| This is an interesting and complicated question to | | | | as to which way the market is headed. Of course, |
| answer. To my way of thinking, there is no answer | | | | from my perspective, it’s important to trade just |
| but to use a deep discount internet broker. I | | | | the chart, but I can envision any help for a novice |
| don’t need advice and don’t really want to | | | | trader being a good thing. |
| talk with a broker on a regular basis. But then again, | | | | So it comes to don’t price and your trading |
| I have been doing this for a while. | | | | needs. If you are new to trading, I don’t know |
| Having worked the retail and institutional sides of | | | | that a full service broker would be the worst decision |
| trading, one thing you will find is that large deep | | | | in the world. You will get strong support and the |
| discount brokers are not the chatty types. They | | | | best advice the broker can offer. But you will pay a |
| will answer questions, but by and large, they are | | | | price for this, and you will have to decide whether or |
| very busy and want you off the phone as soon as | | | | not the price is worth the value a full service broker |
| possible. And that is really just a matter of | | | | provides. |
| economics, a deep discount broker is going to spend | | | | On the other hand, a deep discount broker will offer |
| the most time with his largest clients...the ones with | | | | you a round trip at a price anywhere from $5-8. But |
| which makes him the most money. If you are a | | | | you will basically get a trading platform, a DOM and a |
| novice broker with a $5,000 account, you can count | | | | statement every night. I can also tell you some |
| on a minimal amount of support. | | | | horror stories about trades gone wrong, or trades |
| This lack of support becomes especially important if | | | | that did not get entered. In the case of problems |
| you enter a trade improperly, make some sort of | | | | like these, you might well have put your money into |
| mistake, or don’t get a proper fill. Time and | | | | a black hole. It takes time and effort for the broker |
| time again, I have watched new traders try and | | | | to decipher the computer machinations on a trade in |
| trade thin markets, with wide bid and ask prices, and | | | | question to get it straightened out. All the while, |
| have a nearly impossible task of exiting the trade at | | | | your money could be tied up and you are unable to |
| any price. A discount broker may give you some | | | | trade. Of course, situations like this are rare, but I |
| perfunctory advice on what contract to trade, but | | | | have experienced on two different instances and it |
| he is not there to teach you to trade, and he | | | | can be infuriating. The truth is simple, a broker is |
| won’t. | | | | going to do what makes him the most money and |
| On the other side of the coin, a full service broker is | | | | fixing a botched trade, even if it was a computer |
| going to have all the time in the world to speak with | | | | problem on the part of the brokerage, doesn’t |
| you. Of course, he is much going to charge a much | | | | make the broker any money. It will be a low |
| higher commission than a deep discount broker. But | | | | priority. |
| sometimes, I suppose the advice might be worth the | | | | I use a deep discount broker, that does not mean |
| extra commission. A full service broker is more likely | | | | that you need to do this, though. Give your trading |
| to point you to highly liquid markets where you will | | | | situation some thought and decide if the extra |
| experience minimal slippage, and give you some inkling | | | | money is worth the price. |