- Trading Skills
Brokerages from all over the world offer hundreds of different trading platforms, each with their own set of markets and tools to trade with. Get to know which platform and brokerage is right for you.
Trading Platforms & Tools
Frequently Asked Questions
How do beginners trade stocks?
The first step anyone new to the stock market needs to take is determining how you want to invest (i.e., being very hands-on with your portfolio, hiring someone to manage your investments, etc.) and what kind of investing account will best suit those needs (i.e., brokerage vs. robo-advisor). Once you’ve made both of these decisions and picked the financial institution you want to open an account with, you shouldn’t have much left to do other than setting up the account itself, allocating your stock budget, and possibly putting down a minimum deposit. After that, your broker will handle the actual investing process in accordance with your wishes.
Learn MoreCash Account vs. Margin Account: What Is the Difference?
What kind of trading is the safest for beginners?
The ultimate goal of any trader is to buy low and sell high, so the buy-and-hold strategy is likely a beginning investor’s safest bet. Buy and hold is a passive strategy wherein an investor holds the stocks they’ve bought regardless of market volatility. While an active investment strategy allows for better risk management, there’s also a danger of missing out on long-term returns in favor of short-term gains.
Learn MoreStimulate Your Skills With Simulated Trading
What is a trading tool?
A trading tool, as the name suggests, is anything that allows a trader to invest effectively. Trading tools can include physical items with which one would need to operate in the financial markets, such as a computer and Internet access. However, what most people may think of when they hear this term are digital services that enable a trader to make smarter investments, such as a trading simulator.
Learn MoreBacktesting and Forward Testing: The Importance of Correlation
What tools do you use for trading?
The only thing that is absolutely necessary for trading (outside of physical hardware like a computer, phone, or tablet) is a trading platform. Beyond this, one of the most valuable tools investors have when making stock trades are stock screeners, which make it possible to quickly sort through the hundreds of stock options available. There are also stock charting programs, which can be used to analyze a particular stock and/or market sector over periods of time.
Learn MoreTips for Stock Charts That Enhance Your Analysis
Key Terms
Transaction Costs
The term “transaction costs” refers to any expenses resulting from buying or selling goods or services. In investing, transaction costs would include a broker’s commissions and spreads, and they are one of the key determinants of net returns.
Learn More
Electronic Communication Network (ECN)
An electronic communication network (ECN) is an automated system that executes buy and sell orders within a financial market. These computer-based systems allow major brokerages and individual traders to trade with one another without requiring a third party’s involvement.
Learn More
Stock Screener
A stock screener is a type of trading tool that enables investors to easily filter out stocks and exchange-traded funds (ETFs) that do not fit a criteria of their choosing. Stock screeners are often available as part of a broker’s online offerings, typically without any additional cost.
Learn More
Blotter
A blotter is a record of an individual or firm’s trading activity and history within a specific period of time. Blotters typically include the name of the traded securities, the trading time, the quantity/price, the name of the ECN market, and what types of orders were made.
Learn More
Bloomberg Terminal
A Bloomberg terminal is a proprietary electronic trading system that traders can use to access Bloomberg’s real-time market data and other services. Bloomberg terminals are typically restricted to large institutional investors, portfolio managers, and financial analysts due to the price ranging from $20,000–$24,000 per user per year.
Learn More
Market Identifier Code (MIC)
A market identifier code (MIC) is a unique four-character code that identifies a stock market or other trading exchange. An MIC code is utilized within global trading and referencing computer systems when processing and clearing securities trades.
Learn More
Over-the-Counter Bulletin Board (OTCBB)
The over-the-counter bulletin board (OTCBB) was an electronic quotation service that provided over-the-counter (OTC) trade data for U.S. stocks. The Financial Industry Regulatory Authority (FINRA) shut down the OTCBB on Nov. 8, 2021, as the majority of OTC stock trading was now occurring on the OTC Markets Group's platforms.
Learn More
Better Alternative Trading System (BATS)
Better Alternative Trading System (BATS), later known as Bats Global Markets, was originally an alternative trading platform that eventually grew to become the second-largest U.S. equity exchange by market share. A year later, Bats Global Markets was acquired by the Cboe Options Exchange.
Learn More
Trading Skills
Trading Basic EducationTrading OrdersTrading InstrumentsRisk ManagementTrading Psychology
