Whether you are a beginner trader or have been trading for quite a while, having the right trading account is so key to trading success.
I have found that the best broker may vary on the specific trader and his/her needs and goals. So how can you select the BEST one for yourself?
There are a lot of brokerage companies out there… and it can be easy to shut down from analysis paralysis and just chose what seems to be the “easiest” – or worse, the cheapest – brokerage in sight.
Let’s go through the pros and cons of the top brokerage companies, so you can make an informed and confident decision.
Personally, I use several brokerage companies to fulfill my trading needs and reach my goals. So as we go through each one, keep in mind that you can open more than one account.
**Of course, it is impossible to review every single stock trading platform and broker out there. These are the ones I am familiar with and feel confident in reviewing. It is ultimately up to you who you decide to open an account with. I am not an affiliate of any of the following companies.
First Things First: Know Your Financial Goals
It is impossible to pick the best brokerage account for your trading goals… if you do not know what those trading goals even are.
If you are a beginner, you may need to gather more education and information before determining what those goals are. You can always re-visit your trading needs down the line… don’t get stuck for too long if you need to just get moving and begin to trade.
To start, ask yourself the following questions:
- Why do I want to trade in the Stock Market?
- Who will be affected when I start to trade?
- What is my monthly income goal? My yearly income goal?
- What types of trading am I going to pursue to to accomplish those goals – day trading, options trading, long-term trading (investing)?
Did you know that those who write down their goals have a higher chance of actually accomplishing them?
We created a custom Financial Goals worksheet tailored to getting started in the Stock Market. Click HERE to get this PDF download for free.
Now that you have your financial goals clear in mind, let’s find the best tools to accomplish them.
The Top Brokerage Accounts
Charles Schwab
Charles Schwab founded the corporation in 1971 in San Fransisco, California. By 1974, Charles Schwab was paving the way for discount brokerage companies. Because they have been around so long, they are definitely found trusted.
Pros of Charles Schwab:
1) Very comprehensive and well-rounded
Charles Schwab has great research tools and allows for stocks, bonds, ETFs, option contracts, and mutual funds investing.
2) Covers most types of traders
This particular brokerage company has lower commission rates which makes it cheaper for day traders to use. Because they do not have maintenance fees, it also is beneficial for long-term investors to use.
3) Allows for option trading
One of the biggest benefits of Charles Schwab in my book is their StreetSmart Edge platform for trading options. It’s easy to use, and I can do most of my option contract research in one stop. I will say that you need to know how to trade options before utilizing this platform, as you have the control to make your option trading decisions, not the brokerage company itself.
4) Great customer service
Charles Schwab has 24 hour phone support and live chat service. In my experience I have found them to be very helpful.
Cons of Charles Schwab:
1) No paper trading
Charles Schwab does not allow for paper (practice) trading, so you must be ready to put real money to work when you open an account with them.
Charles Schwab Stats:
- Good for most types of traders and levels of traders
- $0 commission per trade, $0.65 per contract
- $0 account minimum
I personally do most of my option trading inside of Charles Schwab.
If you want to learn more about how Charles Schwab works and a free tutorial on how to open an account with them, click here.
Robinhood
Robinhood is a little bit newer on the scene; it was founded in April, 2013 by Baiju Bhatt and Vladimir Tenev. Being newer may give them a technologic edge.
Pros of Robinhood:
1) Easy to use
Robinhood can be great for beginner traders because it is pretty easy to look at stock charts and to place trades.
2) You can get a free stock when you refer someone
If you use a referral link (like the one we have CLICK HERE) to open an account, you get a free stock and the owner of the referral link gets a free stock. So if you start trading with friends, it makes it easier to start with free stocks.
3) Easy to do research
You can look at the earnings replay very easily on Robinhood which lends itself to doing your fundamental research before placing a trade.
4) Good for beginner option traders
Robinhood allows for trading options, and typically walks you through and gives example option trades. This is great for beginners, but definitely not for those who want to do more advanced option trading.
Cons of Robinhood:
1) Not very detailed charts
While the charts are easy to use, it does not allow for you to edit them much, such as adding additional indicators.
2) Not advanced
If you have been trading awhile, Robinhood may be a bit basic and not give you the customization tools needed to fulfill your trades.
