Choosing a stockbroker and stock brokerage firm is not a simple task. It requires that you go through all means to make sure you are choosing the right stock broker for your needs. Read articles, blogs or watch videos about trading, stockbrokers and stock trading. This will help build knowledge of what the stocks market entails and how it works.
Choosing a Stockbroker
Do NOT just choose a low fee stockbroker because they charge the lowest fees in the industry compared to other stock brokers. The costs should not be a factor when choosing a stock brokerage firm since there could be hidden charges.
Know which features are important to you before choosing a stockbroker. For example, if you plan on day trading, then it is best to choose a stock brokerage firm that offers direct access to the stock market or charges commissions per trade. If you do not need advanced trading tools and platforms, then an online stock broker is suitable for your needs. There are stockbrokers who offer value-added services like daily stock market insights. Choose one that has all the features that would help improve your stock trading experience.
When choosing a stockbroker, always read reviews about them. This will give you more information about their business practices, how they treat their customers and what type of stocks they offer.
Make sure they register the stockbroker with the stock exchange commission and they submit and approve their financial statements. You can always check this information on the stock exchange commission website.
Stockbrokers to Avoid
Be aware of stockbrokers who got fined for violating regulations set by stock exchanges in your country or elsewhere. Remember that even if a stockbroker has been fined, it does not mean they still do commit such violations, but at least you know what to expect from them after similar experiences in other countries where they operate. If you cannot find any information about penalised stockbrokers, then you can assume that they abide by all regulations and laws put in place to protect investors and traders alike.
Stockbrokers interface Simplicity and Positive Reviews
Check for stockbrokers that offer a simple user interface. This will mean that you will not have to deal with a complicated user interface which can lead to a lot of confusion and errors. Read reviews about stockbrokers before deciding on one. Remember, there are stockbrokers who pay people for excellent reviews.
Do not choose stockbrokers who constantly provide pump and dump signals. Pump and dump stock trading tactics are illegal because stockbrokers will only make money while you lose your investment since they get to sell their shares before shares prices fall. Check the stockbroker’s customer ratings, reviews and testimonials. You can find these on their website or third party stock broker review websites like Yelp and Google Plus. It is important that you read these stockbroker reviews, especially if customers who actually use their service have written them.
Stockbrokers variety of Stocks under one Umbrella
Choose a stockbroker that offers many stocks under one roof. This means that they offer penny stocks, micro caps, OTCBB, pink sheets or any other while others do not. Try reading unbiased stock broker reviews written by people who actually use the product or service. These are the most reliable stock broker reviews since it does not pay them for their opinions and experiences with them in real life. However, make sure also to note negative stock broker reviews because these will help you avoid getting in trouble in the future.
One last thing to note is that they should register stockbrokers and stock trading companies with stock exchange commissions in your country before they can conduct business. If you notice any stockbroker company that cannot register stockbrokers and their stock brokerage firm, then you should consider this as a red flag.
The stock brokerage firm does not follow regulations set by stock exchanges. It might put your investments at risk since there could be security breaches which only legal stockbrokers will not do since they abide by strict rules and laws made by stock exchanges to protect investors like you.