Brokerage firms or brokers are the financial institutions who enable traders to buy or sell securities on the exchange. As traders can not place their orders directly on the exchange , a medium is required to do so . Brokers offer traders a platform where buyers and sellers can place and execute their orders.Choosing a right broker is a must. As brokers charge a commission for their services you have to be very carefully while choosing a right broker for yourself as per your requirements.
Following are some of the parameters analyzing which you can choose a right broker:
1) Fees & Commission
Traders have to compromise their profit if they have to pay huge commission. Before choosing a broker carefully analyze its commission structure and ask if there are any hidden charges. Traders can choose discount brokers to save brokerage cost as they charge only for every executed order.
Visit brokers website at peak hours of the day and see if you can access it timely or not. As if it is taking too long to respond it may cause you miss some good trading opportunities. You can also check its links to ensure technical stability.
3) Trading Tools
To trade in a smarter way various trading tools are required. You should first identify what tools are mandatory for you and then see which broker is able to provide you with those tools. These tools may include : fundamental reports, technical charts, margin calculator, option strategy builder , watch list, pre-risk analytics and more. As your success depends on the availability of these tools.
Other than these basic requirements there are some brokers who offer other additional benefits as well. Webinar on trending topics, tax information, and other market-related information which is important for traders are also offered. These resources help to keep yourself updated with the market . Therefore it is good if your broker offers you these extra benefits as well along with their services.
5) Security level
Online accounts are open to various kind of thefts. Therefore to ensure the safety of your data , brokers have the multi-layers security system so that your data like PIN number,account details etc are always safe. You must ensure that your brokers are facilitating you secure mode to carry out your transactions.
The most important factor which decides who is a right broker is need of traders. Traders who do not trade frequently , for them fees and commission are not a matter of concern , but for active traders it is. As their profit will decrease if they will pay huge brokerage. Just looking at services of brokers is not sufficient to decide it is right for you or not. Primarily you should analyze your needs and also look for possible mediums to minimize your brokerage cost.