What broker to use?, How do they work?, feck me I’m so confused, haven’t even placed a trade!!
I jumped straight in a friend was using Zerotrade a low budget broker offering 0% commissions on trades, well not all lol, read the small print. So I just signed up to them and am still with them today. Not because they are the best, but because I still class myself as new start, noob or as some pros might say a sucker!! and yes you all will be at some point, their platform is very basic and a little difficult to understand. The customer support is good and will help you with any question about trading and what to do. I look back at some of the questions I asked and think idiot.
I am not going to tell you which broker to use as it depends on your personal preference, but have given a list of things to find out before making a decision.
Key things you need to know when selecting your broker….
1.What country are they based in? – In some countries your money is not protected and some are except the pattern day trader rule (google it if you don’t know)
2.What are the commissions you get charged to trade? – Understand the basic fees, but also the overnight fees and order fee types
3.What fees will you be charged and when? – 2&3 are different so understand them
4.What’s the minimum I need to deposit? – This will be different per broker. (But if your new don’t go all in you will end up broke)
5.What’s the leverage/margin? – most brokers will do it based on amount in your account. Be careful as using this when trading can be very dangerous.
6.Access to shorts – if you’re a short seller like me you want a broker that can get you shorts either free or cheap.
7.What markets the offer? – Make sure they offer access to the markets you want.
Trading is hard you need to make sure your making FACT BASED DECISIONS so get the facts. Loads of real traders have created youtube reviews of brokers so go there for more info, the worst thing you can do is ask in a chat, some chats may have affiliations with brokers where they get paid per customer. At the end of these 8 points you should know your monthly outgoings before any trades based on the amount of money you will put in.
What to find out next.
- Pattern Day Trader Rules – Google This
- Starting looking at support networks, this is unfortunately in the form of chats and yes they cost money, I will review a couple in my blogs soon.
- Remember its a dangerous world and don’t be a feckwit and sign up to someone who says they will make you rich, guess why lol, THEY WILL NOT and you become a SUCKER!!.
- Start learning the types of orders you gat place to enter and exit the market. Investopedia is free and explains loads. http://www.investopedia.com/
I will review all the free stuff you can get your hands on in other blogs.