Choosing a Brokerage Account
The first thing you’re going to need to be able to trade is a proper brokerage account.
Yes, there are “apps” that allow you to trade, and some of them seem to offer “free” commissions and all sorts of benefits. What you’re really going to want is an account that offers real trading and research tools. There are a few companies out there that you can get this, and you can choose the one that best fits your needs, but I will suggest the Charles Schwab package.
I have been a customer ever since they bought out TD Ameritrade which was where we held our account prior to this. Along with that purchase or TDA, came one of the best set of tools I can imagine in ToS, Think or Swim. This is a multi-screen connected cockpit where you can control all your trades, monitor multiple stocks and options at once, and even setup a multi-screen view system that looks like what you see in videos where professionals are trading. You don’t have to be a professional to use it, there’s an abundance of videos to train yourself, so don’t let how it looks feel intimidating.
Must Haves
Here is a list of must haves for your brokerage account. Some are more vital than others, however it’s important to have these tools and abilities to be able to function.
- Trading cockpit like ToS (shown above)
- Easy deposit and withdrawal functions.
- Ability to transfer internationally (if you’re not a US citizen.)
- Access to trading options. (levels 0 – 3)
- mobile & table app interfaces
- free commissions*
- low cost options trades ++
- customer service that is available for Calls/Chats
- SIPC or FDIC Insurance.
- Research and Educational Resources
- Educational Content
- Paper Trading/Simulator
* Most trade commissions can be free under these types of plans. Some stocks that are considered ADRs. (American Depositary Receipt is a certificate issued by a U.S. bank representing shares of a foreign company’s stock)
++ Option trades are typically around $0.65 per contract which is pretty standard for online brokerages.
Paper Trading Simulator
When I first started out, this was a vital tool for me to learn how different trades would execute.
These simulators are valuable for learning and practicing different trade types and options strategies without risking real money. You can use it to familiarize yourself with basic order types like market orders, which execute immediately at the current price, and limit orders, which let you set a specific price to buy or sell. For options trading, the simulator lets you practice buying or selling call and put options to speculate on whether a stock will go up or down, as well as more complex options strategies like covered calls or vertical spreads.
By placing these virtual trades and observing the outcomes in real-time market conditions, you can see how different variables like changes in the stock price, time decay (theta), and volatility (vega) affect your positions, helping you build confidence and a deeper understanding before you commit any capital.
I am not an agent for Schwab, nor is there any benefit to me if you should ever choose it, I only place this link here as an easy way to go check out what they have to offer, and see if it’s right for you.
https://international.schwab.com/open-account-intro
Good luck on your trading journey.