Everybody wants a discount in 2010, and the online brokerage industry is anxious to provide it.

Full-service broker Merrill Lynch is the latest to enter the online discount brokerage business with its new Merrill Edge online account. This defensive move by that Bank of America unit is designed to stem a loss of business to online brokers who tout price as a major selling point.

In a difficult market year, the competition is brutal among online brokers, who leave investment selections up to you rather than an advisor. Some money-market returns have been so low that big online brokers waived management fees on client accounts altogether so customers wouldn't suffer a loss of capital.

"There's been a price war among the online brokers over the past six months so that most of them are under $10 for a basic stock trade," says David Schehr, research director in industry advisory services for the Gartner Inc. consulting firm in Stamford, Conn. "In addition, Fidelity, Vanguard, and Schwab have all, to varying degrees, begun offering free trading in exchange-traded funds (ETFs)."

Investors under the age of 40 are accelerating the move toward online trades and financial information because they have always had to go online on their job and in their personal lives, he says. They're adept at determining subtle service differences.

"Try the online demonstration that online brokers offer on their sites to show how investing with them works, so you can see if you'll like it," says Cara Scatizzi, associate financial analyst with the Chicago-based American Association of Individual Investors. "Also read the fine print for each online trader so if, for example, a trade for $1 is advertised, you can make sure there aren't a ton of fees attached."

Learn what everything will cost and what you're actually getting.

There are numerous rankings of online brokerages. For example, in overall satisfaction of AAII members among the five online brokerages that its members use most often, Fidelity ranked the highest with a 3.6 out of a possible 4, followed by E*Trade Financial at 3.5, Charles Schwab and Scottrade at 3.4, and TD Ameritrade at 3.3. Rather close.

"The major online sites have become much more user-friendly in recent years so it isn't as scary as it once was to make your own trades," says Scatizzi. "Our members are concerned not only with price of the trade, but reliability of the Web site and ability to talk to a human if there is a problem."

Online brokerage firms typically offer a Web-based trading platform for typical investors and software-based platform for more active traders, she says.

One competitor may be a little stronger in planning tools and another better in research, so it depends on what the individual investor is most interested in, says Schehr. The online brokerage industry has consolidated considerably in the past decade, with many of the brokers that remain the result of mergers and acquisitions, he says. But there are still plenty of alternatives.

"For example, TradeKing and Zecco are newer online brokerages that are a little more focused on social networking, with an open community forum where you can swap investing ideas," says Schehr.

Don't get carried away simply because it's getting increasingly easy to trade.

The North American Securities Administrators Association (NASAA) warns that the majority of the most active online stock traders actually lose money and that trading online doesn't provide any particular advantage in snaring initial public offerings.

It notes that sometimes, during heavy trading periods or because of computer problems online, orders have been processed minutes or even hours after the investor clicked the trade. It also points out that while you can place your orders at any time, those done after market hours won't be carried out until the market opens again.

Also, it warns that online brokerage firms require different minimum deposits to open an account and some require a certain number of trades to avoid a maintenance fee.

Times are changing online and you need only look as far as your cellular phone to see how. There are, for example, high-profile mobile applications for the iPhone from the likes of E-Trade and TD Ameritrade. Online brokers also compete for attention with a variety of quality mobile applications for financial news.

"Mobile investing is the next big area of growth and expansion for online brokers, with the demand definitely coming from the clients," says Matt Poepsel, vice president of performance strategies for the Gomez Inc. consulting firm in Lexington, Mass. "People want access to financial information and the ability to make trades in a manner that suits their lifestyles, which increasingly means using a mobile device."

Most mobile applications aren't fee-based, but require that you be an account holder with the broker or bank. To be accessible to their customers they simply must provide mobile capabilities, he says, even though that creates new challenges in delivering quality and secure service.

"You have to be comfortable with the possibility that in the back of a taxi cab you could lose your cell phone that has a direct connection to your broker," Poepsel says. "

Brokers are doing a nice job of taking precautions and making the customer feel as safe as possible with safeguards in place, but that is nonetheless still a reality," he says.