Trading in the capital market comes at a cost which is known as commission. Commission is the amount you pay to your brokerage firm for executing a market order to either buy or sell shares or derivatives on the stock exchange. There are many brokers in the market who facilitate such a transaction. They all have different commission models and rates. Deciding the best model that suits your needs is your first step to start investing and be a good trader.
Here are a few things you should consider before opening a trading account with any broker:
Choosing the right broker!
Choosing a broker who does not drills a hole in your pockets is one of the first things to look for while opening a trading account. Here are a few things that should be on your checklist while finding the right broker:
- Your technical Skills: If you are somebody with a techno-savvy background, comfortable with online programs and computers, you can execute your transactions yourself with online trading platforms and even save on it. On the other hand, if you are not technology friendly you can always call and book your trades in exchange for a small charge.
- Brokerage: Brokerage is the amount that you pay to your firm to carry out a transaction. To save cost on your brokerage you can look for discount brokers. There are a number of discount brokers who offer trades at a very low price, dealing with them will help you save big on your trades and increase the profitability of your investments.
- Market Reputation: It is really important to look at the cost effectiveness of the broker but it should not be at the cost of the product you are purchasing. While choosing the right discount broker you should consider reviewing and finding out how the services of the broker are and if there is any downtime in their trading platforms. All trading platforms have some downtime for technical up gradation but some brokers just have it all the time. So, check out the reviews of people who already using the services of such a broker and inquire about the quality of the trading platforms and other value added services.
- Mobile interface: Almost every broker is now online and has a mobile app which allows you greater flexibility and gives you the ease of doing your transactions from anywhere.
- Financial guidance: Most firms have a learning portal attached to their website where new investors can study and learn the art of investing. This should also be on your check list while finalizing your discount broker.
Once you have done your research and finalized your discount broker you are now ready to venture into a whole new world of opportunities and rewards. Share market is place for patient people, if you are disciplined and patient you are bound to succeed. It can also be a nightmare for people looking to make quick money and leave them with nothing. So plan your investments, do your research and watch your money grow like it never has.