Online trading in stocks and shares has opened a new world of business opportunities for both the common investor and the stockbroker. Since online trading or brokerage does not require large investments in terms of labor and office paraphernalia, numerous brokerage firms have multiplied all over the world. All a stockbroker needs to start his brokerage business is a license, which can be obtained by passing two licensing exams, a computer, and an Internet connection. The question arises whether you should open a trading account with any of the brokerage firms that you come across on the Internet. Wouldn’t it be like walking into the clinic of a doctor who has earned a medical degree and put a plaque on the door?
Since you are entrusting your hard-earned money and financial future to the custody of a stock broker, you need to find out what qualities your broker should have in addition to the official business license and a website.
The first important feature of an ideal stock brokerage business should be its website. The website should be simple, professional, and informative. You should provide details on how the brokerage firm offers the most in terms of services and benefits to the client.
The website should dedicate enough space to educate clients, both newbies and experienced, about the whole process of making money by trading stocks and shares. The education section of the website should start with the most elementary information required for an absolute beginner. It should enlighten you on what a stock is, how it is traded, what risks are involved in stock trading, how the trader can hedge against such risks, what are the stock trading tools, and how the trader can use them to his advantage.
Like any other field of knowledge, stock trading has its own special vocabulary that a person must be familiar with in order to understand the stock market and the concept of trading. The website should explain the trading lingo through a glossary of technical terms. There are words like ‘chickens’,’ bulls’, ‘bears’ arbitrage,’ short ‘,’ long ‘,’ stop loss’, ‘resistance levels’,’ floor / floor ‘,’ ceiling, ‘demand and supply’, etc. about which you have to understand.
The website of an ideal stock brokerage company should provide and explain the use of stock trading tools such as stock news, historical stock charts, live streaming watchlists, customizable stock analysis platform and back testing and an advanced technical stock charting platform. In short, the stock brokerage business should allow both newbies and veterans to get the maximum benefit from it. The website must train a newbie to be a professional stock trader. Creating a kind of simulated stock trading platform or hypothetical portfolio that allows beginners to learn the tricks of the trade can do this. The website should explain the possible obstacles in trading stocks and how they can be avoided. You must train the client to use the combination of stocks and ETFs judiciously to make profitable and risk-free investments in the stock market. The client must be able to view historical performance and historical charts.
An ideal brokerage firm should provide a platform to meet the individual needs of a long-term investor, active trader, or professional trader.
Stock broker must provide web-based trading platform with trading facility with real-time quotes and charts, daily, weekly or monthly scheduled investment services, real-time watchlists, free dividend investment possibilities Free ACH electronic deposits and withdrawals accessible behind any firewall.
There are many other technical characteristics that a new entrant to the stock market must understand and use. The website should provide a downloadable trading application platform with features like streaming L1 quotes, customizable real-time charts with technical indicators, extended trading hours, customizable platform interface, time and sales data, etc.
An ideal stockbroker should provide customizable scheduled investment tools that allow the investor to build a satisfying portfolio over a period of time and save it for the future. With these customizable tools, an investor can create a custom portfolio of stocks, specify an investment amount, and schedule the account automatically.
With huge amounts of client money in its trust, the brokerage firm must provide tools to protect against potential fraud by arranging some reliable insurance for a considerable amount.