Forex for a trader
Forex trading of stock market

Forex trading of stock marketWhy Trade Forex: Forex vs. Stocks. There are approximately 2,800 stocks listed on the New York Stock exchange. Another 3,100 are listed on the NASDAQ. Which one will you trade? Got the time to stay on top of so many companies? Aren’t four pairs much easier to keep an eye on than thousands of stocks? Look at Mr. Forex. He’s so confident and sexy. Mr. Stocks has no chance! That’s just one of the many advantages of the forex market over the stock markets. Here are a few more: The forex market is a seamless 24-hour market. Most brokers are open from Sunday at 4:00 pm EST until Friday at 4:00 pm EST, with customer service usually available 247. With the ability to trade during the U. S., Asian, and European market hours, you can customize your own trading schedule. Minimal or No Commissions. Most forex brokers charge no commission or additional transactions fees to trade currencies online or over the phone. Most brokers are compensated for their services through the bidask spread.

Instant Execution of Market Orders. Your trades are instantly executed under normal market conditions. Under these conditions, usually the price shown when you execute your market order is the price you get. You’re able to execute directly off real-time streaming prices (Oh yeeeaah! Big time!). Fills are instantaneous most of the time, but under extraordinarily volatile market conditions, like during Martian attacks, order execution may experience delays. Short-Selling without an Uptick. Unlike the equity market, there is no restriction on short selling in the currency market. Trading opportunities exist in the currency market regardless of whether a trader is long or short, or whichever way the market is moving. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. So you always have equal access to trade in a rising or falling market. Centralized exchanges provide many advantages to the trader. However, one of the problems with any centralized exchange is the involvement of middlemen.

Spot currency trading, on the other hand, is decentralized, which means quotes can vary from different currency dealers. Competition between them is so fierce that you are almost always assured that you get the best deals. Forex traders get quicker access and cheaper costs. BuySell programs do not control the market. How many times have you heard that “Fund A” was selling “X” or buying “Z”? The stock market is very susceptible to large fund buying and selling. In spot trading, the massive size of the forex market makes the likelihood of any one fund or bank controlling a particular currency very small. Banks, hedge funds, governments, retail currency conversion houses, and large net worth individuals are just some of the participants in the spot currency markets where the liquidity is unprecedented. Analysts and brokerage firms are less likely to influence the market. Have you watched TV lately? Heard about a certain Internet stock and an analyst of a prestigious brokerage firm accused of keeping its recommendations, such as “buy,” when the stock was rapidly declining? IPOs are big business for both the companies going public and the brokerage houses. Relationships are mutually beneficial and analysts work for the brokerage houses that need the companies as clients. That catch-22 will never disappear.

Foreign exchange, as the prime market, generates billions in revenue for the world’s banks and is a necessity of the global markets. Analysts in foreign exchange have very little effect on exchange rates; they just analyze the forex market. 2.1 Level 1 Forex Intro 2.2 Level 2 Markets 2.3 Level 3 Trading. 5.1 Short Term 5.2 Medium Term 5.3 Long Term. Differences Between Forex and Equities. While the mechanics of trading in the forex market is quite similar to equities in that prices fluctuate based on supply and demand, ever-changing bid and ask prices and the types of orders used by traders are pretty much where the similarities end. One of the major differences between the forex and equities markets is the number of trading alternatives available: the forex market has very few compared to the thousands found in the stock market. The majority of forex traders focus their efforts on seven different currency pairs. There are four "major" currency pairs, which include EURUSD, USDJPY, GBPUSD, USDCHF, and the three commodity pairs, USDCAD, AUDUSD, NZDUSD. Don't worry, we will discuss these pairs in detail in the next portion of our forex walkthrough. All other pairs are just different combinations of the same currencies, better known as cross currencies.

This makes currency trading easier to follow because rather than having to pick between 10,000 stocks to find the best value, the only thing FX traders need to do is "keep up" on the economic and political news of these eight countries. Quite often, the stock markets can hit a lull, resulting in shrinking volumes and activity. As a result, it may be hard to open and close positions when you'd like to. Furthermore, in a declining market it is only with extreme ingenuity and sometimes luck that an equities investor can make a profit. It can be difficult to short-sell in the U. S. stock market because of strict rules and regulations. On the other hand, forex offers the opportunity to profit in both rising and declining markets easily because with every trade, you are buying and selling at the same time, and short-selling is, therefore, a part of every trade. In addition, since the forex market is so liquid, traders are not required to wait for an uptick before they are allowed to enter into a short position, as is the rule in the stock market. (For more, see: The Uptick Rule Debate) Due to the high liquidity of the forex market, margins are low and leverage is high. It just is not possible to find such low margin rates in the stock market; most margin traders in the stock market need at least half of the value of their investment available in their margin accounts, whereas forex traders need as little as 2%. Furthermore, commissions in the stock market tend to be much, much higher than in the forex market. Traditional stock brokers ask for commission fees on top of their spreads, plus the fees that have to be paid to the exchange. Spot forex brokers take only the spread as their fee for each trade. (For a more, see Getting Started in Forex and A Primer On The Forex Market .) By now you should have a basic understanding of what the forex market is, how it works and the benefits and dangers all new forex traders should be aware of. Next we'll take a closer look at the currency pairs that are most widely used by traders in the forex market. Should you trade forex or stocks? Today's investors and active traders have access to a growing number of trading instruments, from tried-and-true blue chip stocks and industrials, to the fast-paced futures and foreign exchange (or forex) markets. Deciding which of these markets to trade can be complicated, and many factors need to be considered in order to make the best choice.

