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Fire Your Broker and Trade Online tells the 45 million investors who are not yet online how they can get started. It focuses on the basics investors need, from getting the right software and opening an account to executing that first trade, without bogging them down with technical factoids and confusing misinformation. From walking the readers through a typical online trade,with reproductions of actual Web pages,to directions for developing the proper mindset, Fire Your Broker and Trade Online gets investors up and running. This all-in-one online primer includes: Profiles of today’s top ten online brokers. A detailed chapter on trading techniques. Which sectors are tailor-made for online investing, and why.

Fire Your Broker and Trade Online: Everything You Need to Start Investing Online

Product Description

Praise for Getting Started in Online Brokers

A veritable ‘Michelin Guide’ to online brokers. Kristine DeForge has compiled an exhaustive compendium, detailing everything from broker commission rates and services to broker accessibility and execution speeds. This is a must-have desktop reference for both the novice and veteran online stock trader.”–Richard Karp, Contributing Editor, Barron’s

“The preliminary chapters of Getting Started in Online Brokers offer a useful primer for readers who are contemplating taking their first step in online trading. The core of the text provides a comprehensive reference of existing online brokerage firms.”–Jack Schwager, Author, Stock Market Wizards and Market Wizards

“The proliferation of online brokerages has left the trader with a myriad of choices. Getting Started in Online Brokers is a comprehensive comparison guide and information source that allows the investor to make a well-informed decision before choosing and opening an online trading account.”–Mark T. Minervini, 1997 U.S. Investing Champion, President, Quantech Research Group, Inc.

Getting Started in Online Brokers

There are lot of differences between traditional brokers and online brokers. A traditional broker is a human who can give accurate guidance for selecting right market and asset to trade. These brokers study lot of resources available in the Forex market and make use of those documents for the advantage of their clients. They can help customers making a trading plan based on their emotions, and financial backgrounds. But they charge very high consultant fees and have slow trading process. Recognized investing firms and long-term investors get more benefits from their services.

Similar to traditional brokers, online brokers perform dealings in exchange for commissions. The basic difference is that the online broker provides internet-based (electronic) access to client accounts. They make use of different computer programs and communication networks. They can provide timely financial news, information, real-time quotes, charts etc.

Coupled with the elimination of direct human involvement, online brokers charge very low trading commissions compared to traditional brokers. They can provide access to electronic quotation services, which bypass the costs of dealing with the major stock exchanges. With the online trading, the trader is capable of getting more control over his money and purchased assets.

This article is written for Orient Financial Brokers (OFB), licensed and regulated by Central Bank of the UAE since 1997, to conduct brokerage in Foreign Exchange, Commodities, etc.

Online Brokers are useful in corresponding to the stock people and sellers. A transaction on a stock exchange must be made between two members of the exchange. A common person cannot walk into the used York Stock Exchange and ask to trade stock. Hence an exchange must be done through a Broker.

In addition to them actually trading stocks for their clients, they can also offer advice to their clients on which stocks, mutual funds, and etc to buy. Some newer Online Brokers offer transaction services online expression within the form of a website interface. These typically offer low commissions, as low as one or two USD, and fast transaction rates, maybe up to two seconds too.

To better understand what Brokers are and how they operate, let’s define the broker’s role as:

They are a type of a salesperson.
They generally work for a stock brokerage house.
Their job is to carry out transactions accurately for you.

Advice for using Online Brokers

There are numerous populace who prefer to use and pay for the services of Brokers because they feel more comfortable making decisions about their finances with the online interactive supervision of a licensed professional.

When using the services of Online Brokers for financial guidance, one must be made aware that they do get paid on a commission basis, that is based on the splendid stock, the mutual fund they sell, and through specific Class Distinctions, Operating Expense Fees, Services Charges, Shareholder Fees.

Hence a conflict of interest arises here concerning Brokers who offers their services as a financial planner as their revenue is generated as a direct result of your investment element within the stock or a mutual fund that they broker to you.

Hence your return on investment can’t be as fantastic, and the advice they give you might not be in your greatest interest. However, some mutual funds and stocks can only be purchased through Online Brokers and in such cases their services are required in getting hold of the financial instrument in question.

