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Best Stock Brokers 2021 – A Comparison

The progressive development of trading on the Internet opens the possibility for interested investors to trade their shares online. In addition to the individual trading of securities within seconds, the shareholder manages his stock portfolio independently. However, this short route to the exclusion of a principal bank, combined with the general peculiarities of stock trading, entails increased risks.

Certain requirements must be met in order to be able to successfully manage one’s securities account: Of course, Internet access and the appropriate software and hardware are the basic technical requirements. In addition, a great deal of background knowledge must be available in order to be able to successfully manage one’s securities account oneself without the house bank.

Best stock brokers for beginners?

Consequently, independent stock trading without the advisor of the house bank is not stock trading for beginners. With the necessary background knowledge, however, one learns how to manage one’s securities account and the stock trading is carried out most effectively to the best of one’s knowledge. It is important to find an experienced online broker. The costs are the first criterion for selection. Both the individual transaction costs as well as the depot administration are to be calculated.

  • In most cases, a fixed monthly fee is agreed upon, to which the proportional trade costs are added, depending on the investment volume.
  • High trade costs impair flexibility: even in the negative, positions are held for a long time in an unjustified hope for improvement.
  • Low costs, on the other hand, make one flexible, and it is much easier to part with investments.
  • Accordingly, if there are relatively few monthly transactions, it is advisable to use an online broker that charges low fixed costs and higher transaction costs.
  • Those who trade stocks online on a daily basis choose a broker with high fixed fees and low transaction costs.
  • Many online brokers specialize in certain market segments. Otherwise, its qualities are presented in the usability of the depot and online support.

Trading in stocks is risky, the more so the individual online trading. All decisions are made by the investor himself. This requires a sound basic knowledge. All influencing factors, developments and trends must be carefully analyzed in order to be able to build up his capital steadily through solid stock trading online.

Compare portfolios and open online

It pays off for the prospective customer to open a share depot online. Unlike the house bank, there are no branches with employees to pay, which translates into lower costs. Which online broker the prospective customer chooses to open a securities account, he should consider carefully.

After all, the transfer to a new securities account requires a lot of time. Here are some tips for opening a share deposit account: It is important to consider the applicable custody account fees and incidental costs. The profit achieved should not be too much reduced by them. It is impossible to open a completely free securities account. However, some providers waive the basic fee and require only transaction costs for share purchases.

There are three basic models in terms of fees for a share deposit:

  1. the flat rate (the fees here are not dependent on the order size),
  2. staggered transaction costs (the fees increase with the order size),
  3. percentage transaction costs (the fees result from a fixed percentage of the order size).

Regarding the usability and service: it may be that despite low transaction costs, the investor has to deal with a difficult operation of the website every time he buys shares. Therefore, the prospective customer should open a sample securities account or take a closer look at the website before selecting the securities account.

Other tips when opening an account

Shares, certificates, warrants, funds – some online brokers do not allow the purchase of all types of securities with their own share deposit. For this reason, the investor should consider beforehand with which securities he wants to trade and note changes regarding his trading behavior. Regarding interest on credit balances: Normally, a considerable part of the credit balance is available in the account for future share purchases. Therefore, it is good for the account holder to know that he can earn interest on this money. Interest on credit balances is frequently adjusted and is usually staggered according to the amount of the credit balance. The investor should agree on the amount of interest exactly when opening the share deposit.

Open a share deposit account online – how it works

So that the investor can open a share depot online, he can fill out the opening application immediately online after selecting the provider. Data such as name, date of birth, address and place of birth are requested. Information on marital status, type of employment and industry is requested. Previous experience in securities trading must be indicated. On the basis of a risk profile drawn up thereafter, the bank makes the decision as to which securities transactions the investor is allowed to carry out. A current account must be specified as a clearing account through which all payments related to the securities transactions will be made (see Current Account Test). After providing all the data, the investor should print out the application when opening a share deposit account. It is also necessary to establish identity at a post office. The Post-Ident-Coupon (which is made available by the securities account provider), the signed and complete application to open an account, the identity card and the envelope for a reply must be brought to the post office. At the post office, the signature is verified and confirmed and the documents are sent to the bank. A few days later, the owner of the share deposit account receives a letter from the bank with the deposit account number and the password for the login. For security reasons, the password can then be changed immediately.

Most people want to invest their money wisely. If you also want to invest in shares, you must first open a securities account. In principle, anyone can purchase shares, although shares cannot be purchased directly on the stock exchange. To do this, you need a broker who handles the buy and sell orders for customers. Customers must first open a securities account with the broker, through which the share transactions are processed. The securities account can be opened with a broker, but also with a bank.

The right broker for the share deposit

However, there are major differences in terms of costs. Brokers earn their money through the order costs, where a certain amount is due for a purchase or sale. In most cases, the broker charges a minimum amount plus a commission based on the value of the stock. There may be further differences if the stock purchases are made domestically or internationally.
Broker selection

Who is looking for the right broker, should make a provider comparison. In doing so, one can pay attention to the conditions, which consist of the custody account fees and the transaction costs. A custody account comparison should be the first priority. Most online brokers do not charge an annual fee. Of importance, however, is the order fee, which should be as low as possible if you intend to trade many shares online.