The most important element may be the trader's or investor's risk tolerance and trading style. For example, buy-and-hold investors are often more suited to participating in the stock market, while short-term traders – including swing, day and scalp traders – may prefer markets wherein price volatility is more pronounced. In this article, we'll compare investing in the forex market to buying into blue chips, indexes and industrials. Forex Versus Blue Chips. The foreign exchange market is the world's largest financial market, accounting for more than $5 trillion in average traded value each day as of 2016 (date of the most recent BIS Triennial Central Bank Survey). Many traders are attracted to the forex market because of its high liquidity, around-the-clock trading and the amount of leverage that is afforded to participants. Blue chips, on the other hand, are stocks from well-established and financially sound companies. These stocks are generally able to operate profitably during challenging economic conditions and have a history of paying dividends. Blue chips are generally considered to be less volatile than many other investments and are often used to provide steady growth potential to investors' portfolios. Volatility. This is a measure of short-term price fluctuations. While some traders, particularly short-term and day traders, rely on volatility in order to profit from quick price swings in the market, other traders are more comfortable with less volatile and less risky investments. As such, many short-term traders are attracted to the forex markets, while buy-and-hold investors may prefer the stability offered by blue chips. Leverage.

A second consideration is leverage. In the United States, investors generally have access to 2:1 leverage for stocks. The forex market offers a substantially higher leverage of up to 50:1, and in parts of the world even higher leverage is available. Is all this leverage a good thing? Not necessarily. While it certainly provides the springboard to build equity with a very small investment – forex accounts can be opened with as little as $100 – leverage can just as easily destroy a trading account. Trading Hours. Yet another consideration in choosing a trading instrument is the time period that each is traded. Trading sessions for stocks are limited to exchange hours, generally 9:30 A. M. to 4pm Eastern Standard Time (EST), Monday through Friday with the exception of market holidays. The forex market, on the other hand, remains active round-the-clock from 5 P. M. EST Sunday, through 5 P. M. EST Friday, opening in Sydney, then traveling around the world to Tokyo, London and New York. The flexibility to trade during U. S., Asian and European markets – with good liquidity virtually any time of day – is an added bonus to traders whose schedules would otherwise limit their trading activity. Forex Versus Indexes. Stock market indexes are a combination of similar stocks, which can be used as a benchmark for a particular portfolio or the broad market. In the U. S. financial markets, major indexes include the Dow Jones Industrial Average (DJIA), the Nasdaq Composite Index, the Standard & Poor's 500 Index (S&P 500) and the Russell 2000. The indexes provide traders and investors with an important method of gauging the movement of the overall market.

A range of products provide traders and investors broad market exposure through stock market indexes. Exchange-traded funds (ETFs) based on stock market indexes, such as S&P Depository Receipts (SPY) and the Nasdaq-100 (QQQQ), are widely traded. Stock index futures and e-mini index futures are other popular instruments based on the underlying indexes. The e-minis boast strong liquidity and have become favorites among short-term traders because of favorable average daily price ranges. In addition, the contract size is much more affordable than the full-sized stock index futures contracts. The e-minis, including the e-mini S&P 500, the e-mini Nasdaq 100, the e-mini Russell 2000 and the mini-sized Dow Futures are traded around the clock on all-electronic, transparent networks. Volatility. The volatility and liquidity of the e-mini contracts are enjoyed by the many short-term traders who participate in stock market indexes. Let's say that the major equity index futures trade at an average daily notional value (the total value of a leveraged position’s assets) of $145 billion, exceeding the combined traded dollar volume of the underlying 500 stocks. The average daily range in price movement of the e-mini contracts affords great opportunity for profiting from short-term market moves. While the average daily traded value pales in comparison to that of the forex markets, the e-minis provide many of the same perks that are available to forex traders, including reliable liquidity, daily average price movement quotes that are conducive to short-term profits, and trading outside of regular U. S. market hours. Leverage.

Futures traders can use large amounts of leverage similar to that available to forex traders. With futures, the leverage is referred to as margin, a mandatory deposit that can be used by a broker to cover account losses. Minimum margin requirements are set by the exchanges where the contracts are traded, and can be as little as 5% of the contract's value. Brokers may choose to require higher margin amounts. Like forex, then, futures traders have the ability to trade in large position sizes with a small investment, creating the opportunity to enjoy huge gains – or suffer devastating losses. Trading hours. While trading does exist nearly around the clock for the electronically traded e-minis (trading ceases for about an hour a day to enable institutional investors to value their positions), the volume may be lower than the forex market, and liquidity during off-market hours could be a concern depending on the particular contract and time of day. While outside the scope of this article, it should be noted that various trading instruments are treated differently at tax time. Short-term gains on futures contracts, for example, may be eligible for lower tax rates than short-term gains on stocks. In addition, active traders may be eligible to choose the mark-to-market (MTM) status for IRS purposes, which allows deductions for trading-related expenses, such as platform fees or education. In order to claim MTM status, the IRS expects trading to be the individual's primary business. IRS Publication 550 and Revenue Procedure 99-17 cover the basic guidelines on how to properly qualify as a trader for tax purposes. It is strongly recommended that traders and investors seek the advice and expertise of a qualified accountant or other tax specialist to most favorably manage investment activities and related tax liabilities, especially since trading forex can make for a confusing time organizing your taxes. See Investopedia's forex broker reviews and stock broker reviews to help you start trading.

