Compare top online share trading platforms
Are you wanting to find out more about share trading online? Or perhaps you’re wanting to know which online broking service in Australia offers the best deal? Before you start it’s important to find out what share trading is all about, and what services online brokers offer you.
Savvy can answer your questions and help you find the best online broker for your share trading. By comparing some of Australia’s leading platforms, you can find out the fees charged and the markets on offer before deciding which provider fits in best with your trading plan. Start your share trading journey here today with Savvy!
|Tiger Brokers Share Trading|
With a motto of ‘Ready! Pounce!,’ Tiger Brokers is an online broking service that Millennials and Gen Zs naturally gravitate to, offering novices zero brokerage fees for the first three months*More details
|eToro Share Trading|
More than 13 million registered users enjoy the multi-asset broking services offered by eToro to customers in more than 140 countries across the globe.More details
|IG Share Trading|
IG is one of Australia’s largest CFD providers with over 320,000 active trading customers world-wide. It’s award-winning trading platform and low commission rates make it Australia’s #1 online CFD broker.More details
Disclaimer: Savvy is not advising or recommending any particular product to you. We provide general information on products for the purposes of comparison, but your personal situation or goals are not considered here. Although we try to make our comparisons as thorough as possible, we do not have information on all products on the market on our site.
You should always consult a given offer’s PDS or further documentation in the process of deciding on which share trading platform to choose, as well as seeking independent, professional advice. If you decide to apply with one of the platforms listed above via our website, you will not be dealing with Savvy; any applications or enquiries will be conducted directly with the platform offering that product.
Share trading platforms
What is online share trading?
Online share trading involves using a computer program, known as a trading platform, to buy and sell company shares, with the aim of making money. It can be an exciting and profitable part-time occupation, and millions of Australians now have online share trading accounts.
Online trading brokers have replaced traditional stock brokers, who received buy and sell orders from clients by phone in the days before computers. You can now buy and sell shares (called executing trades) directly yourself, by using an online trading platform.
Today’s online stock brokers provide trading platforms which help to make trading far simpler and more accessible. They offer lots of training and help online to make trading as simple as possible for average Aussies.
With just a little bit of research and practice, you could soon be on your way to a profitable new money-making venture trading shares. Compare online brokers, choose the one which is the best fit for the type of trading you wish to try, and then sign up for a trading account today here through Savvy.
What does share trading involve, and how do I get started?
The steps you’ll need to take to start share trading are as follows:
Open a trading account
First, you’ll need to open a trading account with an online stock broker or trading company. Opening a share trading account is similar to opening a bank account. The information required to open a trading account will include:
- Your name and address
- Your phone number and email address
- At least two forms of ID, including your passport and drivers’ licence
- Details of a bank account to link to your trading account
You may be asked to provide further details to enable the broker to carry out a credit check on you before opening your account.
Savvy can help you find a broker which offers the products, prices and information you need to start trading successfully. Compare brokers with Savvy till you find one which fits the type of trading you wish to undertake.
Deposit funds into your trading account
Once your trading account has been established, you’ll need to fund it from your regular bank account or savings account. Transfer money to your share trading account online, in the same way you would normally make an online payment. Your broker will give you the BSB and account number or a BPAY code to make this transfer. You will use this trading money to buy and sell shares. Money transferred to your trading account may take a couple of days to arrive, so be patient and wait till your trading account shows the money you’ve deposited has been received.
Get familiar with your trading platform
Once you have a trading account set up and funded, you’ll be given access to your broker’s trading platform. You’ll either download the program, or log into it if it’s a cloud-based platform. If offered, always use two-step verification to keep your trading account details safe, and never leave your trading platform open unattended on your computer. Treat it the same way you do your regular banking program, and change your passwords regularly to prevent unauthorised access.
Use a demo account to practice your strategy
It’s a great idea to learn how to use the trading platform using a demo account, which most brokers offer free to novice traders. Use your demo account to practice opening and closing trades, to test your trading strategy, and to get familiar with the different types of orders on offer. Your trading strategy should include details of how you are going to choose which shares to trade, your entry and exit signals, and your risk management plan to maximise profits and minimise loss.
