If you are novice to trading and investing, there is one important thing before you begin your trading. If you have chosen to trade options, stocks, and/or future, it can be quite tricky and therefore you should need a broker. There are many brokers available on the Internet today and your task is to choose the right one. You have to consider several things in picking a good broker which suitable for you.
The first you need to know when choosing an online broker is commission rate. For beginner, it is best to choose the full service broker rather than discount broker. It is because full service brokerage often provides richer stock market education. A full service brokerage may charge between $20 and $35 while the discount brokerage may be less than that. Generally, discount broker may charge $10 or less per trade.
The next thing you should consider is the trading platform. A quality online broker should provide streaming, real time price and up-to-the-moment data for Bid, Ask and Volume. Moreover, online brokerages should offer stock quotes, price charts, market news and other investment news, research reports and other tools. In addition to that, you should choose online broker which have access to many stocks and mutual funds. Before you open a trading account, you may try visiting the company’s website at different times a day especially at the peak hour to see how fast the site loads and ensure there are no technical problems.
Online broker on the Internet may offer different minimum balance requirement for opening a trading account. Some require $500, while some others need $1,000 or more. For a starter, you can choose $1,000 minimum balance requirement. You should beware of brokerage which requires lower opening balance since it will charge you a maintenance fee if your balance falls to certain amount.
Brokerage background is also an important thing to know. Try to visit the website or search for online broker review. You should do research about the broker and find anything you should know. By doing this, you will know which brokerage will meet your need.
Lastly, you should also consider trading flexibility of the broker. You can check other option offered for placing trades. You may like to choose the one which can be reach through phone calls or fax for trading. However, you should be careful of the price they offered since it can be different from the online trade.