The internet and electronic trading have opened the doors to active traders and investors around the world to participate in a growing variety of markets. The decision to trade stocks, forex or futures contracts is often based on risk tolerance, account size and convenience. If an active trader is not available during regular market hours to enter, exit or properly manage trades, stocks are not the best option. However, if an investor's market strategy is to buy and hold for the long term, generating steady growth and earning dividends, stocks are a practical choice. The instrument(s) a trader or investor selects should be based on which is the best fit of strategies, goals and risk tolerance. FOREX Currency Market News. U. S. Dollar Weakens as Fed’s Powell Hints End of Policy Tightening Cycle is Nearing. The U S Dollar went for a wild ride last week against a basket of major. + USDJPY Weekly Technical Perspective: Dollar Breakout Drives Higher to Test Resistance. DailyFX com Technical Forecast for the Japanese Yen Bearish Talking Points. + Dollar Fails to Launch Major Technical Breakout, Reversal Risk Rising Rapidly. DailyFX com Technical Forecast for US Dollar Bearish Talking Points DXY and. + Featured Online Brokers.

The Dollar is BAAAAACK! What to Expect at Jackson Hole. Dollar Steady as Market Powell-Ready. Greenback Marks Time Ahead of Powell. New Blockchain ETF To Begin Trading In September On Canadian Exchange. Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages. Customize your NASDAQ. com experience. Please note that once you make your selection, it will apply to all future visits to NASDAQ. com. If, at any time, you are interested in reverting to our default settings, please select Default Setting above. If you have any questions or encounter any issues in changing your default settings, please email [email protected]

com. Please confirm your selection: You have selected to change your default setting for the Quote Search. This will now be your default target page; unless you change your configuration again, or you delete your cookies. Are you sure you want to change your settings? Please disable your ad blocker (or update your settings to ensure that javascript and cookies are enabled), so that we can continue to provide you with the first-rate market news and data you've come to expect from us. The Best Forex Trading. The sheer size of the forex, or foreign exchange, market dominates all others — even the stock market. Every payment that crosses currencies contributes to its fluctuations and its momentum. And without a centralized marketplace, forex activity buzzes practically without cease, with traders waking up and doing business everywhere, in every time zone. To get a piece of the action, you need a forex brokerage with best-in-class trading technology and stellar support. We gathered a list of 65 forex trading brokers and narrowed it down to the best 5 by analyzing research features, customizability options, and trading platforms. Thinkorswim is the best option for U. S. traders looking to trade forex and multiple other products.

Its robust and powerful platform puts every imaginable forex trading tool at your fingertips, but the level of advanced features may not be ideal for beginners. January 19, 2018 - Increased regulation coupled with higher capital requirements have forced several forex brokers to leave the playing field, making it in some ways easier to find the very best. We’ve revisited our top picks, eliminating old contenders and evaluating the stand-out strengths of the remaining firms. The Best Forex Trading. Other to consider. Other to consider. Other to consider. Other to consider. How We Found the Best Forex Trading. All good forex brokers update account information in real time, display balances, and provide history reports and statements. But exceptional brokers offer trading technology boasting a broader spectrum of features — from alerts to automated trading — helping you to execute simple and advanced trades strategically.

To make it to the top of our list, forex brokers needed to provide customizable interfaces and interactive charts. We also wanted technology that’s not desktop-bound. As mobile trading continues to grow, the best brokerages make high-performance, on-the-go research and trading tools as powerful as traditional platforms. We prioritized brokers staying ahead of the curve with dedicated, well-functioning apps compatible with a variety of devices. On top of those basics, we kept an eye out for responsive client support (how easy is it to get help and guidance when you need it) as well as introductory incentives (things like special offers, free demos, and referral programs). Both are attractive reasons to start trading with a given firm, especially when you’re first getting started. But the standard practices of the brokerage outweigh any first-timer perks in the long run. Here are a couple of key features we looked for. Major Currency Pairs are the most important, most traded worldwide currency pairs available through a forex broker. They consist of currencies from the world’s most developed economies including Europe, Japan, Canada, and Australia. A major currency pair is created when one of these currencies is traded against the U. S. dollar. Examples include Euro vs. the US Dollar (EURUSD) and the US Dollar vs. the Canadian Dollar (USDCAD). Major Currency Pairs is an important category because these pairs represent the most heavily traded and liquid currency markets for any forex trader. Cross Currency Pairs includes secondary currencies traded against each other and not against the U. S. dollar.

Examples include Euro vs. the Japanese Yen (EURJPY) or the British Pound vs. Swiss Franc (GBPCHF). Most reputable brokers offer this category of trades, and it’s especially important for a forex trading account denominated in a currency other than the U. S. dollar, or for more advanced traders exploiting discrepancies between other economies. Research is an important category for traders looking for assistance or seeking confirmation on a trade. Forex brokers provide clients with the resources to understand market activity and make fast, informed choices, with advanced charting capabilities, third-party research, research reports, and market commentary. Some forex brokers also offer access to historical data so traders can back-test strategies before allocating real money. (Experimenting with virtual trading, if it’s available, is another good way of getting your feet wet.) We also wanted to see educational resources — opportunities to learn more about forex trading and platform navigation via articles, videos, and webinars. Additionally, the best forex brokers provide a superb trading community to facilitate the exchange of trading ideas. Support should be available during all trading hours through multiple channels including live chat, email, and phone. Our Picks for the Best Forex Trading. thinkorswim A full-service brokerage for savvy investors - trade forex alongside other investment products all from the same account. Part of TD Ameritrade, that vast online brokerage, thinkorswim enables you to trade forex, stocks, futures, and options all from one account. Save time and keep abreast of your diverse portfolio without the hassle of switching between windows and platforms. Even better, these combined tools are available through just about any device.

