you take all the features, resources, trading platforms, and technology into account (while also considering every type of trader), the full-service brokers, like E*TRADE and TD Ameritrade are the best for the largest number of people.
For those simply looking to make cheap trades, I would recommend going with Optionshouse.
If you’re a very advanced trader, high-volume trader, or a professional who manages money, I recommend going with Interactive Brokers. However, I didn’t include Interactive Brokers on my list because they’re best for a very small group of traders and the platform is very complex.
Top Qualities of Standout Online Trading Platforms
- Quality trading tools and technology
- Multiple trading platforms for all levels of traders
- Excellent mobile trading features
- Solid navigation that displays the relevant information where you want it
- Quality educational resources and research for trader development
"There’s more to
selecting an online broker than price. You have to consider the
resources you’re getting for the cost you pay per trade."
For example, my colleague, who is also an ex-trader, likes to use a combination of stock and options trade in his longer-term trading. He recently switched over to Fidelity because he really liked the cash management features, but was very disappointed by complex order entry, sub-par options execution and frustrating navigation. He’s currently making the switch to one of the brokers I profile here.
For example, my colleague, who is also an ex-trader, likes to use a combination of stock and options trade in his longer-term trading. He recently switched over to Fidelity because he really liked the cash management features, but was very disappointed by complex order entry, sub-par options execution and frustrating navigation. He’s currently making the switch to one of the brokers I profile here.
Analysis of the Best Online Brokers
Best
For:
- Options Traders
- High-Frequency Traders
- Deal Seekers
Optionshouse
Best
Discount Broker
When
it comes to getting a deal on a stock or options trade, it’s tough to
beat OptionsHouse. Along with the low costs and fees, you’ll also have
access to proprietary tools and technology. OptionsHouse isn’t a
“full-service” broker like TD Ameritrade, which means you won’t find
the same comprehensive financial resources and access to every
investment product. OptionsHouse is good at what they do — providing
very affordable trading prices, low margin rates, and unique tools for
stock and options traders.
NOTE:
OptionsHouse was acquired by E*Trade at the end of 2016, but no changes
are expected to OptionsHouse pricing or trading platforms.
Best
For:
- Beginners
- Long-Term Investors
- Research-Based Traders
Scottrade
Best
Support and Service
For
years, Scottrade has been known as the best online brokerage for
customer service. Scottrade doesn’t just let you open an account and
ignore you. They thrive on building relationships with their clients,
which is pretty rare these days. Scottrade is behind the times with
some of their features, but they also don’t charge as much money per
trade as the other full-service brokerages. If you’re a new trader or
you just like being taken care of regardless of how much money is in
your account, I don’t think you can do better than Scottrade.
Another
reason to consider Scottrade: They were recently acquired by TD
Ameritrade. The deal closed around the fall
of 2017 and a full
conversion to TD Amertrade’s systems is expected to be in place this
year. You’ll be well-served with Scottrade’s amazing service for
beginning traders and TD Ameritrade’s breadth of offerings for traders
of all levels.
Best
For:
- Low-Frequency Traders
- Long-Term Investors
- Research-Based Traders
- Multiple Market Traders
E*TRADE
Best
Trader Resources
E*TRADE
is right there with TD Ameritrade and Scottrade if you’re looking for
the all-around best online brokerage. What’s interesting about this
comparison is that E*TRADE excels in several different areas compared
to TD Ameritrade and Scottrade, but also has many similar offerings.
E*TRADE’s web-based platform is incredibly advanced and a breeze to
use, as is their mobile app. However, you have to pay for these
features because E*TRADE is just as pricey as TD Ameritrade and
requires a $500 deposit to open an account (TD Ameritrade is free).
Best
For:
- Traders of all levels
- Long-term investors
- Low-frequency traders
- Beginning traders who want to advance
TD Ameritrade
Best
For Developing Traders
I’ve
actually had a TD Ameritrade account for over 15 years now. Back in the
day, it was TD Waterhouse and then it merged with Ameritrade to form
one company. TD Ameritrade is one of the all-around best online brokers
because any level of trader can be satisfied here. While the costs and
fees are on the high end of the industry, you get access to
comprehensive research materials (both third-party and in-house) as
well as education resources that can help you advance as a trader.
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