Trader Platforms: Which One Should You Choose?
The digital era has changed many things, including the way we invest. That's why more and more people are turning towards online stock brokers and trading platforms. These virtual investing tools provide users with access to financial markets from the comfort of their own homes. In other words, you can trade stocks and other assets from your computer or smartphone at your convenience instead of driving to a brick-and-mortar location, waiting in line, and so on. This article will explain everything you need to know about trading platforms. Specifically:
What is a trading platform?
A trading platform is a software that allows you to buy, sell, and hold stocks and other assets. Most stock brokers offer either their native trading platform or third-party trading platforms. If you choose to use your broker's trading platform, you'll be able to use the same login credentials for the platform and your brokerage account, making it easy to transfer money between the two. If you use a third-party trading platform, you'll have to transfer funds to the brokerage account associated with that platform before you can buy or sell shares. Trading platforms can vary in terms of features and design. It would help if you looked for features like real-time stock quotes, charting functionality, and customer support. Keep in mind that not all are created equal regarding trading platforms. While there are various factors to consider when choosing the best trading platform for you, there are a few general guidelines to keep in mind: - Trading platforms are designed to suit the needs and preferences of different investors. - While there is no single best platform for everyone, there are more suitable options than others. - The most suitable trading platform for you will depend on your needs and preferences, such as the type of stocks you trade, the amount you invest, and your confidence level.
How to choose the best trading platform for you?
When choosing a trading platform, there are several factors you should consider. Naturally, certain factors will be more important than others depending on your specific trading needs and preferences. Here are the most important factors to consider when choosing the best trading platform for you:
- Trading Costs: Trading costs refer to the fees charged by brokers for executing trades. When choosing a trading platform, compare the trading costs of different brokers. This will help you select the most suitable platform for your trading needs.
- Trading Tools and Automated Trading: Like trading costs, trading tools and automated tools are important when selecting a trading platform. Depending on the type of stocks you trade, you'll want a trading platform with the necessary trading tools and features. Trading tools can vary from one platform to another. Trading tools also differ in terms of functionality and design.
- Investment Amount: When selecting a trading platform, you should consider your investment amount. Specific trading platforms might be more suitable for you, depending on your investment amount.
- Customer Support: You should also consider customer support when selecting a trading platform. The trading platform you choose should have quality customer support that you can rely on in times of need.
List of the best trading platforms for 2019:
- eTrade: eTrade is one of the most popular online stock trading platforms. It is suitable not only for beginners but it is also best suited for advanced investors. With eTrade, you can trade stocks, options, and other investment vehicles from one account.
- TD Ameritrade is another highly popular online stock trading platform. It is suitable for all types of investors. TD Ameritrade offers access to over 100 commission-free ETFs and a wide range of investment tools and resources.
- Interactive Brokers: If you are a more advanced investor, you might consider Interactive Brokers. Interactive Brokers is suitable for high-volume traders and investors. It also comes with a wide range of trading tools and functionalities.
- Fidelity: Finally, Fidelity is another popular online stock trading platform. It is suitable for all types of investors. Fidelity is a broker that offers a wide range of investment products and services.
Virtual Trading Company (VTC)
A VTC is an electronic trading platform that provides a method for connecting people who want to buy and sell securities. VTCs provide a way for investors to buy and sell stocks electronically. The main advantage of VTCs is the low cost to operate. Due partly to low costs, VTCs can provide investors with lower prices when buying and selling stocks. VTCs also tend to be more nimble than traditional stock exchanges. Because they face fewer regulatory hurdles, VTCs can adjust their rules and protocols more quickly than exchanges. This means any change in VTC rules will go into effect more quickly than at an exchange.
Electronic Trade Execution Platform (eTEEP)
An eTEEP is a computer platform that matches buyers and sellers when trading securities. It is used to buy and sell stocks, futures, and options. An eTEEP is a computer system where orders are executed electronically. That is, when an order is placed, it is matched against another order automatically. There are no live traders involved in a traditional stock exchange. The main advantage of an eTEEP is a reduction in risk. An eTEEP is less prone to manipulation and fraud than an open exchange. It is also easier to close an eTEEP for maintenance, repair, or upgrade than an exchange.
Electronic Communication Network (ECN)
An ECN is a computer network that matches buyers and sellers when trading securities. The biggest difference between an ECN and an eTEEP is that an ECN brings buyers and sellers together. They then decide whether to complete the order. This means orders are not guaranteed to be executed. For example, the trade won't be completed if a seller's price is too high or a buyer's price is too low. However, there are a few advantages to using an ECN. One of the biggest advantages is that they provide more liquidity and lower execution times. This is because there are more buyers and sellers, and they are more willing to trade. Another advantage is that ECNs are more competitive than exchanges due to their lower costs.
Summary
Trading platforms can vary in terms of features and design. You should look for features like real-time stock quotes, charting functionality, and customer support. When choosing the best trading platform for you, you should consider trading costs, trading tools and automated trading, investment amount, and customer support. Certain factors will be more important than others depending on your specific trading needs and preferences.