Timely post for me, as I'm an inexperienced trader and looking for a broker.
Another fee is money transfer in/out and the methods they use. Wire fees add up if that's your only option.
Anyway, the point of my post - what factors should the inexperienced consider. I'm looking into the following:-
- Customer Service
- Clearing Agents
- Funds Segregation
- Available Products / Markets
- Supports Trading Platform
- Server locations
Last edited by sixtyseven; January 9th, 2014 at 01:29 AM.
Reason: addition to things I'm looking at
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All good and valid checkpoints, you could add minimum required deposits and intraday margins if relevant to your trading style. More importantly i would do a background check on the company. First thing i do is check the website, is it professional? Is all the relevant information clearly available, or is it just snakeoil-"come to us and become a winner!" marketing fluff. I take it as an ill omen when i have to dig too hard to find stuff like wire fees, account inactivity fees etc, gives me a feeling they are trying to hide important information. Hit the "About" button: Who's the holding company? Are they listed anywhere? How are their quarterlies looking- is it in a stable financial state? Who are the owners/CEO's? Google them. Is it a serious Broker, or just a Prop Shop looking to add to its liquidity? Is it an "Introducing Broker" ? If so, who's the FCM/Futures Commission Merchant clearing your trades.
To reveal any prior disciplinary actions. Note that it can be tricky finding the "right" broker, as you have to nail the search term, and check any/all parent/daughter companies in my experience.
The age of the company can weigh in as well- you'd probably not want to park your money at some newly founded bucketshop with 2 employees. Then there's more importantly the "streetcred". Listen closely to what the trustworthy people on this forum recommend.
With that in mind, note how one of the most recommended choices up until December was Mirus/ZF, and the disaster that occured.
You also mentioned segregated funds, so with that in mind make sure you are familiar with the disaster-stories behind:
Segregated funds is not the safety-net many thought it to be, especially for us foreign Scandinavians
You should of course do your own homework and make your own reasoning behind your choice(s). I re-did that excersize myself few days ago, and ended yet again on choosing the seemingly safest, currently IB. But as history has proven, nothing is "safe enough" in this business. Dont keep millions in your account, just what you need for trading. Consider spreading your risk to multiple brokers, they are also a huge help(a must) for your disaster planning (when you suddenly need to hedge an open position that you cant close etc). Always have a plan for the worst imaginable situation.
Hope this helps!
Last edited by danielk; January 9th, 2014 at 03:38 AM.
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I am not a fan of brokerages that give different people different rates. And I don't mean person A trades 10 turns a month and person B trades 500 turns a month. I mean two more or less equivalent traders receiving different rates.
I also am not a fan of brokerages that don't advertise their rates on their website. I try to understand their position, but at the end of the day I think it is a bad business decision. Either you make a compelling case via your website why you are the superior and or logical choice, including your commissions -- or you don't.
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Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.
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Brokerage rates involve more than just how many round turns you trade, how much margin you use is just important. Somebody who only day trades, should have lower rates than somebody who trades excatly the same volume but holds positions overnight.
Who runs/owns AMP and what about their financial strength? There is no "About US" information on their website...
Cheapest is not the answer. Reasonable may be the answer. Because I don't want my segregated funds not to be available when I wake up to trade :-(
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