You will not be able to start trading without the services of a stock market broker. Even if you want to control all of your trading systems, you still need a broker to place trades for you. This is why you should spend a fair amount of time in your search for a brokerage company. Four points should come to mind when you are about to make your pick.
Brokers earn a lot through commissions. Usually, there won’t be much of an issue when it comes to finding out how much a broker wants. They give the figure straight out. In general, rates can settle at around $40 but some can ask for as high as $100. High rates are asked for by brokers that give full services. Aside from placing trades, these brokerage companies may also provide useful trading information or even expert advice. The benefits that you get out of these justify the extra cost. Do consider though that if you have a trading system, you may not need the extra services of your broker. In fact, the extra advice might even contradict with a system that already works.
Commissions aren’t the only expense involved in trading. You also need to pay a handful of fees. Unfortunately, some of these are hidden so you only get wind of them once a brokerage firm starts asking you to pay. Make sure from the very start that you ask what additional fees there are and how much these will cost you. Even if you pick the best stock market broker, you may have to pay for transfer fund charges, insurance and penalties. If you get a full service provider you will have to pay extra for insider tips or advice.
Dependability of Service
Not all services place trades in real time and not all of them offer different ways to place trades. You may be at a disadvantage if you opt for manual services that don’t have backup systems for indicating your preferences. These are simply too unreliable. If a system glitch affects the primary portal to access your accounts, it may take hours or even days for you to act on a dwindling account. Also, manual stock market brokers can take time to act on your wishes which means the entry or exit point that you’ve identified may have already been missed by the time action is taken.
Some discount services provide the option to open trade accounts for as little as $100. Traders who have been around for quite some time however may be with brokers who require minimum initial accounts to start at $10,000. You may want to start with a big figure if you want to increase your chances of winning more. What you need to remember is that it might be too much of a big risk if you deposit a very large amount of cash with a broker you do not know and have not tested.
Every registered stock market broker can place trades. Not all brokerage companies however can provide what you want or need. You need to choose a service provider based on your own personal considerations. The right choice plus a solid trading money management system can give you a sure shot at a prosperous trading career.