Personal Finance

Online Brokerage

  • Last Updated:
  • Nov 12th, 2011 10:44 am
[OP]
Newbie
Nov 4, 2011
9 posts
MONTRÉAL

Online Brokerage

Hello, I am interested in trading, so I decided to start slowly. Here is the deal: I am currently a University student and I won't be making a lot of trades (probably less than 20 times per month). I am going to start with $10k of my savings which is an amount I am comfortable losing if it goes wrong. I also want to do it through a tax free savings account.

So here is my question:

Which online brokerage would you guys suggest?? I was thinking of Quest Trade..

They offer low trades commission rates. The only reason why I'm hesitating and not opening an account right away is because I see that they charge a monthly fee for their platforms... I just don't want to end up losing money by paying fees more than I earn from the market.

Or are they all like that and I should be more of an active trader?

Help on this will be very much appreciated!!!
Thanks
20 replies
Newbie
Dec 24, 2010
13 posts
Toronto
You might have a look at RBC Direct Investing. You can setup a practice account and simulate trading. I wouldn't recommend it for actually executing real trades though---it's really expensive.

I'm curious to know why you'll be trading so frequently. What sort of risk/return expectations do you have for your trading account?

If you're trading 15 times per month, at $5/trade, that's about $900 per year, which is 9% of your $10,000 investment. Are you going to be able to beat the market by 9% every year?
Banned
Feb 17, 2007
3190 posts
202 upvotes
tmiles wrote: If you're trading 15 times per month, at $5/trade, that's about $900 per year, which is 9% of your $10,000 investment. Are you going to be able to beat the market by 9% every year?

he might get lucky and make a killing lol. 9% is nothing in comparison.
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Nov 23, 2005
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ACC-Major wrote: he might get lucky and make a killing lol. 9% is nothing in comparison.

But then he might lose it all ;)

There is a guy in US that turned turned his $250k inheritance into $11mil in 3yrs and now has an empty account as he lost it all ;)
[OP]
Newbie
Nov 4, 2011
9 posts
MONTRÉAL
tmiles wrote: You might have a look at RBC Direct Investing. You can setup a practice account and simulate trading. I wouldn't recommend it for actually executing real trades though---it's really expensive.

I'm curious to know why you'll be trading so frequently. What sort of risk/return expectations do you have for your trading account?

If you're trading 15 times per month, at $5/trade, that's about $900 per year, which is 9% of your $10,000 investment. Are you going to be able to beat the market by 9% every year?

Haha, no ofc not. It's just that when I was looking online, all brokerage firms were giving different prices for the number of trades I would be doing (20-, 150+, etc).

It will probably be around 1 or 2 trades per month or even per quarter depending on if I add more money to it.

I've already tried the TDW and the RBC demo... but I am really looking for the cheapest/best option as of right now.

I read a lot about Quest Trade and IB from this forum... any recommendations?


he might get lucky and make a killing lol. 9% is nothing in comparison.
Hopefully.

But then he might lose it all
I will only invest what I am comfortable to lose, although i will try to make my experience as positive as possible ;)
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Dec 11, 2005
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beginm2 wrote: Hello, I am interested in trading, so I decided to start slowly. Here is the deal: I am currently a University student and I won't be making a lot of trades (probably less than 20 times per month). I am going to start with $10k of my savings which is an amount I am comfortable losing if it goes wrong.
Anyone making more than 10 trades / month is a pretty high-frequency trader. Anyone making more than 20 /month better be doing it as their sole job, and be moving around a lot more than 10K to make it worthwhile.

As others have pointed out, even at a bare-bones price of $5 / trade, if you are making 20 trades a month it is going to eat up any gains on 10K unless you are some kind of magic man.

If you are looking to get started with 10K, you should look more in the 2-5 trades / month range, tops. Pick a couple of companies, buy them, wait a few weeks and see where they are. Then either sell and buy something else, or wait, or buy more of one. Don't try to do day-to-day timing.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
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User avatar
Aug 18, 2008
3523 posts
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Ottawa
beginm2 wrote: [Redacted]I was thinking of Quest Trade..

They offer low trades commission rates. The only reason why I'm hesitating and not opening an account right away is because I see that they charge a monthly fee for their platforms... I just don't want to end up losing money by paying fees more than I earn from the market.

Or are they all like that and I should be more of an active trader?