You can even customize alerts for on-the-go trading. One trading perk we’re not seeing: automated trading. That feature is only available if you subscribe to their newsletters, which are focused on options trading. Thinkorswim sits among the top forex brokers in terms of tradable currency pairs, allowing experienced traders or international traders to get a part of currency fluctuations in more obscure economies. While thinkorswim provides a ton of virtual and in-person support (unique amongst online firms), the complexity of its trading platform may be overkill for beginners. Same goes for the lofty $3,500 minimum deposit. Check out Ally Trading if you’re a forex novice. Costs and Fees. Forex Trade: $1.00 + $0.10 per 1,000 lot Forex Trade Cost Type: Flat and pips Futures Trade: $2.25contract Minimum Deposit: $2,000 Options Trade: $9.99 + $0.75contract Stock Trade: $9.99. Trading Details. Clearing Method: Dealing Desk Maximum Leverage (International): 50:01:00 Maximum Leverage (U. S.): 50:01:00. Ally Invest Smart tools for sophisticated trades, without classing out investors new to forex. Ally Invest makes it easy to get started trading forex even if you’re operating on a budget, providing low minimums and tight spreads. You can start trading with just $500 in your account. The smart and streamlined trading interface also makes it quick and easy to watch trends and make trades. One of the best parts about Ally’s trading platform: the intuitiveness of its layout and functions. New investors should be able to get familiar with the lay of the land fairly quickly by navigating out from the trading panel.

The panel also includes shortcuts: buy and sell with one click. As your preferences develop, you can customize the look and location to suit your trading style. While Ally’s price points are ideal for new traders, the educational resources are somewhat lacking. The site can walk you through the basics, but you’ll need to look elsewhere for courses, videos, and tutorials. You’re also not able to access other investment products within the same account. Unlike thinkorswim, you’ll have to open up and individually access other accounts if you’re interested in trading stocks, options, or futures in addition to forex. Recently, Ally has gobbled up a couple of other key brokerages offering forex: Tradeking and MB Trading. Not a big point of consideration when you’re just looking at company offerings, but it’s a notable factor when looking at financial solidity across the board. Costs and Fees. Forex Trade: $13 Forex Trade Cost Type: Pips Futures Trade: NA Minimum Deposit: $500 Options Trade: NA Stock Trade: NA. Trading Details. Clearing Method: Straight Through Processing Maximum Leverage (International): 50:01:00 Maximum Leverage (U. S.): 50:01:00. ATC Brokers Super customizable and super transparent, a forex brokerage for the serious trader.

High-end trading tools and perks that will be attractive to adroit traders, like a non-dealing desk environment. ATC’s Straight Through Processing (STP) order system posts your order directly to counterparties, taking away the possibility of your broker holding a conflict of interest and trading against you. The advanced platform also allows you to customize and quickly execute orders, moving between analysis to trading without navigating windows. ATC provides backtest trading software to run simulations and testrun strategy, but goes light on other beginner-friendly features. For instance, its high minimum deposit ($5,000) and weak educational resources. Once again, look to Ally Invest for a more democratic entrance to forex. Costs and Fees. Forex Trade: $0.80 Forex Trade Cost Type: Commission Futures Trade: Contact Company Minimum Deposit: $5,000 Options Trade: NA Stock Trade: NA. Trading Details. Clearing Method: Straight Through Processing Maximum Leverage (International): 200:01:00 Maximum Leverage (U. S.): 50:01:00. Forex. com A trading platform exclusively for forex. Excellent for the seasoned and specific investor. Editor’s Note: On February 6th, 2017, FXCM reached a settlement related to the charges brought forth by the National Futures Association (“NFA”) and the Commodity Futures Trading Commission (“CFTC”) to withdraw from the US market.

A non-binding letter of intent has been signed with GAIN Capital Holdings (owner of the retail brand Forex. com) to transfer all accounts at no expense to the customer. No date has been set for the transition yet. Powerful tools and robust research make Forex. com a good choice for the seasoned forex trader. Every portion of the platform and app is customizable, plus provides stellar access to the Electronic Communications Network (ECN). The most attractive aspect of ECN pricing: no middlemen. Lower trading costs and increased transparency are the results. Forex. com is a great option for the dedicated forex trader, but if you’re interested in dabbling in other investment products you’ll need to look elsewhere. Costs and Fees. Forex Trade: $13 Forex Trade Cost Type: Pips Futures Trade: NA Minimum Deposit: $500 Options Trade: NA Stock Trade: NA. Trading Details. Clearing Method: ECN Maximum Leverage (International): 50:01:00 Maximum Leverage (U. S.): 50:01:00. OANDA Not as transparent as some, but chock-full of helpful tools to test, strategize, and perform trades. OANDA serves the forex trading needs of the inexperienced and the experts alike, with a range of user-friendly and robust platforms, desktop and web-based.

Both options translate to mobile apps so you’re never far from your investments. Another major bonus: access to historical exchange rate data. Backtest strategies before you trade in one of the largest currency databases across the globe. You can also subscribe to the data feed for even deeper analysis. One downside to OANDA — it’s a market maker. Setting the bid and the ask price means its protocol stands in opposition to the open pricing and non-interest conflict of an ECN. However, these pricing mechanisms are almost wholly automated, meaning concerns of partiality are largely unfounded. Like Forex. com, OANDA doesn’t provide any products to American investors besides forex. If being able to diversify your interests while staying within the same brokerage is important to you, check out thinkorswim or Ally Invest. Costs and Fees. Forex Trade: $12 Forex Trade Cost Type: Pips Futures Trade: NA Minimum Deposit: $0 Options Trade: NA Stock Trade: NA. The Best Online Stock Trading Sites. How We Found the Best Online Stock Trading Sites.

