Choosing an online trading broker
When trying to choose an online trading broker that suits your needs, there are many factors to consider. In this short review, we will look at why we chose to base the course on the brokers we mentioned, and what you should usually keep in mind when choosing a broker.
We start by looking at the most important factors to consider when choosing a broker
Important factors to consider when choosing an online broker
- Available securities: Which securities can be traded with the online broker? Do they include the ones you want to trade? Is it easy to short stocks? Do they have a long list of stocks that can be shorted?
- Brokerage commissions and other fees: What are the costs of buying and selling in the markets where you wish to trade? How much does the broker charge in commissions? Are there other fees?
- Payment methods: Transactions to and from your trading account (deposits and withdrawals) should always happen smoothly, securely, and free of charge.
- Insurance: Is your capital insured by SPIC (USA) or other local authorities? Is the broker “reputable”? Are the assets held in “street name“?
- The user interface and design: Can you access your account and trade from a computer, tablet, and mobile phone? Is the interface user-friendly? How is the design; is it presented in a way you like?
- Available tools: Are there tools and information you need for your trading?
- Automated trading: Is it easy to make a bridge between your software and the broker? Do they have API solutions that let you trade automatically?
What do we think about Tradestation and Amibroker?
The trading strategies we have chosen to include in the various price packages are based on the US stock market indices, and there are a lot of exchange-traded products and contracts to choose from. Many of them have high liquidity, which makes things much easier for us day traders — we rarely encounter high slippage that, in many other markets, can eat up a significant portion of the profits.
Although the benefits of choosing the US stock market indices are great, it can be difficult to access Non-US brokers that offer access to these markets in a cost-effective way and with a sufficiently high volume.
In some cases, the fees can be a bit high, but as these vary somewhat, depending on the time of day, you can still get reasonable fees. In the lessons on the strategies, we discussed this in detail!
As for TradeStation, we chose it because the broker offers competitive prices on the contracts we intend to trade in this course while, at the same time, providing what we believe is the best trading platform in the market. However, the entry barrier can be high for some, it’s an American broker, which requires more paperwork to open an account. This is also the reason why we have chosen to include IG — a much more convenient solution for most people.
It is important to remember, however, that you may still choose to trade the strategies with other brokers and platforms that you have access to or prefer. The rules will be clear in the lessons that describe the trading strategies.
As for Amibroker, the platform is fantastic for backtesting but is a bit more cumbersome for live trading. Amibroker is 100% customizable, but this also means more coding and programming. Thus, for beginners with no practice whatsoever in coding, Amibroker might be more difficult to grasp than Tradestation. We use both platforms and both have their plus and minuses. We use Interactive Brokers for our trading via Amibroker.
We have written about both in an article.