0 Brokerage Firms "Pitfalls of Internet Trading"

Choosing a brokerage firm does not have to be an insurmountable achievement. A little bit of homework can determine whether an online brokerage firm can handle your needs. Asking a few basic questions can go a long way in determining whether an online brokerage firm is what you are looking for.

We already covered the pros and cons of specialty brokers. Understanding your own financial goals will help to determine whether you are interested in trading with a specialty broker or not. If the only stock that interests you is commodities then you may want to choose a specialty broker. If you want something more diversified then you probably want to go with a firm that requires a more rounded education from their brokers.

When comparing commission rates remember that the lowest is not always the best. While there is something to be said for you get what you pay for, find out what it is you are getting when you are paying. Are the commission’s flat rates or are they based on the size of your trade? A struggling firm may suddenly have a commission “sale” and drop their commissions to nothing for a period of time. Use your own discretion before deciding this is a good opportunity. Look at their trading history. Is this just a promotion to get them over a hump or have they been continuously struggling?

Read the fine print when it comes to the firm’s policy on executing enters and cancel orders. A bad policy is bound to cost you money. Read the fine print on the firm’s policies on broker mistakes, web site crashes, and of course, margin accounts.

How accurate is the information you are receiving either via e-mail or ticker bar? Are the stocks quotes in real time or do they have a delay? Does the broker send blanket e-mail notifications (most do) or are they tailored to the type of investments you are interested in?

The basic answers to these questions can determine whether a firm is right for you. Remember that you will most likely never talk to an actual person so all of this information should be readily available right on the website. Online trading does not offer the personal touch of a traditional brokerage firm. Don’t expect phone calls from your broker to discuss your portfolio. If you are uncomfortable being a faceless number instead of a unique investor, online trading is not something you are likely to be satisfied with.

Online trading has its distinct advantages and disadvantages. Most people who transition from a tradition broker to the convenience and speed of online trading are quite happy with the principle even if they find themselves dissatisfied with the firm. You can eliminate the disappointing firm experience by doing your share of due diligence before proceeding.

If you are still hunting more in depth information regarding online trading I recommend the website for unbiased reporting on online investing. Online trading ideas provides accurate and unsolicited information regarding online trading and navigating the world of online finance. The website is dedicated to educating the beginning and average investor in order to create personal success and financial health. Onlinetradingideas is a valuable resource in your journey towards personal investing independence. Be aware of the "Pitfalls Of Internet Trading” and avoided them if you can AT ANY COST.

Author’s note: Bobby Ryatt, If you enjoyed reading this articles, then go to my website where I have lots more on the subject. You will have free to use material and tips, No more guessing or taking risks after this. http://www.onlinetradingideas.com & http://onlinetradingideas.blogspot.com