13 Trading Sites Analyzed. 2 Financial Experts Consulted. The Best Online Stock Trading Sites. We tapped into the expertise of a former day trader and a financial commentator (with 20 years of trading experience) to grade 13 of the best online stock trading sites. To find our top picks, we analyzed pricing structures, dug into research and tools, and took every platform for a spin. Upfront: There is no one best online stock broker. Each has its own strengths and suits different types of investors and different investment strategies. We’ll help you find the best for your style and experience. How We Found The Best Online Stock Trading Sites. It’s a tumultuous time for online stock brokers.

The players have largely remained the same, but between significant cuts in commissions and a few major acquisitions (Etrade acquired OptionsHouse; TD Ameritrade and Scottrade merged; Ally Invest now lives under Ally Bank), the competition is on its toes. We leveraged seasoned expertise to dig into 13 of the most popular online stock trading sites; here's what we found important. Charles Schwab Etrade Fidelity Interactive Brokers Lightspeed Merrill Edge OptionsHouse OptionsXpress Scottrade Robinhood TD Ameritrade Ally Invest TradeStation. Different investors are going to prioritize different things. A day trader, for example, requires speed and flexibility. A first-time trader may value educational resources and reliable customer support. But one thing every trader should care about is cost. Not paying attention to investment expenses is like revving your car engine while filling it with gas. That's why we spent a lot of time balancing price with what each site offered. Affordable pricing structures. Commissions are typically an investor’s largest expense.

In 2016, an unassisted transaction fee averaged about $8. Since early 2017, competitive brokers including Fidelity, E*Trade, and TD Ameritrade trade for as low as $4.95. The number of commission-free ETFs a broker offers also come into play. Overall commision costs can also be affected by new customer promotions. Brokers may give you a chunk of free trades, based on your deposit amount. If your deposit can get you a substantial number of free trades, that can write off otherwise higher per-commission costs. Ally Invest offers small incentives for deposits as low as $500. Fidelity Investments, meanwhile, has a higher barrier for entry — it takes a $50,000 deposit, but then you'll get 300 free trades. Low fees, as few as possible. We looked for brokers that go light on extra account fees, don’t charge extra to access data, research, and tools, and provide advice for a reasonable rate. Lots of brokers boast amenities like 247 financial experts, but most of those services come at a price. Depending on your strategy, increased fees might just be the cost of doing business, but we aimed to mitigate these costs in our top picks.

Seeing your nest egg shrink due to a tough market or bad strategy isn’t fun. It’s worse if you’re also getting dinged by unexpected fees, such as minimum account balance. We tested each brokerage’s platform and weighed in on its standout features, ease of navigation, intuitive controls, and learning resources. Whether you’re looking to make a series of complex trades or to carefully execute your first, intuitive organization and just-in-time pointers are key to a satisfying platform experience. Strong ratings from investment publications. Like any financial institution, an investment brokerage worth its weight has a strong reputation. We took ratings from noted publications like Barron’s and Kiplinger into account when separating the best from the rest. Our five favorites consistently rank top in both sites' yearly report, which marks brokerages on technology, usability, and cost. The Best Online Stock Trading Platforms. Best Platform for Cheap Trading. Best Trading Platform for Beginners. Best Platform Design. Best Trading Platform for Active Traders.

Best Research & Tools. At $4.95 a trade, with no inactivity charge, and only a $50 full outgoing transfer fee, Ally Invest’s fee structure is about as low as you'll find. Even though a rash of brokers dropped their commissions in 2017 to be competitive with Ally Invest’s $4.95 flat rate, Ally keeps its edge with a zero account minimum and enticing discount for active investors — equity trades drop to $3.95 for users with 30+ trades each quarter or a balance of $100,000. While some mobile platforms like Robinhood boast totally commission-free stocks and ETFs, Ally Invest’s platform and resources stand out with quality research and tools, including access to its online trader network. In addition to attractive pricing, Ally offers a quality platform that gives you access to the entire universe of stocks and ETFs. Where some discount brokers focus on only one kind of trader (for example, options traders or high-net-worth investors), Ally Invest provides an excellent experience for investors of all kinds. A focus on discounted costs can sometimes be a red flag for quality, but Ally Invest truly delivers with sophisticated calculators, profit-loss estimators, and more. Ally Invest also offers a robust research library that incorporates visual slides and interactive media into its market data. We’re not the only ones who think Ally Invest is a remarkable service. Barron’s has given Ally Invest’s past self, TradeKing, at least 4 out of 5 stars for the past 10 years, and Ally continues to rack up kudos for its offerings and low commissions from both Barron’s and other rating sites like StockBrokers.

com. Acquisition and rebranding confusion. Previously acquired by Ally Bank, TradeKing has been rebranded into Ally Bank’s own online trading platform, Ally Invest. Much of the interface, low prices, and offerings have remained the same, though some discounts and promotions are no longer available. Education-heavy platform. New investors need two things from their online stock trading platform: an easy learning curve and lots of room to grow. Etrade has both. Its platform boasts a library of educational videos, articles, and webinars for each type of investor. Once you’ve mastered the fundamentals, read up on market news, reports, and commentary from Etrade analysts. You can also take advantage of one-on-one assistance: Branch appointments are free to book, and online chat tools and 24-hour hotline are there to guide you from anywhere in the world. Low minimum account balance. Etrade does require an investment minimum for new brokerage accounts ($500), which may seem like more than a novice would like to throw in. But you’ll need at least that much to see real growth. And compared to the minimums of traditional brokerages, $500 is an incredibly welcoming threshold. And if you can commit to a $10,000 deposit, you can get 60 days of commission-free trades. Slightly higher commissions.

