Candlestick Trading Blog
May 26, 2009
Brokerage Firms
| Brokerage firms are many and there is a lot of information that you should be aware of before choosing a firm. Before you can begin investing or trading stock, you have to have a brokerage account. This is one of the most important decisions that you will make before you begin to invest your hard earned money. In today's article we discuss some information that should help you decide the type of stock broker you should use. First you must understand that there are two main types of brokers to choose from. You can go with the more traditional type of broker, also known as the full service broker, or you can go with an online broker such as a discount broker. Full service brokers are more expensive than discount brokers and they offer more services. They will give you investment advice, prepare reports about your stock portfolio, and will update your on the status of your investments. Of course, those brokerage firms offering the services of a more traditional broker have higher commission fees due to their higher level of service. Discount brokers are more for the independent investor who does most of the work themselves and who can devote the time necessary to do this. They are often online discount brokers and they do not offer investment ideas or investment advice. They simply execute orders for you on your behalf and you don't necessarily have a dedicated broker that you are guaranteed to work with. Most of your trades are done online so if an investor does call in, he or she will most likely get the first broker available. This is an option that works great when short term stock trading since you need access to online trading quickly and repeatedly throughout the day. There are many brokerage firms out there that offer this service. Since the discount broker offers fewer services than the full service broker, their fees are less. Both types of brokers charge per transaction however the fee for discount brokers per transactions is significantly lower. In addition to selecting the type of trading broker you will use, you also need to understand that there is a minimum balance required to open a trading account as well as maintenance fees. The minimum balance required to open an account varies from around $500 to around $1,000 or $2,000 depending on the type of account. You must be sure that part of your investment knowledge is not just how to trade stocks, but also researching the fees associated with brokerage firms. Read the fine print and have a complete understanding of all the fees required so that you are prepared and there are no surprises. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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