Question: Online Stock Trading Firms?
I would like to start Trading Stocks Online on my own. Nothing major just about $1500 to start off. Which is the best firm to start off with? I only know of E*Trade, Scottrade and Ameritrade are there better ones I do not know of?
Answer:
You're looking for a Trading Platform, rather than a trading firm. Brokers are all pretty competitive and similar, although some offer more research and amenities than others.
Trade Station is probably the best trading platform out there, but also the most expensive. I've seen a lot of people switch to ThinkOrSwim (TOS) through Ameritrade. But TOS doesn't allow you to export your data to external programs like Excel; the data is locked up. Don't even try using a web-based platform.
Another high-end trading platform is RealTick. They service a lot of funds and broker houses. Townsend Electronics, the Parent company of TerraNova, are the people that digitized and electronified the Nasdaq. They are technological industry leaders and have a powerful and well built trading system. Upon finding the website for you, it appears TerraNova has been acquired by Lightspeed, and I have no experience with them.
http://lightspeed.com/index.php?tnfg=tru…
http://www.realtick.com/
Just Google "broker reviews" or "trading platform" and you'll come up with a lot more links like this one:
http://www.consumersearch.com/online-bro…
There are many comparison charts for online brokers, plus look in Barron's or other financial news or papers like IBD:
http://www.fool.com/how-to-invest/broker…
http://www.stocksandmutualfunds.com/brok…
http://www.investorguide.com/article/onl…
http://www.online-stock-trading-guide.co…
http://stockmarket.makemoneyideas.in/
http://simulator.investopedia.com/home.a… (simulator, and finance terms and definitions)
I've been using NinjaTrader for several years without any problems. It's very fast, reliable, has a back-tester for your strategies, and you can program your own methodologies. It is simple to use and trading through the Ladder quote system cuts down on mistakes. You can download a free trial and check it out. The futures and forex data feeds are free through Zen-Fire, but you'll pay for stock data, minimum $45/mo. You can use it for free for several months before or after funding the account. There's no high-pressure sales going on here, no amenities or research, just a good trading platform with good support and a good forum and more add-ins and trading systems than you can possibly test in a year.
http://www.ampfutures.com/index.php
Before you trade, develop a trading plan. That will give you the setup, trigger, stop, profit target, risk, and risk/reward ratio. If you don't have a plan or can't trade the plan, you got nothing.
There are hundreds, if not thousands of setups and triggers (indicators/trading systems), so pick one. But concentrate fully (the most important part of success-fully) on sound trading strategies. This is the hardest part, because it generally goes against human emotion. This is why most traders fail -- think about it -- we all have access to the same 1,000 different trading systems and same data and information. Only a few can overcome the psychological barriers preventing them from being consistent.
If you trade a plan precisely for 100 simulator trades and are still profitable, you're ready to use real money, or revise the plan.
To develop a trading plan, check out Nassar, David – Rules of the Trade
Also: Justin Mamis' The Nature of Risk: Stock Market Survival and the Meaning of Life. I believe this book to be foundational to new traders because it discusses, what else?, the nature of risk in the market.
That's about it for the discount brokers, E*Trade, Scottrade and Ameritrade. Ameritrade is one of the better ones because they had been TD Ameritrade which is part of the TD Bank Group which makes them closer to traditional bankers. Scottrade is also good and have street offices around the country which is nice in case you ever don't have the Internet. You can walk in the office and open an account because you seen the TV ads. I personally don't like E*Trade as they really are only etraders. They pretty much do nothing else but boast their computer software. Charles Schwab is very good but you do need enough money to do business with them. In any case, they are probably the highest grade of discount brokers.