Page 26 - Trading #101 Course – Part One: Trading Basics

TRADING #101 COURSE – PART ONE: TRADING BASICS /2017-10-06

Broker

The brokerage industry has changed dramatically over the past 40 years or so.

Prior to Charles Schwab coming on the scene in the 1970’s with his “discount
brokerage” the only way to buy a stock was to go through the old boy’s network and to
pay astronomical commission fees compared with the commission fees of today.

Of course, today just about every broker offers “discount brokerage” fees, and they also
offer a host of other perks as well. Some of these perks are:

• Discount pricing depending on how active your trading account is
• Live streaming data from the exchanges
• Charting platform tools
• Software tools
• Market Scanning tools
• Order entry tools
• Education
• News Feeds

There are probably thousands of brokers worldwide and choosing the best for your
needs can be challenging. They each have different niche strengths and varying price
models. Your decision will be based on your needs, and the costs associated with
those needs.

Many traders and investors will have a few different brokerage accounts each serving a
different purpose. This gets the best of all worlds. Others will choose to do a one-stop
shopping approach and choose a broker that serves all their needs. Depending on your
unique situation at this moment in time you will need to identify priorities and find a
suitable broker to match those priorities.

You can at any time change your priorities and possibly change your broker. So, don’t
feel like you are chained to one provider for life. The markets and you are evolving and
are a work in progress. Reassess your needs on an annual basis to achieve optimal
portfolio performance.

Use the “Factors to Consider” checklist to lay out a “pros and cons” list for each
brokerage and determine what you need to satisfy your trading goals.

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