Author: Scott Ervin

Article:
Finding The Right Broker

Ok, so you have done some research on the futures markets, and
have decided to try your hand at trading. You have by now
evaluated which contracts to trade, either by interest in a
specific market, or by your belief that you have good
information on future market moves through your job, or contacts
you deem well informed. The next decision to consider then, is
choosing a broker.

The current trend in brokerage houses is to offer rock bottom
commissions on round turns, but very little in the way of
information or support services for their customer base.
Although this option is good to have, there are certain issues
to consider when looking at these types of brokers. The first
realization you should have is an old adage that still holds
true, you get what you pay for. Though some traders are
experienced enough, and pay for enough outside research to make
use of these discount services, most of us will need a lot more
help from a professional to be successful long term. With most
discount brokerage services, you are on your own.

So then, what is the alternative? Full-service brokers can be a
good alternative for the novice or intermediate level trader.
The basic idea of the full service broker is relatively simple,
he or she should be a person who is well informed, accessible to
you, and able to help you avoid some of the common mistakes made
while trading. Additionally, a broker who is good for you should
be well informed on the markets you are trading, and able to
give you recommendations when you're struggling with market
strategy. If you have traded before, you probably also know the
value of having someone reliable to resolve issues dealing with
problems with your equity statements, margin, or any other
possible office error. The full-service broker should take care
of details and problems, leaving your mind free to focus on
trading.

The question of commission is the last issue to address when
evaluating the full-service broker. What is a fair rate? This is
a very relative question. Although you should obviously price a
few different brokers, to see what others in the field are
charging, this question boils down to what kinds of assistance
you think you will need to trade effectively. Two questions to
ask yourself when negotiating your round turn rate are: A: What
is a fair price for the expertise and assistance this broker is
offering? B: Is the cost of using this broker an expense that
you can cover, and still be profitable, on a per trade basis?

Hopefully this article will help some of you to evaluate
brokers with some specific criteria in mind. As a licensed
futures broker myself, I find that an informed customer is
usually the easiest to deal with, and more confident in his or
her trading. The goal is to find an ally in your trading,
somebody who is invested in you attaining your goals, and this
is a good place to start. I always appreciate feedback from the
trading community, so feel free to send me any of your
experiences or comments.

Good Trading!

Scott Ervin Futures Broker servin@webvestor.com

About the author:
Scott Ervin began his career in the futures markets on the CME
trading floor at age 17. After 13 years of honing his skills in
the markets, he now works as a licensed futures broker in
Chicago. Scott 866-907-5227 servin@webvestor.com

Find the market wizard - FREE membership today!

Learn Forex Trading