With access to the modern internet and the development of online stock market trading brokers, trading stocks has become easier than ever before.  Today, online trading is the most common type of stock market investing and its creation has dramatically increased the total number of private investors.  In fact, it is estimated that there are currently 10 times as many private investors as there were only 20 years ago.  Although trading stocks online is extremely fast and convenient, there are still some factors that you must consider before you begin investing.  The most important choice you will probably face in the process of getting set up for online trading is determining which online stock market trading broker to use.

What should I look for in an online trading broker?

1. Limited Fees and Low Commissions

Since online brokers charge you for every trade you make, it is important to choose a broker that only takes a small commission per trade.  These commission fees can vary greatly from broker to broker.  In addition, some online brokers require minimum account balances and maintenance fees, while others do not take any of these aspects into consideration.  Finally, it is also important to look out for hidden charges which can exist as a result of various transactions.

2. Online Trading and Investment Tools

Most online brokers offer some sort of educational resources to make buying and selling stocks easier.  Some of these tools include investment calculators, analyst reports, and visual displays such as graphs and charts.  The availability and design of these critical investment tools vary greatly from broker to broker, so it is important to learn exactly what each broker offers before making your decision.

3. Ease of Use

Since the design of every online broker site is different, some websites are easier to navigate and understand than others.  While there are many sophisticated investors that understand how to use most software, inexperienced investors may have an easier time with one online broker over another.  The best online brokers offer free assistance such as tutorials, articles, and blogs.

4. Support and Customer Service

The availability of good customer service is essential for success while using any online broker.  The best services provide excellent support to users through both telephone and email and are able to answer just about any questions that may arise.

What are the best online trading brokers?

1. Fidelity

Fidelity Brokerage is widely considered to be one of the best online brokers currently available.  The company offers a full range of services to investors with state of the art technology to make online trading easier and more convenient.  The firm’s website is easy to understand and provides investors with excellent stock education, good investment planning, and helpful visual displays.  In addition, Fidelity’s customer service is among the best on the market and offers outstanding banking services.  Fidelity charges $7.95 per online trade with no inactivity, handling, or maintenance fees.  Although this price may seem high, it is well worth the cost if you would like access to Fidelity’s quality online resources and excellent customer support.  However, if you are interested in using Fidelity, the company requires a minimum opening balance of $2,500 before you can begin investing.

2. TradeKing

If you are looking for a broker with good customer service but lower commission fees, TradeKing is probably your best choice.  At only $4.95 per trade, TradeKing’s commission fees are among the lowest of quality online broker firms.  In addition, there are no hidden charges or minimum balance required to open an account.  Among discount brokers, TradeKing has among the best education resources, trading tools, and customer support.  However, on the downside, TradeKing investments products are far more limited than Fidelity and since the company only operates online, there is no in-person advice available.  Furthermore, TradeKing lacks a fully developed online banking system for investors that want their banking and brokerage services in one place.

3. Charles Schwab

Charles Schwab has excellent investment tools, good education resources, and an easy-to-use website.  In addition, its outstanding customer service is available 24 hours a day every day of the week.  Furthermore, unlike TradeKing, Charles Schwab offers in-person advice in hundreds of branches across the country.  However, on the downside, Charles Schwab charges a relatively high commission fee per trade in comparison to TradeKing and there is a required minimum account balance.  If you choose the use Charles Schwab, you have to pay the company $8.95 per online equity trade and either start with a $1000 account minimum or deposit at least $100 into your account per month.

4. Scottrade

With good online investing services and hundreds of branch offices across the country, Scottrade customers are among the most loyal of any online brokerage firm.  The company charges $7.00 per stock trade and requires only a $500 minimum account balance.  Although it appears the customers are extremely satisfied with Scottrade, online tools are relatively basic and the website does not offer sufficient research help.  In addition, like TradeKing, there is a fairly narrow range of investment products.

5. TD Ameritrade

TD Ameritrade offers excellent research and trading tools and has good customer satisfaction.  Since it acquired ThinkOrSwim, TD Ameritrade has become significantly more popular with much higher reviews and rankings.  In addition, the website is very easy-to-use and there is great customer service.  However, at $9.99 per trade, trade commissions are relatively high and the company offers minimal banking services.