You know everyone is eager to make money on the market. Trading is risky unless you know what you are doing and have a reliable broker. The broker provides you the platform to trade and you get your trading account from him.
Type of broker and trader
This brings up the question of the types of brokerages available for a new trader. Do they provide the same service and which one must the trader choose? A trader entering the market for the first time has no idea what he is looking for or which stock he must choose. The seasoned veteran will not need any advice…he will already be there trying to make some quick profit.
The full-service broker offers as the name says, full-service. He includes personal advice and material about the movement of the stock on the market. Reading this material will help the trader a lot. It will tell him which stock to pick and which way the markets are going. So, the newbie trader must opt for the services of the full-service broker. This will help him.
Usefulness of the discount broker
The seasoned trader does not need advice. He detests the idea of borrowing ideas to make his trade. This person needs the service of the discount broker. The online discount brokers do not give advice. He provides the trading platform but that is all. It is up to the trader to make his moves and get the profit. Most of the discount brokers do not offer material about the market movement.
You know by now that the price of the discount broker is much lower than that of the full-service broker. In a typical case, the price of the full-service broker is $120 per transaction.And that of the discount broker is $20. If you make ten transactions, the difference is $1000 in a day between the two.
Fee for discount broker
The trading fees you pay to the discount broker are between $4.90 and $20. This will be between $7 and $12 and this low rate attracts more customers. Once they gain the market share, they gain a momentum in the market as well. At times, the online discount brokers offer free trades. But, you must do your own research. How does one do the research?
You have to read the Securities and Exchange Commission (SEC) filings. You have all the information there and you must read and prepare for taking a test. You can research the stock because you get all the information there. You must know what you are looking for in these stocks. Check the trends and watch the factors that affect the revenue growth. Investors love the revenue growth. This is the key factor to the stock acquisition.
When the broader market becomes cold, watch for the net income growth and a good strong balance sheet. The safety play in these environments is share buyback and dividends. But before you get your broker, first know what kind of a trader you are and what you expect from your broker.