Many investors see the stock market as a good place to build wealth.

In the past, retail and institutional investors worked with brokers, so they could place buy or sell orders.

The trading process was slow, tedious and expensive, sometimes the broker's commissions amounted to more than $20, depending on the number of shares bought or sold.

Now, it is completely different as the investor works himself, all he needs is an online stock trading platform in order to be able to buy or sell.

There are a lot of platforms you can choose from;

However, the best stock trading platform is a debatable issue.

In an article on Invested Wallet, writer Jonathan Sanchez explains how to choose the best stock trading platform, and what factors you should check before you make a decision to choose this platform.

First of all, how does the stock market work?

The new investor must first understand how stocks work.

The basics are simple;

Investors buy or sell shares via an entry-level stock trading platform, and place buy or sell orders with the online broker.

In turn, the broker sends the order to the exchange, such as the New York Stock Exchange, and the shares are then delivered to or removed from your account depending on the action taken.

How do you choose the best stock trading platform?

When choosing the best stock trading platform, investors need to consider many elements.

Not all stock trading platforms are created equal;

For example, some full-service platforms offer the ability to buy and sell almost any type of stock from several exchanges.

On the other hand, more modest platforms may offer exchange-traded funds (ETFs) from a limited subset of exchanges.

The first step in choosing the best trading platform is to determine your needs.

Here are several questions to ask yourself:

  • What type of investor are you?

  • Are you a buy and hold investor, or are you an active trader?

  • What type of securities do you invest in?

  • The main options for novice investors are stocks and ETFs.

    But, are you planning to trade in options or buy mutual funds?

  • Do you need access to Certificates of Deposit (CD), bonds, cryptocurrencies, and more?

  • How much do you want to invest?

    Is it a few hundred dollars, thousands of dollars, or more?

Once you have asked yourself these questions, it is time to look at the features in stock trading platforms.

Commissions and Fees

Today, most trading platforms do not charge fees for trading online stocks and ETFs.

The commission is often zero for buying or selling most stocks and ETFs.

However, some online brokers charge a minimum fee per share or transaction.

Some of the new trading platforms require a fee such as a subscription service, which is a small monthly fee or a percentage of the invested assets.

For example, you would pay $2.50 on a trading platform with an annual fee of 0.25%, assuming you invested $1,000.

Additionally, there are inactivity fees on a few platforms, which means if you don't place a trade in a certain period, there will be a fee.

Options and mutual funds may have commissions or fees depending on the platform.

In addition, there are likely to be fees for more complex or risky securities.

If you are a beginner, then choosing an online trading platform with no fees for stocks or ETFs is probably the best option for you.

However, one thing to remember is that if you use broker-assisted trades, you will pay a much higher commission.

Security Categories

Some trading platforms only offer stocks or ETFs;

If you are a beginner, these two options may suffice, as you can always change platforms later.

You should check to see how many ETFs are on offer and their costs.

However, if you are a more experienced investor, you may want to get a trading platform that offers stocks, ETFs, options, and bonds;

The experienced investor wants access to commodities, forex, cryptocurrencies, and futures.

The ability to trade these types of securities often requires approval to take on more risk.

Minimum account

Another important criterion to check is the account minimum, most popular and best stock trading platforms do not set a minimum.

Differences in the trading platform

Next, look at the differences between the trading platforms, some of the best stock trading platforms allow users to access their accounts through a desktop web browser or mobile app.

In addition, some platforms cater to the investor's needs through automated advisors or bots.

Search and screen tools

The best stock trading platforms offer search and examination tools, allowing you to search for individual stocks or ETFs.

Investors can compare basic metrics such as "price-to-earnings" (P/E) ratios and dividend yields.

They can also look at technical indicators.

In addition, the best stock trading platforms provide an up-to-date news feed, access to Securities Commission (SEC) files, quarterly and annual reports, and more.