It seems that an era has really passed since, in order to operate in the markets, a trader had to call his broker on the phone to place orders to buy or sell securities. On closer inspection, this was in reality no more than normal routine day of an investor just a few years ago.
Today we consider the presence of smartphones permanently connected to the Internet, with a broker app that gives us very fast access to the markets online. This market has grown tremendously in just under 10 years, with an increasing number of operators and therefore a wide choice for investors.
But how do you identify the best app for a trader among the many alternatives? The purpose of this article is precisely to provide the reader with important useful information to trade online with some of the most popular financial brokers.
Please note that in reality all the information provided in this review should not be taken as an invitation to invest with the said brokers. The sole purpose of the article is to disseminate a range of information on the subject to support the individual reasoning of individual traders.
The difficulties of identifying the best broker on the market
Let’s start by saying that the scientific and absolute identification of the best financial broker on the market is unfortunately an operation that is probably impossible to complete. Different traders have different needs which as you understand are best met by different online brokers.
The financial brokerage market is made up of a number of operators that are constantly growing, an aspect that suggests that the industry is in fact far from being monopolized by a single player. Demand for services is so varied that the market is constantly expanding its offer, with real sectoral competition to introduce the best innovation.
The main trends that will move the market in the coming years can already be identified by those with good experience in the sector and can be summarized below:
- social trade: many traders want to feel part of a real one community of online investors, with the opportunity to discuss strategies and copy the movements of those who work in the sector with more experience
- Trading at no cost: investors seem to be particularly drawn to the idea of having limited (or in some cases completely absent) costs for trading financial markets
- Trade cryptocurrencies: many traders, especially those belonging to the new generations, have a strong interest in trading cryptocurrencies, a growing demand that does not let go of the market
Below we will provide more information about the three aspects described above, referring to the online brokers that are in a more advanced position than others in each of the fields.
For decades, financial trading has been experienced in two different ways:
- The trading floor: in the headquarters of the world’s major exchanges, brokers and institutional traders could experience a “group” trading experience, with an exchange of opinions between experts and the ability to copy strategies with ease
- Individual trade: While professional traders have had access to the trading floor for decades, small investors often had to be content with trading in a completely individual way, consulting the market trend in the major financial newspapers without access to a trading system. more collegial and quick investment
The Coming of the Internet and Gods social media has lit a light bulb in the minds of some financial brokers, sparking the intuition to restructure the investment world social. Today, many online trading platforms allow their members to exchange opinions and copy successful strategies, creating real strategies community which basically represent a new virtual trading floor also open to retail investors.
One of the best known brokers in this field is eToro, with a management that decided in a completely innovative way a Copy trade in its own portal through which each investor registered with the community can view and copy the strategy of one or more successful traders.
Trading without transaction costs
One of the main “enemies” of traders is represented by transaction costs. Some traditional brokers may require payment of sometimes significant fees for individual transactions for the purchase and sale of financial instruments.
This was especially the case in the past, when the entire market supply was in the hands of a few large brokers who, taking advantage of this situation, enjoyed a certain freedom in imposing transaction costs. The situation today is very different, with a real liberalization of the industry leading to the birth of small brokers that have grown over the years and acquired millions of clients worldwide.
A particularly widespread trend in Europe is the trading of derivative contracts, known as: Contracts for differences (better known by the abbreviation CFD). Without going into a complex explanation about this, beyond the scope of this article, we can say that the trading of these products is generally done at a very low cost compared to the market average.
One of the best known brokers in the market for imposing trading fees very close to zero is probably XTB. A similar argument also applies to extra trading commissions, which are significant costs when trading with some brokers.
The boom of cryptocurrencies
One of the financial sectors that enjoy the most investor interest is that of cryptocurrencies. These new payment methods are enjoying enormous success in the financial markets.
However, traditional brokers seem to prefer to stay away from this sector at the moment, which is likely to be perceived as underregulated and extremely volatile for a clientele that is normally unwilling to take high risks.
In this stalemate, online brokers are taking advantage of the situation, with real competition to expand the catalog of cryptocurrencies that can be traded through their platforms. This is the case with brokers of the caliber Capital.com, who offer their clients the opportunity to trade hundreds of different cryptocurrencies.