Online Trading Brokerage

Brokers are in the same category as bankers, accountants and even lawyers. They make their money by representing others in financial matters and accessing information that is not easily accessible by the public. They are the private investor’s gateway to Wall Street. While the advent of the internet has made it quite simple for private investors to do their own trading, the same concept that has always applied still holds true. If you want to trade any types of bonds, stocks or other commodities you really need to have a broker.

Not All Brokers Are Trustworthy
No matter what it is you are looking to buy, whether it is a pair of shoes or a house on the beach, you are bound to encounter someone who is out to cheat you. This cannot be helped as there are a lot of undesirable characters in the world. The same rule applies when you go looking for a broker. Some of them may want to charge you an arm and a leg for their expert advice. After all supply and demand right? Not always. There is no reason that you should have to pay ridiculous fees for an online trading broker. It is just as easy to find a discount brokerage that will be very good at what they do without breaking your pockets.

What Exactly Do Brokers Do?
Brokers work to help customers buy and sell specific commodities. What they do is very similar to what a retail store does when they operate as the middle man between you and fashion designers. You go into the store to purchase something to wear and the clerk helps match you with an outfit that suits you. When you go to a broker his/her job is going to be to middle man between you and whatever security it is that you are looking to trade with. It is also important to note that the term “broker” can describe a number of different things. You can use it to describe a person who sets up your deals for you or even to describe an entire company such as Merrill Lynch.

Requirements to Be a Broker
In order to act as a broker in the US, a person has to pass two separate licensing tests that are given by the NASD (National Association of Securities Dealers). These tests are called the Series 63 and the Series 7. By taking and passing these tests the person is deemed capable and educated in matters that involve the laws and regulations surrounding the securities industry. However, the US is not the only country that has these requirements. Most other countries also have some kind of licensing requirements.

How to Choose a Broker
The first thing you will need to decide when looking to hire a broker is whether or not you think you will need a full service brokerage or if a discount brokerage will do. With a discount brokerage a lot of the decisions as well as leg work are left up to you. This can be a lot of fun for someone who is interested in brokering for trading. However, you must remember that a full service broker does come in handy sometimes and if you do not know what you are doing, you can make fatal mistakes that could wind up costing you a lot of money. The choice you make is very important. If you are new to online trading then a full service broker may be the way to go.

Once you have decided which type of broker you want to hire then you will want to do some background checks of your prospects. Find out what the reputation is of the individual or firm you are thinking of using. Online trading can be quite profitable as long as you are being led by someone who knows the ropes.

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