Top Nine Tips To Find The Right Stock Broker Before You Start Trading. — ASXnewbie.com
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Top Nine Tips To Find The Right Stock Broker Before You Start Trading.

One of the most important decisions you will have to make before you even start to trade on the stock market is which stock broker are you going to use. For choosing the wrong one could cost you dearly, not only in brokerage but in other vital areas as well such as time and profits.

So what is the criteria to look for in choosing a stock broker? So what questions should you be asking them?

Here are some key questions you should be asking your broker.

1. Do they hold an Australian Financial Services License (AFSL 309743), which has being issued to them by the Australian Securities & Investments Commission (ASIC). If the answer is NO then you would be well advised to steer clear of them.

2. What trading tools are readily available from your prospective broker? Do they have up to date Stock quotes, tthe very latest news, charting facilities, level II data and advanced order types are one of the many vital tools that traders will require for informed,decisive trading. So make sure that the broker offers a suitable range of trading tools.

3. How fast are their stock orders being executed? Remember that online trading is significantly faster with stock order processing than placing your stock orders over the phone. Therefore this will mean faster order executions, which results in saved time and also greater control of your stock orders.

4. Does your broker get paid for order flow? Some brokers may receive payments or commissions for sending orders to favorite market makers. Obviously this can lead to a conflict of interest. Make sure you know your broker’s policy and that they have your interests at heart..

5. Do they have a trading demonstration platform available ? And if so, whether there is a cost involved for accessing this service.

6. What sort of trading platforms do they have in place? Is this trading software easy to manage and is it up to date.? For if you are using a slow or an unmanageable trading platform, this will slow your trade transactions down drastically. This will cost you time and money in lost opportunities, which of course is detrimental to your trading capital and profits..

7. Do they have conditional orders, commonly called stop losses available? These are vital in managing your risk factors.

8. Do they trade after hours? You need to know this particularly if you are trading the overseas stock markets

9. Are there any hidden fees that you need to know about? Brokers might advertise low commissions but then could charge you with unexpected fees. For instance there are some brokers who will charge for low balances in your trading account, inactivity in trading or account maintenance fees.

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