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The 5 Best Online Brokers of 2014

Using Barrons' Top Brokers List to Your Advantage

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Ever since the late 90's the brokerage industry has been in a commoditization trend, making it harder and harder to distinguish between the benefits of individual online brokers.

Fortunately Barron's does a comprehensive study each year to determine the best online brokers for retail traders and investors.  Below are the top five from this year's list and some info on how to use this list to your advantage. 

1. Interactive Brokers

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Long considered a broker only for those with previous experience in the markets, IB has spent a lot of time over the last few years becoming more user friendly.  The combination of tools, asset classes, and low cost executions they offer puts them in the number one spot this year.

Interactive Brokers' commission structure is flexible and can be tailored to accommodate your trading frequency and asset class.

2. TradeMonster

TradeMonster didn't even exist back in the 90's when online trading began, but that hasn't stopped them from rising to the top of this year's list.  An emphasis on cross-device consistency in their trading platform and a deep dive into options analytics has helped them to grow their customer base and capture market share.

TradeMonster charges $4.95 per stock trade and uses a sliding scale for options trades.

3. Place Trade

Place Trade is an interesting addition to this list because they are a brokerage that is built on the Interactive Brokers platform.  They charge more than IB but offer more whistles and bells for the retail trader and investor.  You also have the ability to bring a financial advisor into your decision making process for a slightly higher commission fee.

Place Trade charges $0.01 per share for stock trades with a minimum ticket charge of $1.50.

4. TD Ameritrade

The strong point for TD Ameritrade how much investor education it provides on its site for free. There are an endless amount of "online courses" you can take to help you become a better investor.  In addition, their Think or Swim "brokerage within a brokerage" has some of the best tools for options traders.

TD Ameritrade charges a $9.99 flat fee for all internet based stock trades.

5. TradeStation

Long thought of as primarily a strategy software, TradeStation has spent a lot of time beefing up the offerings of their brokerage.  The integration of these two components makes them the perfect choice for customers who like to test out their market theories and then seamlessly execute them.

TradeStation charges $0.01 per share up to 500 shares and then then $0.006 per share thereafter.

Their Competition Is Your Advantage

There has never been a better time for the retail trader or investor to be in the market for an online broker. Hundreds of millions of dollars are spent each year by the major firms to try and fight over the same fixed pool of potential customers, and you can use this to your advantage when choosing a broker. You will not find much differentiation between brokers in terms of execution or speed anymore. And most broker platforms offer all the analytic tools -- from stock screeners to charting -- that you would ever need, so instead look for the broker that gives you the most "bang for the buck." Don't be afraid to ask a broker for concessions in order to open an account with them. This can range from free trades, to cash bonuses, or specialized customer services. Some brokerages are even known to offer new customers with certain minimum balances such freebies as smart phones or tablets. Photo Credit: Steve Rabin/E+/Getty Images

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