Help on this will be very much appreciated!!!
Thanks

While everyone's giving you good advice, I'll help you out by answering your question :razz:

Questrade does NOT charge for their QuestradeWeb platform, which is the one that you'll be using :)

Just note that if you're a registered account, you WILL be able to hold both CAD & USD separately in there.
If you're on a margin account (basically non-registered), you CAN borrow money from them, so make sure any trades in foreign currency are changed into that currency BEFORE the trade. :)
Newbie
Dec 24, 2010
13 posts
Toronto
beginm2 wrote: Haha, no ofc not. It's just that when I was looking online, all brokerage firms were giving different prices for the number of trades I would be doing (20-, 150+, etc).

It will probably be around 1 or 2 trades per month or even per quarter depending on if I add more money to it.
Okay, that's cool. Questrade is probably your best option for an RSP trading account. I think most other brokers charge a fee if your RSP account is less than $15,000 or so. I don't think IB has an option to open an RSP account, but I could be wrong about that---worth looking into.

A great blog on investing is http://canadiancouchpotato.com/ Tons of great posts if you think a passive portfolio might be right for you.
[OP]
Newbie
Nov 4, 2011
9 posts
MONTRÉAL
brunes wrote: Anyone making more than 10 trades / month is a pretty high-frequency trader. Anyone making more than 20 /month better be doing it as their sole job, and be moving around a lot more than 10K to make it worthwhile.

As others have pointed out, even at a bare-bones price of $5 / trade, if you are making 20 trades a month it is going to eat up any gains on 10K unless you are some kind of magic man.

If you are looking to get started with 10K, you should look more in the 2-5 trades / month range, tops. Pick a couple of companies, buy them, wait a few weeks and see where they are. Then either sell and buy something else, or wait, or buy more of one. Don't try to do day-to-day timing.


I've already answered that
''Haha, no ofc not. It's just that when I was looking online, all brokerage firms were giving different prices for the number of trades I would be doing (20-, 150+, etc).
It will probably be around 1 or 2 trades per month or even per quarter depending on if I add more money to it.''
Less than twenty includes 1 or 2 transactions per month.


While everyone's giving you good advice, I'll help you out by answering your question
AKITAKARA thank you. I don't know if my question wasn't clear enough because I am a french Canadian or what.. but anyways, turns out I won't need to create a seperate thread for tips and tricks :)
Just note that if you're a registered account, you WILL be able to hold both CAD & USD separately in there.
That's very good news. I should of buy us 4-5 months ago when rates were very good.

A great blog on investing is http://canadiancouchpotato.com/ Tons of great posts if you think a passive portfolio might be right for you.
Thank you TMILES as well, will definitely go read see if I can learn a thing or two.
Newbie
User avatar
Nov 8, 2011
57 posts
Is questrade still the cheapest for tsx stocks? I've heard some horror stories about people losing their cash once they've transferred it into their questrade account.

Is there any help/resources in helping newbies on Questrade?

thank
Jr. Member
Oct 19, 2011
102 posts
7 upvotes
RICHMOND
beginm2 wrote: Hello, I am interested in trading, so I decided to start slowly. Here is the deal: I am currently a University student and I won't be making a lot of trades (probably less than 20 times per month). I am going to start with $10k of my savings which is an amount I am comfortable losing if it goes wrong. I also want to do it through a tax free savings account.

So here is my question:

Which online brokerage would you guys suggest?? I was thinking of Quest Trade..

They offer low trades commission rates. The only reason why I'm hesitating and not opening an account right away is because I see that they charge a monthly fee for their platforms... I just don't want to end up losing money by paying fees more than I earn from the market.

Or are they all like that and I should be more of an active trader?

Help on this will be very much appreciated!!!
Thanks

With 10K capital you will get killed by any of the big 5 brokerages
They are extremely safe and easy for a beginner like you and their execution is decent , at least with TDWH , but after all being said , and no matter how good\lucky you might be , the 30$ each way commission will either kill or cripple you

Regarding Questrade , personally , I wouldn't touch them with 10 foot pool , not even with a small 10K capital like your
I don't how good or bad their platforms are or their execution or their service , but according to their website they are using a company called Penson Financial Services as their carrying broker , and this is how great Penson are doing right now - http://www.google.ca/finance?client=ob&q=NASDAQ:PNSN
Newbie
User avatar
Nov 8, 2011
57 posts
MarcoMar1 wrote: With 10K capital you will get killed by any of the big 5 brokerages
They are extremely safe and easy for a beginner like you and their execution is decent , at least with TDWH , but after all being said , and no matter how good\lucky you might be , the 30$ each way commission will either kill or cripple you

Regarding Questrade , personally , I wouldn't touch them with 10 foot pool , not even with a small 10K capital like your
I don't how good or bad their platforms are or their execution or their service , but according to their website they are using a company called Penson Financial Services as their carrying broker , and this is how great Penson are doing right now - http://www.google.ca/finance?client=ob&q=NASDAQ:PNSN

If not Questrade, then which online brokerage do you recommend?
Jr. Member
Oct 19, 2011
102 posts
7 upvotes
RICHMOND
jamesmd wrote: If not Questrade, then which online brokerage do you recommend?