Start trading – carefully
Trading involves buying a specific number of shares belonging to one company, and then selling them again later with the hope of making a profit from share price increases. Your trading platform will have ‘buy’ and ‘sell’ tabs, and then boxes in which to enter such details as:
- which company’s shares you wish to trade
- how many shares you want to buy
- the price you are prepared to pay for those shares
- the type of order you will use to buy those shares (for example, buy now, or buy when the share price hits $ xx.xx)
Gain experience as a trader and watch your account grow
If you make a successful trade, you’ll make a profit and your trading account will grow. It is important to start trading slowly, with the purchase of just a handful of shares, until you gain experience and knowledge. Don’t be in a hurry to make money quickly, just trade according to your strategy and learn the trading business gradually without taking on too much risk.
How do I choose an online stock broker?
The trading platform and broker which is best for you will depend on the type and style of trading you wish to undertake. It will also depend on the hours and time you have available to trade.
Types of online brokers
- Bank trading platforms
Most of Australia’s major banks (such as the Commonwealth Bank, Westpac and ANZ, for example) have their own trading platforms. You can open a trading account with your preferred bank, and you’ll be given access to their trading platform. These tend to be quite basic trading platforms, with limited charting options and basic trading functions which allow you to buy and sell standard shares on a limited range of stock markets.
- Online trading brokers
Online brokers tend to offer a wider range of products to trade, and allow access to markets all over the world. You can choose to trade markets in Australia, the US, Asia or Europe. They also tend to offer more complex and advanced trading opportunities, such as trading CFDs, forex, commodities, options, futures, EFTs and cryptocurrencies.
In addition to offering a trading platform to execute your trades, online brokers and trading companies tend to offer lots of extras including:
- trading education, including ‘how to start trading’ clips and videos
- detailed tips, mentoring and stock picking advice
- sophisticated charting functions, to help you choose the best stocks to trade
- social trading networks, where you can chat to other traders
- newsletters, blogs and news alerts
These are some of the other comparison points to consider when choosing an online broker:
- Investment options – do you want to trade just Australian shares, or on international markets? Are you looking for more complex financial products, such as forex currency trading or CFDs? You’ll need a broker who offers the type of trading you want to get into.
- Trading fees – these can either be a set price per trade (ranging from $5 – $10), or a commission-based fee, which is a percentage based on the value of your trade. There may also be monthly fees charged and foreign exchange fees if you choose to trade on an overseas market in a foreign currency
- Minimum trade account balance – this is the minimum amount you need in your trading account in order to start trading. This varies from $1 up to $5,000 or more
- Minimum order requirements – check the smallest value trade you’re able to make. Some brokers have no minimum order, others may start at $50 or more
- Charting tools – these are vital to all traders, as charts are used to determine which direction a share price is going, and entry and exit points for trades. The more charting tools the better!
- Customer support – compare what customer support options are offered, including a helpline, manual trading orders by phone (in case of an emergency, such as a power cut or network outage) or personalised assistance to execute your first trades
- A trading community – does the broker offer a chat hub, community or online social club where you can meet and chat to other traders?
- Special offers to new traders – these can include free trades, reduced fees or even bonus frequent flyer points awarded for all trades undertaken
How can I make money investing in shares?
There are various different ways to make money trading shares. Different methods of trading are called trading strategies. Which strategy you choose will depend on:
- the type of person you are (risk adverse or adventurous)
- the time you have to spend trading
- how much risk you’re prepared to take on
- how much money you have to invest in shares
- your target rate of return
Long term ‘set and forget’ investing
This usually involves:
- Buying only blue-chip stocks, and holding on to them for a long period of time (often years), benefitting from their natural price increase over time
- In addition, long-term investors make a profit each year when dividends are paid out by the company they’ve invested in
- Set and forget investors tend to only own a small portfolio of shares, and they often increase their holdings over time as they can afford to buy more shares
- This long-term investment strategy is often part of a larger wealth creation plan, which may also involve negative gearing property, investing in superannuation and planning long-term for a successful retirement
Active share trading
This is the most common type of online share trading by average Australians. It involves:
- Actively buying and selling shares on a regular basis
- Traders buy and sell small parcels of shares with the aim of making money from share price increases
- The shares are owned for just a few days or weeks until a decent profit is made, and then the shares are sold
- Dividend payouts are not such a major priority for active traders, although if a dividend is received it’s considered a bonus (as the main aim is to make a profit on the share price increase)
- Active traders tend to target more volatile stocks (which may not be in the ASX top 50 list), as they are looking for shares which fluctuate in price to take advantage of more rapid price movement
Day trading is undertaken by traders who may have started trading as a hobby, but now trade shares full-time or on a daily basis. They tend to be experienced traders who frequently opt to trade more complex financial products such as CFDs (Contracts for Difference), forex, commodities, options or futures contracts. Their trading strategy often involves:
- Buying and selling large volumes of shares on a minute-by-minute or daily basis, taking advantage of small hourly price fluctuations
- Day traders frequently don’t hold their positions open overnight, so all trades are closed by the end of the day
- Dividend payouts are not a consideration for day traders (although they avoid buying shares on or just after the dividend payout date, to avoid the predictable share price drop after dividends are paid)
- This type of trading strategy is a very high-risk, high-reward method of trading for advanced traders, that may involve buying and selling the same shares multiple times in one day
Which markets can I trade in Australia?
