Stock Trading: Step 1 — Choosing a Trading Platform

Startup Sapience
5 min readJul 5, 2021

Stock Market Investing for Beginners

This mini series is tailored for people who are interested in trading stocks but do not quite know where to begin. By the end of this series, you will have acquired the basic knowledge of stock market investing.

Step 1: Choosing a Trading Platform

Now first of all, you will need to choose a platform to conduct your stock trades. If you hold a bank account, chances are that your bank might provide their own trading platform. I personally like to use brokers that provide an online platform. But there are many types of investment platforms nowadays, from full-service brokers to robo-advisors. The biggest stock brokers in the US are Charles Schwab, Fidelity and E*Trade.

The following is a list of factors you should consider when selecting an online platform. Let’s go through the checklist.

1. Look for reviews online

a. Since we live in the age of information sharing, I urge you to leverage it to the maximum. Try to read as much as you can on the reviews. What I suggest you to do is to read and compare the worst consumer reviews of the platforms. And to be honest, this should be the first thing you do, even before comparing fees and offerings. The two websites that I use to check the reviews are Consumer Affairs and Trust Pilot.

b. What you should keep an eye out for is how the companies deal with various situations. Do they allow for easy withdrawal of cash from their accounts? How fast do they reply to customer complaints? Do they overcharge customers with hidden fees? Do they close customer accounts without reasonable warning? By no means you will find the perfect platform. Choose the ones that deal with delicate situations relatively better than the others.

2. Browse their offerings

a. Now that you have found a few reasonable platforms to trade on, look at what they offer. You can do so by exploring their website.

b. The first thing I suggest you to look for is if they are registered with both the Stock Exchange Commission or SEC and with the Financial Industry Regulatory Authority or FINRA. Most broker-dealer must register with both agencies in order to carry out their operations. You can check that on the SEC’s website and FINRA’s broker check website:

c. After that, check if they offer other services apart from brokerage services? What investment products do they offer? Do they offer mutual funds and ETFs? If they offer checking accounts and the likes, make sure to check if they are Federal Deposit Insurance Corporation or FDIC insured. The FDIC insurance simply protects depositors of failed FDIC-insured depository institutions against the loss of their deposits up to a certain amount.

d. If you are dipping your toes in stock investing, you will likely benefit from reading investment research. You can check if the platform will offer you access to their investment research for free or for a fee.

3. Investigate Commission and Trading Fees

a. Most of the online platforms claim that they offer a $0 commission service. Make sure to understand all of their underlying conditions. For instance, most will add a $25 fee if they place a broker assisted trade or $5 for a phone assisted trade.

b. If you want to trade foreign stocks, options, mutual funds or ETFs, there might additional fees associated with them.

4. Deposit minimum

a. Although less common nowadays, some platforms might need a minimum deposit in the accounts in order to keep them active. Make sure to read about what happens if your account value becomes less than the minimum. Most of them will likely liquidate your portfolio or even incur a borrowing on your account to reach the minimum level.

5. Recurring monthly fees

a. Although on the surface many might advertise a $0 commission structure, there might be add-ons that require customers to pay a monthly recurring fee. There might be a pro account option that gives customers access to more detailed research, margin lending and priority customer service. Add-ons might even be in the form of gaining access to real time quotes from the market. Be sure to read their full fee schedule.

Ideally, before pulling the trigger on which platform to use, I would suggest that you test them. There might be some platforms that would require you to deposit money first before testing it. In a perfect world, you would try at least two platforms. See how user friendly they are. Are they easy to navigate? What’s their downtime if any? Is it easy to upgrade to pro features in the future? Is it easy to deposit and withdraw money using an online portal? How do you place a trade? What are the different types of orders you can place? Overall, you would want to choose the platform that gives you a positive trading experience. I should point out that it would be best if the platform were available both on the desktop and on the mobile phone. You might never know when or where you will place your trades.

Once you have chosen a convenient platform, you can now place your first trade after depositing money. But now the question is, what stocks will you trade? Well, that depends on your agenda. Do you want to day trade? Are you a fundamentals or technical trader? What’s your time horizon? What’s your risk tolerance? Do you prefer growth stocks? Keep in mind that this mini series is targeted for people who would like to trade stocks on their own. There are many trading strategies that one could follow. But before getting into any of that, you should actually learn what type of investor you are. Everyone will have their own risk thresholds. You could supplement your financial knowledge by starting to read more about the financial markets. There are tons of free resources about stock markets. I will leave some links at the end of the series. I would suggest that you start trading with small amounts at first.

Step 2 coming up



Startup Sapience

Startup Sapience is a documentary web series that explores the business models of promising startups and industry trends.