There is no much to recommend , there is no much competition , choose whichever one that is the most convenient to you , depending on where you are currently banking and how much money you are going to deposit

If you bank with TD , go with TD WH
If you bank with BMO , go with BMO IL
If you bank with CIBC , go with CIBC IE
Deal Fanatic
Feb 17, 2007
6074 posts
2314 upvotes
Mort Réal
Virtual Brokers just launched their 99 cent (yes, that's a dollar!) commission structure!
1¢/share > 1,00$ minimum 99 cents, max 9,99$ and NO ECN fees.

They have also just launched their free web-based tool that offers free level II quotes etc...

Been real happy with their service so far. Was with them under the previous 5$/ticket commissions (also max 10$).
I'd look it up in your case.
Banned
Feb 17, 2007
3190 posts
202 upvotes
WHO wrote: Virtual Brokers just launched their 99 cent (yes, that's a dollar!) commission structure!
1¢/share > 1,00$ minimum 99 cents, max 9,99$ and NO ECN fees.

They have also just launched their free web-based tool that offers free level II quotes etc...

Been real happy with their service so far. Was with them under the previous 5$/ticket commissions (also max 10$).
I'd look it up in your case.

They still have the $10/month account fee?
Deal Addict
Aug 21, 2009
1330 posts
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With $10k in Canada, Questrade is the only place worthwhile for registered or IB for non-reg. Technically IB only wants experienced traders as they don't want to deal with the newb complaints that Questrade gets, but you could probably fudge the application questions. IB won't do TFSA or RRSP though..

Don't waste your RRSP room as a student.... either open a TFSA with Questrade or non-reg with IB (min $10k to open, min $10/month) Most of the RFD horror stories about Questrade are due to all the newbs using Questrade and they don't read or think before doing things. There are some legitimate complaints, but RFD effect has blown it way out of proportion (like any forum)

As AKITAKARA already warned you, a common Questrade newb mistake is to buy NYSE stocks on margin when you meant to buy CAD. This can be avoided by simply making sure you have the proper currency and by hitting "quote" to make sure you have the correct stock. Also don't freak out when Questrade balances are messed up after hours or after a split. Those few account for the majority of complaints. Just make sure you know what you're doing before hitting buy
Jr. Member
Nov 17, 2010
155 posts
32 upvotes
boyoflondon wrote: But then he might lose it all ;)

There is a guy in US that turned turned his $250k inheritance into $11mil in 3yrs and now has an empty account as he lost it all ;)

url or it didnt happens
Newbie
Apr 24, 2006
93 posts
I have been using Questrade for about a month now and haven't had any issues. Made about 8-12 trades, $50 of comissions were covered by the recruitment bonus which was nice. It took some understanding of placement of trades, closing of trades and how trailing stop-losses work, but I feel I am fairly set now. Read many times before that the greatest obstacle to profiting in the markets is controlling your comission costs. With Questrade, most trades will likely cost you $4.95 (each when you buy and when you sell) unless you are purchasing a high quantity of shares; so its good to remember that if you don't anticipate at least a $10 return, you are wasting your money. Their web platform isn't too bad, I use freestockcharts.com for technical research and a combination of sites for fundamental research, primarily their platform.

Research is your friend, and knowing all of what you are getting into is ideal.. but some things are difficult to understand until you do them yourself. If you have any further questions about Questrade, I can try and answer them.
Deal Fanatic
Feb 17, 2007
6074 posts
2314 upvotes
Mort Réal
ACC-Major wrote: They still have the $10/month account fee?

What fee are you referring to? Can you elaborate, please?
I've never heard of or been charged any monthly fee with VB.

I know of 2 fees : 50$/year for a US RSP account and 1$/month for DRIP.
There would also be fees for advanced trading tools/platforms I guess.
Deal Addict
May 16, 2006
4240 posts
515 upvotes
OP,

Contact Thinkorswim.ca. Downside is they have only access to the NYSE/US exchanges right now. You get a real desktop platform, commissions are cheap (I'm at $7/trade) and the execution speed is extremely quick. I remember with CIBC I would constantly be refreshing, etc.

I have no exp. with quest trade, but I recommend TOS account from my own personal exp.

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