Table of Contents
Introduction
Interactive Brokers is one of the biggest online brokerage firms that provide the client with access to the global financial markets and products. This has made it popular among individual and institutional investors due to the advanced trading platform and competitive fees that it offers. But as you are about to find out, when you are venturing into the market with Interactive Brokers, there are a few tips that you need to consider so as to ensure that you have the best trading experience.
1. Get to Know the Platform
It is important to gain some knowledge of the platform before you start your trading with Interactive Brokers. The company has come up with the Trader Workstation (TWS) as the primary trading interface that is equipped with various features and tools that are useful in the analysis of the market and executing the trades properly.
It is advisable to spend some time getting to know the different sections of the platform such as the market data, order entry and account management. Learn how to customize the layout and create watchlists of stocks or other assets that interest you. With this knowledge, you will be in a position to navigate through the platform easily and make the right trading decisions.
2. Use the Research Tools
To this end, Interactive Brokers provides its clients with a number of tools that can help to analyze the market. The tools comprise real-time market data, news, fundamental analysis, and technical analysis tools.
You will be in a position to monitor the price changes and trends in the market with real time market data. News feeds display relevant articles and information from reputable sources in order to assist you in making the right trading decisions. The fundamental analysis tools assist in the assessment of the financial statements of a company while the technical analysis tools assist in identifying the possible entry and exit levels in the market based on price action.
The use of these research tools will increase your level of market knowledge and assist you in making the right trading decisions.
3. Learn from the Education Section
This brokerage also provides its clients with a wealth of information that can help them become better traders. These resources include webinars, video tutorials, articles, and interactive courses.
Interactive webinars, that are the live online seminars provided by industry experts, cover areas such as trading strategies, market analysis, and risk management. The video tutorials explain in detail how to use various features of the trading platform step by step. Articles explore a certain concept or a particular trend in the market and courses are self-paced, allowing you to learn at your own pace.
It is possible to enhance your trading skills and stay current with the market trends by using these educational resources.
4. Trade in the Demo Account
If you are new to the trading world or would like to fine tune your strategies without using real money then Interactive Brokers has a paper trading facility. Paper trading allows you to make actual trades with virtual money in real market conditions.
The process of trading in the practice account enables you to learn and test different strategies in real time with real market conditions. This will help you to develop your confidence and your skills and also allow you to fine tune your approach before investing real money.
5. Minimize Your Trading Expenses
Although Interactive Brokers is one of the most cheap brokerages, it is crucial to seek to reduce the costs that are associated with trading so as to increase the returns. Here are a few tips to help you reduce expenses:
- Choose the right pricing plan: Interactive Brokers also has a fixed rate and tiered plan as its pricing structure. Based on the frequency of your trading, you need to determine which of the two plans will suit you best.
- Take advantage of volume discounts: If you are a high frequency trader, then you stand to gain from lower commission rates that are available through volume discounts offered by Interactive Brokers.
- Consider using smart routing: The smart routing technology of Interactive Brokers is able to identify the best available prices across different markets which may save you money.
- Be mindful of additional fees: Although Interactive Brokers has favorable fees, there may be other charges that are associated with certain features or market information. It is important to know such fees in order to avoid paying for something extra.
Conclusion
It is possible to make a right decision in the market with the help of Interactive Brokers if you know what to do. By taking the time to get to know the platform, using the available research tools, taking advantage of education material, practicing with demo trading, and cutting down on the costs you can increase your chances of success significantly.
As with any form of trading there is always an element of risk involved and it is imperative that research is carried out and professional advice sought before any decision is made to invest. With the right strategy and a good understanding of the market, Interactive Brokers can be a great tool in the attainment of one’s financial goals.
