School of Hard Knocks: The Most Expensive Lesson
We’ve all been there.
At some point, we’ve all been new to trading.
We don’t even know how to buy a stock or even an option. We’re not sure where to start, or even whom we should be talking to. Unsure, confused, and lost when it comes to choosing the right broker many of us choose the broker with the hottest offer at the time.
So we sign up for it, only to find no customer support, no speed in order execution, and countless customer support issues. In a heartbeat, we’re done. We’re alone. We have no more interest in trading on our own anymore.
Or, we make our way through the glitz and glamour of the site and place our first trade, only to watch it sink moments later. Having no idea how to close it out, or even set a stop loss, you call customer service only to wait on hold for seems an eternity.
It happened to me 20 years ago.
A few days before Amazon’s dramatic surge a mysterious pattern appeared. It was just spotted again with two BIG stocks. Their names are (Continue…)
However, as I’ve learned, when it comes to choosing the right broker for your needs, there are quite a few things you must identify, including:
- Commissions and fee schedules
- Speed of order executions
- Ease of use
- Site security
- Customer support issues
Some of the best brokers out there are eTrade, Trade Monster, TradeStation, and OptionHouse. But which is best for you?
When it comes to commissions and fees, you are charged something on each and every transaction. Sometimes there are other fees for deposits and withdrawals, or extra fees for special orders. Be aware of all commission structures and applicable fees so you’re not being taken to the bank.
Speed of order execution is important, as well.
If you’re transaction isn’t placed quickly enough, it can negatively impact your trade. If not placed fast enough, it could very well impact if your trade is placed at all. The best brokers out there will place your trade as quickly as possibly, ensuring best trade possible.
Plus, always make sure your broker’s site is fast and responsive.
If the site has a tendency to move slowly, you may want to move on. The last thing you want to experience is a slow site that can lead to missing profit opportunities, or misplaced orders.
Make sure there’s ease of use.
Trading and investing is hard enough for some people. The last thing you need to see is an unorganized mess that’s hard to navigate or understand.
Are security measures up to par?
Ask around, do your due diligence. Does your preferred online broker have a trustworthy site that can’t be hacked? Identify and ask questions to see what security measures are in place.
The last thing any of us need to do is lose money, especially to a hacked site.
Make sure the site has a good reputation.
Some of the best online brokers – as mentioned above – have great track records for high quality servicing to customers. Stick to what’s well known and used often, and you can sleep better at night. We mentioned those sites above to help make your decision-making process a bit easier, too. They have some of the highest qualities.
Consider the knowledge and level of customer support.
We’ve all been through poor customer support issues before. And – as always – it’s inexcusable. If you get a guy on the line that has no idea was a limit order is for example, move on. If you get a guy on the line that’s rude or places you on hold without a care in the world, move on. It’s your money at stake.
If you have a technical issue on your end, you want to make sure it can be fixed with some one knowledgeable, as well.
Don’t go gentle into that good night without a reputable broker.
I learned that the hard way years ago.