As any serious investor knows, finding the right broker to handle your trading activities can be the difference between being a successful trader and throwing away your money on sure losers. For so-called “day traders”, this paradigm may sometimes seem outdated – particularly since so many independent investors now believe that the new technologies enable them to make trades without the assistance of a real day trading broker. The truth, however, is something else entirely. Having a broker to not only execute your trades for you but to provide insight and expert guidance is still one of the best ways to shield yourself from making mistakes you’ll later regret.
Traders vary in their approach
The first thing to understand about finding a broker to assist you in your trading activity is that no two brokers are exactly alike in their overall approach to managing clients or trades. Obviously, the level of trading that you intend to do with have a tremendous amount of impact on which brokers are going to be suitable for you. Some of the larger brokers that handle investors who trade tens of thousands of shares each and every day are sometimes not as efficient at managing smaller accounts that might only trade several hundred shares. Your job will be to find the day trading broker who can best meet your need for quick, reliable trades at a low cost, and at least a minimum amount of expert analysis and advice.
What are your goals?
Before you look for a broker, it is important that you understand your own trading goals. If you intend to hold stocks for only a limited time, then you will want a broker who is accustomed to chasing the ebb and flow of the market. If, however, your strategy is to find several good stocks and hold them so that they have time to accrue maximum value, then you will be well-served by a trader with expertise in managing less volatile portfolios. Basically, you want to decide whether you are trading in an attempt to make money fast, or as a long-term vehicle of investment.
Doing your homework
You’ll have to do some research online to find out more about each of the many brokerage firms vying for your business. When you do your research, be sure to check for any forums or sites that review a firm’s reputation. Many times, people who have had experience with a day trading broker – whether that experience is positive or negative – are only too happy to share their stories on a forum or blog. These personal testimonials can give you important information about the timeliness of the broker’s customer service, the firm’s rates, and the minimum investment amount that they require.
Joining a club
One effective way to get started in the world of day trading is to join a day trader club. There are a number of these groups around the country, and they all share a desire to help each member better understand the complex world of stock trading. Just be sure that you take your time and fully understand where your money is going before you begin your life as a day trader.