Open a share deposit account

Opening a securities account is quite simple via the broker’s Internet platform. After entering all the necessary data, the documents for identification by the post office (Postidentverfahren) must be printed out. These are taken to the post office branch, where passport or ID card is then presented to carry out the identification. The documents are sent from there to the bank.

Start of stock trading

Once one has registered with a broker, the first online purchase of shares can be made. Before starting to trade, one should have a strategy to invest in stocks. Shares are not suitable as a long-term investment and certainly not for retirement. It is also important to know that stock trading involves risks. Although total losses are rare, it is still possible to lose ten or twenty percent of the share price within a few days if the share price develops unfavorably.

Setting an investment target

Investors should know how much capital is available for a stock investment, what risk they want to take and what return they expect from an investment in stocks. The choice of stock investment depends on these factors. For example, if one wants to invest in growth industries, this can be extremely lucrative and associated with a high return. On the other hand, however, there is also a higher risk of loss.

Spreading the portfolio in the stock portfolio

  • Investors who focus on shares over the longer term should invest in the larger stocks in the indices.
  • These are relatively safe, but suggest a lower return.
  • It is therefore advisable to structure the online portfolio broadly and not to make it unilaterally dependent on specific companies or sectors.
  • Possible losses can be compensated by other values.

Acquire stock market knowledge before you open a share depot

aktiendepot aufmachenBefore you start trading shares online, you should acquire basic stock market knowledge. This includes technical terms that deal with the stock market. In addition, there is knowledge about the basic functioning of stock trading on the stock exchange. Newcomers in particular should not follow the “insider tips” offered in many newsletters on the subject of the stock market. Beginners often succumb to the temptations and tips of so-called experts and trade with the shares recommended there.

Gathering information

Investors should first gather information about the company in which they might want to invest. Sources are, in addition to the company’s website, news on business or stock exchange sites. Often there are also ad hoc announcements or press releases from companies that publish news about the company’s development.

No share purchase without a limit

Investors who do not choose one of the major stocks, such as one of the 30 DAX stocks, should never trade without a limit. If a buy request is given to the stock exchange with the limit “cheapest”, the order will be placed at the current price. It can happen that a share has already fallen again after a few minutes. Those who trade with limits are protected from strong price fluctuations. Another stock market wisdom says that shares should not be bought when prices are falling. It is more promising to follow a trend and invest in shares whose prices have risen in the recent past.

Investing small amounts in the stock portfolio

Investors should be careful when trading online and not invest too much money. At the same time, care should be taken not to invest too little capital in a stock either, otherwise the fees will be disproportionately high. As a result, significantly higher returns must be generated initially to at least offset the fees.

The selection process

Once the investor has gathered enough information, developed a strategy and now made an investment decision, he can buy the securities. To do this, he tells his bank or securities broker which and how many shares he wants to buy and at what price. Before one decides for a share purchase, the real time courses should be studied at different stock exchanges before. Brokers usually offer the possibility to buy shares online. As a rule, the Internet platform has the appropriate buttons with which the purchase of shares can be carried out online. Investors usually use a TAN number previously sent by the bank or broker to execute a buy order.

Stop Buy Rate

The purchase can be provided with a stop-buy price, at which the system automatically buys the stock at the selected exchange. The order is then displayed in the order book. After the purchase has been made, it is confirmed and the position appears in the securities account.

Watch shares and only then buy

Investors should keep an eye on their securities account and review it from time to time. In addition, they should keep themselves informed about developments on the securities market.

Realization of profits

If one has observed individual share values of its depot over a period, one should realize profits by the sales of the securities, if the shares rose. In this way, one achieves a price gain. In addition to price gains, shareholders can also profit from the respective company in other ways. If the stock corporation has generated a profit, it usually distributes a dividend. For the investor, the amount of the dividend depends on the number of shares held.

Containing losses in the share portfolio

Trading in stocks also involves divesting oneself of unprofitable investments if they have not generated the hoped-for return. Selling shares works in the same way as buying them. The important thing is to determine whether the shares should be sold at the current price or whether the sale should only take place when the price falls below a pre-determined level.

How does stock trading work?

Stock investors profit from the dividends of longer-term invested stocks and from their price gains. Price changes generate the targeted purchase and sale of shares.Any form of purchase or sale of shares is called stock trading. Accordingly, it includes both organized purchases and sales on stock exchanges and trading by private individuals. Stock exchange trading is regulated by provisions that are geared to the segments in which the individual securities are listed. If private individuals trade in shares, they earn money on the one hand from the dividends of the shares or on the other hand by speculating on price changes.

Who can open a share deposit account?

Private investors can use professional brokers for this purpose. In addition to trading on behalf of customers, brokers offer complementary advice, especially in stock trading for beginners. Shares are managed in bank custody accounts. With appropriate expertise, investors can trade their shares independently without the bank managing the securities account.