The only real drawback to Etrade: Commission fees start at $6.95. It’s not until investors make more than 30 trades a quarter that the fees drop down to $4.95, which OptionsHouse and Ally Invest offer up front. But while Etrade levies a steeper charge here, there are no surcharges for low-priced stocks or inactivity. Helpful platform for beginners. TD Ameritrade offers two best-in-class platforms, designed for two different types of investors. Both platforms are free to use for any investor with a TD Ameritrade account. The web-based Trade Architect, though often in the shadow of thinkorswim, is streamlined and easy to use. It will appeal to beginning investors, or anyone who prefers a simplified, educational interface. Its tab-based navigation lets users flip between trading tools and account overview, plus charts, stock screeners, heat maps, and more. Since the company acquired Scottrade, our favorite platform for beginners, in 2016, we predict it will continue getting better at serving junior traders. Powerful platform for pros. Thinkorswim, on the other hand, is a powerhouse designed for the advanced. This desktop application regularly racks up awards for its superior tools and features — research reports, real-time data, charts, technical studies. Things any other broker would charge a premium for. Also included: customizable workspaces, extensive third-party research, and a thriving trader chat room. There’s also a fully functional mobile app. Thinkorswim is a particular standout in options trading, with options-trading tabs (just click “spread” if you want a spread, and “single order” if you want one leg) plus links that explain the strategies on the order page. Its Strategy Roller feature lets investors create custom covered calls and then roll those positions from expiration to expiration. More expensive than discount brokerages.

TD Ameritrade has been a powerful player in the online stock trading ecosystem for years. The flipside to such robust platforms: cost. Even though TD Ameritrade lowered its fees in 2017 from $9.99 to $6.95, pretty much every other major discount broker slashed its prices, too. TD Ameritrade remains one of the more expensive options out there, even with more than 100 commission-free ETFs. Though its pricing structure is more expensive than some of the other discount brokers, there are many traders who think its best-in-class trading platforms. If you already have a firm handle on your investment strategy and want to maximize your profits, OptionsHouse is excellent. What it lacks in some of the investor education features that competitors like Etrade and TD Ameritrade can claim, it makes up with its low-cost, streamlined trading platform. Like Ally Invest, it’s been a longtime leader in rock-bottom pricing, with a $4.95 trade commission, and, unlike many brokerages catering to active investors, no account minimums or inactivity fees. Fees for a single-leg options contract are $5.45 all-in. Plus, if you have $5,000 to invest, you’ll receive $1,000 worth of commission-free trades. Along with competitive pricing, OptionsHouse has one of the most accessible platforms. Clean design and user-friendly tools help make heaps of information easier to digest. And automize: Trigger Alerts lets users set up their accounts to automatically purchase an order based on a particular scenario. For example, you can set an alert to buy any number of shares of one stock if its direct competitor falls by a certain percentage. When that’s triggered, you get an alert on any device that lets you confirm the purchase or ignore in one simple reply. Tools like tradeLAB help dissect options spreads, with green smiley faces for the statistical probability of making a profit, and red frowns for a loss. OptionsHouse also offers a “dime buyback program” that makes it easy to close any short options without paying commission fees.

Great for options traders. While beginners may prefer the in-depth guidance of other platforms, Barron’s named OptionsHouse “Best for Options Traders” and gave it a 4.5 out of 5 stars overall, and a perfect 5 for its mobile performance. Whether you prefer to trade via desktop, tablet, or mobile, its customizable interface seamlessly transitions between all three — though, admittedly, customers seem to either love or hate the app. Some fees are higher than normal. OptionsHouse doesn’t offer currency trading, and has limited commission-free and transaction-free offerings, but its 2016 acquisition by Etrade should help fill in those gaps as the two brokers continue to merge. OptionsHouse also falls short in mutual funds — it charges $20 per trade, as opposed to Ally Invest’s $9.95 — as well as currency trading, and commission-free ETFs, but for the active trader who know what they’re doing, it’s one of the best platforms available. Sleek and high-functioning platform. Fidelity’s platform wins for user-friendly design, with tools to help take the guesswork out of finding funds and nosing out strategies. Fidelity’s platform lets you explore your options with a slick and intuitive design, complete with color-coded rankings and charts that call out what’s important. You can sort stocks by size, performance, and even criteria like sales growth or profit growth. Want to sort ETFs by the sectors they focus on, or their expenses? Done. There’s even a box to check if you want to only explore Fidelity’s commission-free offerings.

A few other discount brokers do offer screeners, but none match Fidelity’s depth and usability. Best-in-class research. When it comes to research, Fidelity is in a league of its own. The intellectually curious can dive into research from more than 20 providers, including Recognia, Ned Davis, and McLean Capital Management. Fidelity’s Learning Center featured videos are organized by topic, but don’t stop after explaining the concept. They cover how to apply principles to your own Fidelity investments. You’ll need to plunk down at least $2,500 to open an account with Fidelity, and unlocking its promotional offers requires a cool $50,000. Not all tools are accessible to all users. Additionally, some of Fidelity’s advanced tools are only available to high-volume traders: Charting with Recognia requires a significant 120 trades per year to use, and its Active Trader Pro requires 36 trades per year). Guide to Online Stock Trading Sites. Smart investors pinch pennies. Warren Buffett is the best example to hit this point home. In 2008, he bet some hedge fund managers $1 million that they wouldn’t be able to make more money in a decade than a cheap, boring index fund. An index fund uses simple investing algorithms to track an index, and doesn’t require active, human management. Conversely, hedge funds stack management fees on top of trading fees to pay for the time and knowledge actual strategists are putting into your investments.

