How to choose your first broker, a beginners guide

Stock markets are lucrative yet risky career options, especially for novices who have little or no knowledge of trading. Investment without good insight could prove to be a drastically wrong decision. Although, not every trader has the opportunity to learn to trade in detail. In such cases, approaching a stockbroker is a good option, as they are experts in the field and know where to invest to maximize the returns.

A broker is an intermediary between the investor and the stock exchange. However, there are unlimited broker options available to earlier generations. But of course, more choices lead to greater confusion. There are two types of brokers, regular brokers who directly deal with clients and the other are broker-resellers who act as the channel between the client and prominent brokers. It is advisable to get the services from regular brokers as they are members of recognized organizations. It is not that broker-resellers are bad choices always, but one needs to check and do research about them before signing up.

Most of the established brokers have extended their services to just executing the trades for you. They are now called ‘Financial Advisors’ who keep an eye on the stock market for the investor and offer individual advice and recommendations. Then there are online discount brokers who provide a wide range of strategies and tools for novices as well as experienced investors. Your choice of broker should reflect your investment style. Leading international trading guide Dailytrading.com suggests ‘If you are a trader looking for quick gain and make trade execution for short-term trade executions then you should look for a broker with very low executions fee. Another important factor is that they should be registered investment advisors. They must have a license from state security regulators.’

With the advancement of technology, the revolutionary invention of robo-advisors has become a boon for traders. Instead of human advisors, one can research robo-advisors, which are automated platforms that use computer algorithms to manage your investment portfolios. They are also backed by real advisors for live support services. These robo-advisors provide advice based on inputs about investment goals, time horizons, and risk tolerance.

One can even have more than one broker if one wishes, but this is not an ideal choice as their advice and recommendation may contradict and leave the trader in the middle of the confusion. According to Daytrading.com ‘ Your first broker is not necessarily your last broker, but if you are judicious at your first step and choose the broker wisely, you may have chances of making a good return from your investments from the beginning itself and, the broker will change and implement the strategies and develop your portfolio based on you changing needs.

For more information visit here – https://www.daytrading.com/