Tips for trading with the depot

The world of shares fascinates more and more investors. Those who avoid some basic mistakes and do their “homework” can already be among the winners. Following are some stock tips on how to make profits and avoid losses.

Basic knowledge and investment horizon

Before investing in stocks, you should of course be familiar with the basic concepts of the stock market. Information on important terms such as DAX, blue chips, penny stocks, dividends and price-earnings ratios can be obtained quickly on the Internet, for example. Only those who understand the interrelationships on the stock market can win properly in the end. The matter requires a serious approach from the investor, on so-called “hot share tips” should be trusted in the fewest cases.

Who invests in shares, should have besides an investment horizon of at least 5 to 10 years. In this time the money may not be needed naturally for other purposes. From an investor should be invested thus also really only then money at the stock market that he has also for it left. In addition, a minimum capital of about 1,500 EUR should be available because of the fees incurred. In euphoria phases, the investment can be partially reduced and reallocated to very safe investments.

The first steps with the share depot

Since the savings account interest rates are more than measly, trading in stocks is becoming popular again among investors. The first steps in stock market trading should be well thought out, one should follow some stock tips. Prerequisite for the share trade is the opening of a depot. There is from the cost side massively different. The direct banks advertise with good fee models and displace visibly savings banks and existing branch banks. There are share deposits without annual fee. Transaction costs are also lower for online providers. Furthermore, direct banks offer free sample portfolios that replicate analysts’ strategies.

Among the essential stock tips is to follow international news and political decision and to deal with various issues. Various news can lead to a drop in prices and are important for decisions to buy or sell shares. Before trading stocks, it is also advisable to purchase equity funds to get acquainted with the stock market once.

Define investment goal

If one decides however to the acquisition of shares, it belongs to the share Tipps to define an investment goal. For this the investor must be clear about the following points: What amount is available to the investor for investment? How much risk is the investor willing to take? What return does the investor want to achieve on the securities market by investing in stocks? Answering all these questions leads to the choice of a particular stock investment. Investing in growth sectors can be very promising in terms of profit and allow high returns, but the risk of loss is also correspondingly high. One of the most important stock tips is to diversify one’s stock portfolio and not to become too dependent on individual industries or companies. Thus, the risk of loss is also lower. About the investment decision: To make an investment decision, you need to gather information about the company in which you want to invest, if it is to be a single. Stock tips are buy or sell recommendations from well-known stock market analysts, publishes various ratings on various listed companies on a daily basis.

Acquisition of shares

If the potential investor has already made an investment decision and has chosen shares, e.g. of a certain company, the securities must be purchased. For this purpose, the bank or broker is informed about the type and number of shares. It is essential whether the shares are to be acquired at the current price immediately or whether a certain price is to be fixed, starting from which the investor wants to buy the security. One of the stock tips is to check the portfolio again and again. One should also know that with the acquisition of shares one becomes a part owner of a certain enterprise. The shareholder benefits through price gains and also in other ways. Because if the company makes a profit, dividends are paid out.

Risk and price drops

If you do not want to take the risk of investing in individual shares, you can instead bet on the performance of the entire market. For this purpose there are the so-called index certificates. The development of individual stocks is relatively uncertain, whereas for the market as a whole, certain trends are often easier to recognize. If the entire market should collapse because of a large selling panic, a cool head is to be kept absolutely! Sit out and rather buy is here one of the best stock tips that can be given – in no case go with the herd and also sell. Violent price corrections will always occur in the world of stocks, there is nothing really wrong with that. On the contrary, the long-term investor sees these as a healthy purge for the stock market.

Setting limits and value investing

It is advisable to set a limit both when buying and selling shares. This provides protection from unpleasant surprises. However, the limits should not be set too close to the current stock market price, so that the respective order actually comes to fruition.

There are many stock tips, but there should always be a plan for investing in stocks. Here applies as in many other areas also: Better a bad plan than none at all! A very nice conservative and for beginners suitable investment method is the Value Investing after the great Warren Buffet. The latter always first takes his time to get an exact picture of the company, tries to understand its business model and assess its future prospects. If the company has a good management and on top of that is undervalued (i.e. the market capitalization is lower than the actual value), the time has come to strike.

Selling shares again in time

Since the goal of an equity investment is to generate profits over the long term, it is also essential to say goodbye to non- or low-yielding investment objects again if they do not meet the investor’s return expectations. Selling shares works on similar principles as buying them. The investor tells his bank or broker which or how many share certificates he wants to say goodbye to. One of the essential stock tips is to note that it is necessary to determine whether the shares are to be sold immediately at the current price or whether it is necessary to wait for the best price or whether the securities are to be sold only once they have fallen below a price level fixed in advance.

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Risk Warning

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trading with financial products (CFDs, Forex, Stocks, Cryptocurrencies, etc.) in general and with leveraged products especially is highly speculative and not suitable for all investors! The loss of your entire investment is possible. Never invest money you can`t risk losing! Decentralized and not regulated cryptocurrency markets are also a high risk and may lead to a significant loss.


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