Fees can have a big impact on your net returns — that is, your total investment profits after fees. Let’s say you put $1,000 in a hedge fund and the investment gains 20% to reach $1,200. Based on the standard “two and twenty” fee structure, the fund managers will take $40 of those earnings, meaning you only end up with a 16% gain. The lower the fee, the higher the net earnings. So what happened to the bet? Buffett won, and donated the winnings to charity. He managed to beat his high-priced peers not because he scored bigger gains, but because he minimized costs. Be aware of broker fees, but your strategy can also cost you. The capital gains tax rate favors long-term investments. An investor who buys and sells their stocks within a few months will face a higher capital gains tax rate (25 percent) on their profits than an investor who buys and holds their stocks for a full year (15 percent). The larger your investment, the bigger the difference. Granted, there’s a risk to holding an investment for longer, but if you’re close to that one-year cutoff, it might be worth it to sit tight for a few more weeks. Mutual funds and ETFs come with their own set of fees, too. Like broker fees, pay attention to the expense ratio — usually a percentage of any mutual funds or ETFs you purchase in your account — even if you’re buying them commission-free.

These extra fees are another big cost to investors, but they aren’t deducted from your account balance. Instead, these fees show up in the price on the ticker tape. That’s why many high-priced mutual funds’ and ETFs’ value per share doesn’t seem to change over time — any growth is offset by fees. Also watch out for mutual funds that charge a front - or back-end load for each purchase or sale. These usually range from 0.5% to 1% and can add up quickly. Play with your own fake money. Give yourself a few thousand in fake money and play investor for a bit while you get the hang of it. “Just start. Even with just a virtual portfolio. Start and then commit to building over time,” says Jane Barratt, CEO of investment education and advisory company GoldBean. “Don’t expect anything major to happen in a short time — build your money muscles by taking risks in a virtual portfolio.” TD Ameritrade offers paperMoney, its virtual trading platform. If you open an account, OptionsHouse offers its paperTRADE account to test your strategies. Outside of actual trading sites, MarketWatch and Investopedia offer simulators to get you started.

Our experts suggest you begin by looking at your own life. “Buy what you know, where you are. If you can, identify good companies locally,” says Randy Cameron, a portfolio manager and investment advisor with 35 years of experience. “Look for companies you and your friends are talking about, ones with plans to go national.” As for how much time and money you need, “Start with what you have,” he says. There is literally no minimum to get started, and starting with just one share is better than putting things off. Don’t check your account too often. The best investors are in it for the long haul. Checking your account too often might make you react to the fluctuations in the market too quickly. Personal finance expert Ramit Sethi has written that you should check your investments, “probably every few months, with a major review every year.” On many sites, you can also set an alert if a stock dives.

Other than that, just set a quarterly recurring appointment so you know you’ll handle it at the right time. Part 1: What Is Forex Trading ? – A Definition & Introduction. An Introduction to FOREX Trading: This free Forex mini-course is designed to teach you the basics of the Forex market and Forex trading in a non-boring way. I know you can find this information elsewhere on the web, but let’s face it; most of it is scattered and pretty dry to read. I will try to make this tutorial as fun as possible so that you can learn about Forex trading and have a good time doing it. Upon completion of this course you will have a solid understanding of the Forex market and Forex trading, and you will then be ready to progress to learning real-world Forex trading strategies. What is the Forex market? • What is Forex? – The basics… Basically, the Forex market is where banks, businesses, governments, investors and traders come to exchange and speculate on currencies. The Forex market is also referred to as the ‘Fx market’, ‘Currency market’, ‘Foreign exchange currency market’ or ‘Foreign currency market’, and it is the largest and most liquid market in the world with an average daily turnover of $3.98 trillion. The Fx market is open 24 hours a day, 5 days a week with the most important world trading centers being located in London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris, and Sydney. It should be noted that there is no central marketplace for the Forex market; trading is instead said to be conducted ‘over the counter’; it’s not like stocks where there is a central marketplace with all orders processed like the NYSE. Forex is a product quoted by all the major banks, and not all banks will have the exact same price. Now, the broker platforms take all theses feeds from the different banks and the quotes we see from our broker are an approximate average of them. It’s the broker who is effectively transacting the trade and taking the other side of it…they ‘make the market’ for you. When you buy a currency pair…

your broker is selling it to you, not ‘another trader’. • A brief history of the Forex market. Ok, I admit, this part is going to be a little bit boring, but it’s important to have some basic background knowledge of the history of the Forex market so that you know a little bit about why it exists and how it got here. So here is the history of the Forex market in a nutshell: In 1876, something called the gold exchange standard was implemented. Basically it said that all paper currency had to be backed by solid gold; the idea here was to stabilize world currencies by pegging them to the price of gold. It was a good idea in theory, but in reality it created boom-bust patterns which ultimately led to the demise of the gold standard. The gold standard was dropped around the beginning of World War 2 as major European countries did not have enough gold to support all the currency they were printing to pay for large military projects. Although the gold standard was ultimately dropped, the precious metal never lost its spot as the ultimate form of monetary value. The world then decided to have fixed exchange rates that resulted in the U. S. dollar being the primary reserve currency and that it would be the only currency backed by gold, this is known as the ‘Bretton Woods System’ and it happened in 1944 (I know you super excited to know that). In 1971 the U. S. declared that it would no longer exchange gold for U. S. dollars that were held in foreign reserves, this marked the end of the Bretton Woods System. It was this break down of the Bretton Woods System that ultimately led to the mostly global acceptance of floating foreign exchange rates in 1976. This was effectively the “birth” of the current foreign currency exchange market, although it did not become widely electronically traded until about the mid 1990s. (OK! Now let’s move on to some more entertaining topics!)… What is Forex Trading?

