Trading stocks is a great way to earn extra money from anywhere in the world. Thanks to the advancement of technology, it has never been easier to track your investments and make quick decisions, even without a broker. Keep reading to learn more about the advantages of trading without a broker, how to do it, and some of the apps that can help you along the way.
Benefits of Trading Without a Stockbroker
When you’re first starting to trade in the stock market, a stockbroker can be a wonderful resource and guide as you familiarize yourself with the process. Thanks to the advancement of technology, many seasoned traders are deciding to be their own stockbroker. Some of the advantages of forgoing a broker include:
- Lowers each trade’s transaction costs. When you trade online without a broker, you no longer have to pay the often substantial stockbroker commission, making your transaction costs much lower so that you can use those funds for your next adventure.
- Gives you direct access to the markets. Through online access, you can get a much better idea of market changes, trailing stops, and contingent orders.
- Allows you to respond to changes more quickly. Because you don’t have to wait to get in touch with your broker, you can react to developments in the news or market much faster. This is especially useful if you’re working in different timezones.
- Develops your investment skills. When you invest on your own, it gives you the chance to learn more about trading and deepen your knowledge of the markets. Additionally, online trading necessitates that you watch the market more closely, which allows you to learn the best timing strategies firsthand.
How to Trade Without a Broker
To start trading on your own without a broker, you’ll need to:
- Decide on a broker-free plan. When working without a broker, you have to determine a plan to invest in. The two most popular options are Direct Stock Purchase Plans or Dividend Reinvestment Plans.
- Research companies before you decide to invest in them. Regardless of the plan you go with, you should spend some time researching which stocks you can invest in confidently. Look at the stock’s growth history, the trends that drive value increases, and the future of the market and industry.
- Keep your account funded. For Direct Stock Purchase Plan (DSPP) accounts, you pay your deposits through a checking account. When investing in a Dividend Reinvestment Plan (DRIP), you have to create a specific DRIP account through a financial institution. Whichever plan you have, you just need to ensure that you keep up an account balance that can cover your monthly deposit.
- Purchase stocks. Once you have done your research and determined which stocks look promising, it’s time to start buying. The process differs slightly depending on the broker-free investment plan you opt for.
Best Apps and Mobile Sites for Trading
Image via Flickr by SimpleFX
You can use one of these apps to navigate the markets and trades on your own, from an airport or an Italian cafe:
- Ally
- tastyworks
- SoFi
- Webull
- Fidelity
- TD Ameritrade
Make sure that you evaluate the advantages and challenges associated with trading without a broker before you get started. The rewards can be great, but the process does take a bit more of your attention.