Today’s online brokers allow you to access different stock markets internationally. Because of the time differences around the world, it’s possible to trade 24/6 by taking advantage of different time zones when particular markets are open.
If you wish to trade Australian shares, you will trade through the ASX, which is the Australian Securities Exchange (more commonly known as the Australian stock market.) If you choose Australian shares, you’ll have over 2,300 companies to choose from to trade. The ASX opens at 10am and closes at 4pm AEST.
Some other popular stock markets you may choose to trade are:
- The New York Stock Exchange (NYSE), the world’s largest stock market which has over 2,500 American companies to trade
- The NASDAQ, which is also located in New York, and comprises mainly high-value technology stocks such as Apple, Microsoft and Facebook (now called Meta)
- The Tokyo Stock Exchange (TSE), the largest stock market in Japan
- The Shanghai Stock Exchange (SSE), based in Shanghai, China
- The Hong Kong Stock Exchange (SEHK), the third largest stock exchange in Asia
- The London Stock Exchange (LSE), based in London, UK
- The Euronet Stock Exchange, headquartered in Amsterdam but spanning many European capital cities, which uses the euro as its monetary base
The trading day cycle traditionally starts with the opening of the New Zealand stock market, followed by Australia, then Asian markets, then Europe followed by the American markets.
Here’s what many of those unfamiliar trading words mean:
Ask price – the price at which a share’s owner is prepared to sell that share
ASX – the Australian Securities Exchange, Australia’s stock market
ASX 200 – a list of the top 200 companies listed on the ASX
All Ords – an index of Australia’s top 500 companies
Bid price – the price at which a trader is prepared to buy a particular stock
Brokerage fee – a fee you pay to a stock broker or brokerage site each time you use their platform to buy or sell shares
Bear market – describes a stock market environment in which the majority of share prices are falling
Blue chip – an informal word meaning companies which are well-established and respected, which offer a safe trading option. Examples in the Australian market include BHP, Telstra, CSL Ltd, Fortescue Metals Group, the big four banks and Wesfarmers.
Bull market – an optimistic market in which most share prices are rising
CFDs – a ‘contract for difference’, which is a type of financial product which is bought and sold, based on the value of an underlying asset
CHESS – stands for ‘clearing house electronic sub-register system’, which is a central electronic registry of all shareholders in Australia. Shareholders receive a CHESS certificate as proof of their share ownership.
Day trading – a trading strategy which involves buying and selling shares in one day, and closing all positions before the end of the trading day
Derivative – a financial product which is based on the underlying value of another asset. CFDs, options and futures are all examples of derivatives.
Dividend – an amount paid to the shareholders of a company to distribute the profits of that company. Dividends are based on a number of cents per share owned eg. an 8c dividend means you will receive 0.8c for each share you own
DMA – direct market access. This means you are able to buy and sell shares in live real time on a financial market
Exchange – an open marketplace to buy and sell financial products. A stock exchange is a market where company shares are bought and sold.
