If you are looking to begin trading online and you are searching for the best stock broker for beginners, this guide will hopefully steer you in the right direction. When you are just starting out the best stock broker for beginners can be a lot more than just a trading platform for placing trades. The online stock broker platform can help you build a solid investment foundation. When deciding on an online stock broker, you need to consider what you are looking for and what works best for you.

What is a stockbroker?

Stockbrokers are either a person or an institution that is licensed to buy and sell stocks and other securities through the market exchanges. Online stock brokers offer a wide range of investment options, as well as a trading platform for executing trades. With an online stock broker, you still use actual money, but you decide with stocks to buy and sell, and you decide your trades for yourself. Some online stock brokers for beginners who offer advice from live brokers and broker-assisted trades as a part of their packages.

What can a stock broker for beginners offer?

There are three essential assets that a stock broker for beginners can offer. An easy-to-use platform and website is the first and most vital asset to look for. This is since you need to have a platform that is straightforward to use for trading online. You want it to be easy to perform research and place trades. The second important asset is an excellent collection of educational content. The last thing that you want to look out for is that the stockbroker offers access to virtual trading for practice. As a beginner, you may want to practice by using a demo account before having to deposit actual money.

Basics of online trading

When you trade stocks online, essentially, you are buying shares of a company that’s publicly listed on a stock exchange. Trading stocks are not the same as ETFs (exchange-traded funds), CFDs (contracts for difference), and options (derivatives contracts). When you buy shares of stock, it means that you are taking actual ownership in that company. If you want to place a stock trade, you can fill out a form with your online stock broker. When it comes to online trading, you will want to know what you are looking to trade, how much you are willing to risk, what your goals are, and how much time you have to devote to online trading.

There are different kinds of trading, which include:

• Forex trading: Forex trading is the buying and selling of currencies, with the hope of making a profit on the difference in the value of the currencies in the global economy.
• Stock trading: With stock trading, one buys, holds, and sells stocks (also referred to as shares) of securities that are listed on public stock exchanges, like NYSE, NASDAQ, and AMEX.
• Options trading: Options trading is a form of derivative trading where people trade contracts that give them the rights, but not the obligation, to buy or sell an underlying asset at a predetermined price.

How to Find the Best Online Stock Broker for Beginners

Because there’s so much competition in the market as well as having many brokers and exchanges to choose from when it comes to online stock trading for beginners, it can be difficult for them to know which option will work best. Here are a few things we suggest keeping in mind before you decide on the right online broker for your stock trading:

Regulation

Use a regulated online Broker or Exchange. The regulatory body develops rules and services protect the integrity of the market, as well as traders, and investors, such as the Financial Conduct Authority (FCA) in the UK. Due to possible safety concerns, open your trading account with a regulated broker.

Customer Service

Cryptocurrency trading happens 24 hrs a day online, so customer support should be available at all times. You’ll want to be able to speak with a live support person. Many brokerages have a local UK office for ease of use. The representative’s ability to answer your questions regarding spreads and leverage, as well as company details is very telling.

The details of a good broker should be out in the open for everyone to see, either online or otherwise.

Account Types

Your ideal online stock broker for beginners should be able to offer either multiple account options or provide you with an element of customizability. Perhaps the broker even has a separate account for beginners. Look for a broker that offers competitive spreads and easy deposits/withdrawals.

Tradeable Assets

When selecting an online broker, many just focus on one asset class. Nonetheless, you should keep in mind there are many other types of investment alternatives offered. Including Forex, Cryptocurrencies, Stocks or shares, ETFs, CFDs, futures or options.

Fees

Buying and selling stocks costs money. However, unlike buying stocks or bonds, stockbrokers usually charge a percentage. You may consider looking for an online broker that charges a flat rate fee instead of the percentage model.

Liquidity

Because stocks are traded in a market where people are both looking to buy or sell the currency, it’s crucial to consider the amount of liquidity that an exchange can have. Liquidity is the ability to sell without the price being significantly affected, causing the price to drop.

For more information on online trading and how to choose the best trading platform, please see our tutorial: What To Look For When Choosing A Trading Platform