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Best Online Trading Platform

Updated on July 7, 2014

The advent of the World Wide Web led the way to the creation of electronic trading platforms or the so-called online trading platforms. In the world of finance, it is defined as a computer system which is commonly used to execute orders for a variety of financial products over a network handled by a financial intermediary or an institution, like investment banks and stock exchanges. The financial products that are usually traded across the electronic platforms are commodities, stocks, derivatives, currencies and bonds. Since the internet can be accessed anywhere with a connection, people can perform electronic trading on any location, as compared to floor trading and telephone-based trading, which are traditional techniques in the finance industry.

When online trading happens, the platform streams a list of live market prices for the reference of users. The online trading platforms are also equipped with other trading tools, such as account management functions, news feeds and charting packages, which can be used to maximize the trading activity. Some of the platforms provide individuals the power to access several financial markets that are usually closed off from the general public. With the help of specific online trading platforms, such as Forex, you can gain access to financial markets that are traditionally handled by specialist trading firms. The best online trading platform can allow margin trading and contract for difference. Other online platforms trade strategies depending on high-frequency trading and even technical analysis.

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The General Standards of an Online Trading Platform

In the past, many people often confused the online trading platform with the online trading system. The online trading system is closely linked to the trading strategy or method, while the online trading platform is associated with the system which is utilized in placing orders in financial settings. There are basic standards that an online trading platform should have. Each trading platform needs to be licensed and evaluated by the U.S. NFA or the so-called National Futures Association. The U.S. NFA is considered as an independent organization and the watchdog of the futures industry and its commodities. It is self-regulatory, which means it exercises a form of regulation over a profession and industry. In the event of an absence or oversight of the government, these organizations can step up and fill the role. However, their authority does not necessarily mean that it is granted by the government of the United States.

The U.S. National Futures Association lists four standard requirements for online trading platforms to abide to. The first one is authentication. An online trading platform cannot operate without proper authentication procedures for its clients. Authentication processes should include passwords and authentication tokens like digital certificates or secureID cards. The second requirement is encryption. Online trading platforms should be safe from interception or hacks by establishing an encryption scheme that passes or exceeds industry standards. The next is the Transactions recording standard, which allows consistency in the classification, aggregation, recording and reporting of financial transactions. The NFA exercises their right to hold evaluations in order to guarantee that a certain online trading platform is up to the standards. Lastly, the pricing and slippage standard makes sure that the online platform has the best algorithmic trading standard to reduce slippage and increases in pricing.

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Have You Ever Traded Stocks?

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Best Online Trading Platform

With the aid of technology, many financial traders can take their pick from a wide variety of online trading platforms. Comparing online trading platforms can be easy among experienced professionals, but daunting for beginners. However, the choice is difficult because everyone will have their own personal; taste and preference. Trading is like coffee. Everyone likes to have their servings to a certain taste and liking. A trader will choose not to use a platform simply because the font of the menu is not right in his/her eyes. The competition is really that fierce! The difference is huge! Here are the best online trading platforms in 2014 to try.


Scottrade

Scottrade is probably famous for its impressive customer services, educational information and low-priced trades for as much as $7. Beginners will have no problem navigating the online trading platform since they can contact the staff support over the phone or by sending the email. There is no chat support, which is one of the downfalls of the site. The fees are downright reasonable; however, there might be some lack of investment options that might be present in other online trading platforms. Overall, Scottrade is worth the try because it features helpful trading tools with fair pricing.

Things to consider before trading.

  • Stock trading is essentially gambling, you never truly know if you will make money.
  • Do your research before you buy.
  • Never buy purely based on a person say-so, even if he is a "guru"
  • Never invest in a stock you do not understand.
  • Only invest what you can afford to lose.

OptionsXpress

OptionsXpress is a popular trading platform which has gained the respect of big names such as Forbes, Barron’s, Smart Money and Kiplinger’s. The platform is well-equipped with trade tools that can help traders implement their investment strategies. The fee schedule is easy to understand for beginners and professionals alike. Furthermore, the traders can enjoy the affordability of OptionsXpress, with no minimum account balance and low fees. However, the only glitch is the lack of access to international trading.


Fidelity

Fidelity has a physical office apart from its online website, which gives people the guarantee that the company is a good name to trust. Their personal service is great, which can be helpful if you are still learning the ropes of the trade. The online trading platform offers a flat rate of $7.95, a great commission structure and impressive trading features. Fidelity requires a minimum account balance ($2,500) which people think is too much.

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Trade King

The online trading platform is a strong contender in the financial industry because of their lack of trade minimums and accounts. Their services, tools and prices are great for professionals and beginners, making them one of the best online trading platforms. There is also training education with a wide collection of free tools for stock monitoring and screening. Here is a little video for your viewing pleasure about Trade King. Gives you a feel for what you have in stall.


E*Trade

For professional traders who make more than 150 trade transactions every quarter, the E*Trade may be the best online trading platform for you. The platform was one of the firsts to offer online trading, and one of those improved the financial trade industry into what it is today. Traders and investors will appreciate the basic investment tools, educational resources and fair tiered pricing schedule which go well for people who trade often. The downsides are a $40 maintenance fee and live chat unavailability.

In The End...

It is best to study everything that is associated with these platforms, such as financial advisory services, user interface and the fee structure. There is no such thing as the best online trading platform for everyone because every trader and investor has their own likes and dislikes. In the end, the financial trader should prioritize their preferences and choose the best online trading platform that they are comfortable with.

Have you ever had any success with stock trading? If so do share your experiences below along with tips for any newbie traders out there by leaving a comment below.

Knowledge is power and power is being able to give away knowledge at will.

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