Forex or FX trading – foreign exchange trading, converting one currency to another in order to profit from price changes
Fundamental analysis – means looking at a company’s financial statements to determine the company’s overall financial health
Futures contract – a contract to buy or sell an asset at a specified future date for a specified price
Hedge – an investment strategy designed to offset or reduce your exposure to risk. It is related to the phrase ‘hedging your bets’
Index – a group of financial assets which are grouped and considered together, to give an average price of the asset eg. the gold index is based on the price of several gold mining companies
IPO – initial public offering, the price offered the first time a company goes public and is listed on a stock exchange
Leverage – using borrowed money to invest in assets including shares
Limit order – a type of trading order which specifies the exact price you wish to either buy or sell a share
Long trade – a trade in which a share is bought and then sold at a higher price for a profit
Short trade – a trade which involves selling an asset (on paper, to a broker) and then buying it back again to make profit from a price fall
Stop loss order – a type of trading order which automatically kicks in at a certain price to prevent catastrophic loss
Take a Position – this describes the action of opening a trade – you are said to ‘take a position’ when you choose to open a trade
Technical analysis – means using charts which show a stock’s daily price movement, and identifying patterns which determine if that particular stock is going to move up or down, and basing trading decisions on this analysis
Ticker – this is the three-letter or four-letter abbreviation allocated to all shares world-wide, which acts as a unique identifier for that one company. It is usually written with the name of the stock exchange first, followed by the company identifier (eg. ASX:FMG refers to Fortesque Metals Group on the Australian stock market.)
Volatility – a measure of how much a share price fluctuates on a regular basis
How do I decide on my trading strategy and which shares to trade?
Figure out your personal risk appetite
Before you start trading you need to be clear what your investment goals are, and how much risk you are prepared to take in order to reach those goals. Are you looking for capital growth above the current inflation rate, and are prepared to take some loss to achieve this? Or are you more interested in preserving your capital and earning income from dividends? It’s important to understand your personal risk appetite before deciding what sort of share trader you aspire to be.
The pros and cons of trading shares
Make extra income from home
Trading requires no special equipment except a decent working computer and a reliable WiFi network, so it’s a practical way to make extra money from the comfort of your own home. It is particularly useful for parents who may have small children to look after during the day, but have quiet time at night to spend making extra money whilst the children are asleep.
Trade in your own time
Due to international time zones it’s possible to trade 24/6, so trading is a very convenient side hustle for shift workers and other night owls who may be awake when others are asleep. This is one reason the US markets are popular with Aussie traders – the US markets are open during the Australian night.
Trade small with low risk
Some brokers allow you to buy just one single share at a time, so it is perfectly possible to start off making very small trades as you practice your trading skills and gain trading knowledge and confidence.
Set yourself up for retirement
Share trading is very popular with those in the second half of their career who may have one eye on retirement. It is the sort of hobby you can start in your 30’s and 40’s, spend more time on once your children leave home, and then turn into a very profitable side-hustle in your 50’s and 60’s as you maybe consider part-time work, or even prepare for retirement.
Trading is a risky occupation, so if you are uncomfortable with uncertainty, or don’t like taking a risk, then perhaps trading is not for you. The most skilled traders are those who take the least risks.
You could lose money
Most novice traders lose money on the first few trades they make. The secret is to make sure those losses are small ones. Always have a stop-loss order in place which will automatically get you out of a trade quickly if it turns against you.
No ‘get rich quick’
Trading is not a ‘get rich quick’ solution, and those who think it is are usually those who take unnecessary risks and get wiped out. Trading is like any profession – it takes time and patience to get good at it, and you never stop learning.
Requires lots of research
To be a good trader you need a lot of background knowledge about the shares and products you are trading. You also need to know how to read charts, interpret financial information and use the trading platform. This can involve a lot of reading and research.
Top tips for online share trading
Read as much as you possibly can about trading before you start, and take advantage of any education videos or trading courses offered by your broker. Study trading books and make detailed notes to look back on to increase your trading knowledge day by day.
Don’t try and be too ambitious when you first start trading. Start by buying just a small handful of blue-chip shares, and gradually build up your trading experience and knowledge. Expect to make losses along the way – just make sure they are small ones. Never risk more than 10% of your trading capital on any one trade.
Before you start trading, write a detailed plan on which system you will use and how you will manage risk. Make sure you stick to your trading plan and don’t get side-tracked or carried away. Beginners should judge their trading success not by the profit made, but by how well they stuck to their trading plan.
Ensure your trading plan includes a detailed plan for when to quit losing trades. The biggest mistake made by novice traders is not getting out of losing trades fast enough in the hope they will ‘come good.’ This is the equivalent of chasing a bad gambling loss by betting more money.