Forex trading as it relates to retail traders (like you and I) is the speculation on the price of one currency against another. For example, if you think the euro is going to rise against the U. S. dollar, you can buy the EURUSD currency pair low and then (hopefully) sell it at a higher price to make a profit. Of course, if you buy the euro against the dollar (EURUSD), and the U. S. dollar strengthens, you will then be in a losing position. So, it’s important to be aware of the risk involved in trading Forex, and not only the reward. • Why is the Forex market so popular? Being a Forex trader offers the most amazing potential lifestyle of any profession in the world. It’s not easy to get there, but if you are determined and disciplined, you can make it happen. Here’s a quick list of skills you will need to reach your goals in the Forex market: Ability – to take a loss without becoming emotional. Confidence – to believe in yourself and your trading strategy, and to have no fear. Dedication – to becoming the best Forex trader you can be. Discipline – to remain calm and unemotional in a realm of constant temptation (the market) Flexibility – to trade changing market conditions successfully. Focus – to stay concentrated on your trading plan and to not stray off course. Logic – to look at the market from an objective and straight forward perspective.

Organization – to forge and reinforce positive trading habits. Patience – to wait for only the highest-probability trading strategies according to your plan. Realism – to not think you are going to get rich quick and understand the reality of the market and trading. Savvy – to take advantage of your trading edge when it arises and be aware of what is happening in the market at all times. Self-control – to not over-trade and over-leverage your trading account. As traders, we can take advantage of the high leverage and volatility of the Forex market by learning and mastering and effective Forex trading strategy, building an effective trading plan around that strategy, and following it with ice-cold discipline. Money management is key here; leverage is a double-edged sword and can make you a lot of money fast or lose you a lot of money fast. The key to money management in Forex trading is to always know the exact dollar amount you have at risk before entering a trade and be TOTALLY OK with losing that amount of money, because any one trade could be a loser. More on money management later in the course. • Who trades Forex and why? Banks – The interbank market allows for both the majority of commercial Forex transactions and large amounts of speculative trading each day. Some large banks will trade billions of dollars, daily.

Sometimes this trading is done on behalf of customers, however much is done by proprietary traders who are trading for the bank’s own account. Companies – Companies need to use the foreign exchange market to pay for goods and services from foreign countries and also to sell goods or services in foreign countries. An important part of the daily Forex market activity comes from companies looking to exchange currency in order to transact in other countries. Governments Central banks – A country’s central bank can play an important role in the foreign exchange markets. They can cause an increase or decrease in the value of their nation’s currency by trying to control money supply, inflation, and (or) interest rates. They can use their substantial foreign exchange reserves to try and stabilize the market. Hedge funds – Somewhere around 70 to 90% of all foreign exchange transactions are speculative in nature. This means, the person or institutions that bought or sold the currency has no plan of actually taking delivery of the currency; instead, the transaction was executed with sole intention of speculating on the price movement of that particular currency. Retail speculators (you and I) are small cheese compared to the big hedge funds that control and speculate with billions of dollars of equity each day in the currency markets. Individuals – If you have ever traveled to a different country and exchanged your money into a different currency at the airport or bank, you have already participated in the foreign currency exchange market.

Investors – Investment firms who manage large portfolios for their clients use the Fx market to facilitate transactions in foreign securities. For example, an investment manager controlling an international equity portfolio needs to use the Forex market to purchase and sell several currency pairs in order to pay for foreign securities they want to purchase. Retail Forex traders – Finally, we come to retail Forex traders (you and I). The retail Forex trading industry is growing everyday with the advent of Forex trading platforms and their ease of accessibility on the internet. Retail Forex traders access the market indirectly either through a broker or a bank. There are two main types of retail Forex brokers that provide us with the ability to speculate on the currency market: brokers and dealers. Brokers work as an agent for the trader by trying to find the best price in the market and executing on behalf of the customer. For this, they charge a commission on top of the price obtained in the market. Dealers are also called market makers because they ‘make the market’ for the trader and act as the counter-party to their transactions, they quote a price they are willing to deal at and are compensated through the spread, which is the difference between the buy and sell price (more on this later). Advantages of Trading the Forex Market: • Forex is the largest market in the world, with daily volumes exceeding $3 trillion per day. This means dense liquidity which makes it easy to get in and out of positions. • Trade whenever you want: There is no opening bell in the Forex market. You can enter or exit a trade whenever you want from Sunday around 5pm EST to Friday around 4pm EST. • Ease of access: You can fund your trading account with as little as $250 at many retail brokers and begin trading the same day in some cases.

Straight through order execution allows you to trade at the click of a mouse. • Fewer currency pairs to focus on, instead of getting lost trying to analyze thousands of stocks. • Freedom to trade anywhere in the world with the only requirements being a laptop and internet connection. • Commission-free trading with many retail market-makers and overall lower transaction costs than stocks and commodities. • Volatility allows traders to profit in any market condition and provides for high-probability weekly trading opportunities. Also, there is no structural market bias like the long bias of the stock market, so traders have equal opportunity to profit in rising or falling markets. While the forex market is clearly a great market to trade, I would note to all beginners that trading carries both the potential for reward and risk. Many people come into the markets thinking only about the reward and ignoring the risks involved, this is the fastest way to lose all of your trading account money. If you want to get started trading the Fx market on the right track, it’s critical that you are aware of and accept the fact that you could lose on any given trade you take.



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