Robinhood Stats:
- Good for beginner stock and option traders, not necessarily advanced traders
- $0 commission per trade
- $0 account minimum
To find out more information about Robinhood and how to get a *free share of stock*, click here for part 1 of our free tutorial on how to open an account with them and click here for part 2 of how to use them for trading options.
TD Ameritrade
TD Ameritrade was founded in 1975 in Nebraska by Joe Ricketts. It’s longevity shows that it is a trusted brokerage for many traders.
Pros of TD Amertirade | ThinkorSwim
ThinkorSwim is the trading platform you can download from TD Ameritrade, and we will be focusing on that.
1) Excellent tools
ThinkorSwim has great advanced charting and tools, such as heat maps and news right inside the platform.
2) Very customizable
One of the greatest things about ThinkorSwim is that you can customize your charts, the news, the indicators, pretty much anything they have to offer and save it to your particular platform that you use.
3) Paper/practice trading
This platform also allows for paper trading, so you can place trades that simulate the real environment without actually having to use your real money. A toggle button allows for you to easily switch back and forth between your real and practice trading accounts.
4) Allows for option trading
With thinkorswim, you can also option trade – great for novice option traders as well as savvy option traders.
Cons of TD Ameritrade | ThinkorSwim
1) Higher commission
TD Ameritrade definitely has one of the higher commission costs at $6.95 per trade.
2) All the bells and whistles could be confusing
Especially to newer traders, but makes it great for those who know what they are doing.
TD Ameritrade Stats
- Good for practice trading, and for intermediate-advanced traders who want customization tools
- $0 commission per trade, $0.65 per contract
- $0 account minimum
If you would like more information about he ThinkorSwim platform and how to set it up and use it, click the image below for our free tutorial.
Webull
Webull is one of the most recent brokerage companies, founded in just 2017 and is regulated by the Securities and Exchange Commission (SEC).
Pros of Webull
1) Like Robinhood, you can get a free stock
When you open a new account with a referral code, you get a free stock. Click here for our referral code.
2) Easy to add stocks to your watchlist
Anytime you look up a stock, you can add it to your watchlist for later by clicking the “plus” icon in the app.
3) Get the news
When you research a stock inside the app, it will pull up any related news articles right below the stock’s statistics. This makes it easy to do both fundamental and technical analysis in one place.
4) Communicate with other traders
You can comment on the stock you are viewing and read other traders comments, too. This may be helpful if you are considering trading that particular stock.
Cons of Webull
1) Not very advanced
Because it does not offer super advanced tools, this may not be for advanced traders.
2) Limited Security Trades
It only has US-listed stocks and ETFs.
Webull Stats
- Good for newer traders to get a free stock and great tool for research
- $0 commission per trade
- $0 account minimum
Which one is best for you?
You may need to open an account with more than one company to get your trading needs filled.
For example, if you are a new trader and want to start with practice trading and also have an easy to use platform, you might need to open an account both with TD Ameritrade and with Robinhood. If you are serious about trading options, Charles Schwab and StreetSmart Edge may be more your fit.
The best thing to do is just START somewhere by getting an account open.
If you need to adjust your accounts down the road as you gain more knowledge and expertise… you can. You aren’t locked in to one account for the rest of your life.
I personally have an account with all 3 platforms and use them differently.
I use Charles Schwab and StreetSmart Edge to research potential option trades and place my stock and options trades. I like being able to assist my followers and members inside of Power Trades University with their accounts with Robinhood and make sure they are able to get a free stock with our link. And TD Ameritrade I often have open to show our members how to practice trade, and I also like the research tools they have available.
Now the question is…
Which brokerage company are you going to open your account with?
Comment below.
**Finding a reliable stock trading account is ultimately your decision. I am not an affiliate of any of the above companies, and therefore cannot further assist with set up or customer service issues with them.
**Of course, it is impossible to review every single stock trading platform and broker out there. These are the ones I am familiar with and feel confident in reviewing. If you find another account that you have done research on and feel comfortable with, that is wonderful.
If you are a new trader and are just getting started, be sure to check out the first three steps you need to take in our blog post and free PDF download “Getting Started in the Stock Market” – click here.
This will give you the road map you need on how to get started with trading and reaching your financial goals.