Here, they will not ‘cold call’ you that is if you or someone of your trust can obtain a call that offers you the shares at what seems an intolerably bargain then it becomes most important to understand if you are probably being contacted by a boiler room. These are usually not registered with the FSA and could be in a foreign country where fraud laws are negligent.

Who qualifies to become Online Brokers?

The glamorous life of Brokers is not made for everyone. The Brokers must pass two licensing examinations called the Series 7 and Series 63 prolifically. After completing these exams they are allowed to advise you, to solicit business from you, and to execute transactions on your behalf.

Thus, Online Brokers are employed by a brokerage house to facilitate your transactions and, trait within the case of full-service brokers, to advise you in making your investment decisions correctly.

Although Brokers can do their own research, but they are strictly not research analysts. They are not one of the leading people about whom you might read,. Research analysts are other folks who work for brokerages, and it is they who do that sort of enlightening, in-depth research of a company’s business and market.

Categories of Online Brokers

Basically Brokers can be classified into four very broad categories of brokers to give an idea of what is available so that it helps the customers decide where they fall in the spectrum of services offered by the Online Brokers.

Discount/online broker
Discount broker with assistance
Full service broker
Money manager

Choosing the type totally depends on the customers needs.

While there are some situations that may make having an offline broker advantageous, here are the primary benefits that come with having an online stock broking account:

It’s Far Cheaper To Trade Stocks Online – When a customer has a phone line and executes a trade via a live broker, it costs the company a lot of money to pay the brokers wages and have a physical location for that broker to operate from. When the same trade is done online, it’s an automated process handled by a system. This is far cheaper for the company allowing it to reduce the price it charges for execution only trade.

Faster Execution – With an online stock brokerage account, execution is immediate. There is no need to call a broker and wait while the trade is executed. In addition, online broking accounts enable the user to access their account status immediately via internet connection. In the offline world, a customer would have to wait for monthly statements or phone the stock broking company to know the exact status of their accounts.

Availability Of Tools To Help The Investor – Today, a lot of online broker houses provide key information, statistics and investment tools that can help keep the trader informed and help them to analyse stocks. Such services are rare with offline only options.

What Factors Should You Look For When Deciding On An Online Stock Broker

As you can imagine, there are a huge number of online stockbrokers trying to compete for your account. This high competition means that if you look around you’re likely to find an online stockbroker service that has low fees, good reliability and a fair amount of “bells and whistles”.

In this section we’ll look at some of the different factors you should analyse before giving any online stockbroker service the nod:

Low Commissions Aren’t Always Low – Look at the commission charges and structure of the different online broker companies. Some companies may display very low charges on their ads only for you to discover that the special unbelievable rate applies to certain sized trades, or kick in only after a number of trades have been executed. Also be on the lookout for admin or handling charges that are tagged onto some online broking accounts.

What Is The Minimum Amount Needed To Deposit? If you’re a smaller, casual investor then an account that needs $10,000 deposited before you can open an account would not be suitable, even if the fees associated with each trade are quite low.

Do You Need Margin? If So What Is The Rate? A margin account allows you to borrow money to trade with. Different online accounts have different rates for trading on margin so if you’re going to do this make sure you pick an account that’s best suited for this.

The Bells & Whistles – By this we refer to the type and depth of research available to account holders, whether there is any “back up” for problems that may be experienced, the track record of the company (if new it may experience the occasional glitch) and the level of detail available on the trading account. Some online brokerage firms also provide broker research on various companies, charting, relevant news-feeds and other valuable information that can help your trading and research.

Additional Phone Service? Some online broker companies also make trading via phone, or at least some form of telephone support available. Always a benefit.

Reliability Of Service & How Well The Trades Are Executed – You may find an online broker service that has incredibly low fees…but which has frequent bouts of downtime where trades cannot be executed. This can be a frustrating and expensive experience, so ensure that your potential online broker service has a good level of reliability. What have others said about its service? Are there any reviews for it online?

Ultimately, the category of investor or trader you fall under will decide what type of broker and service you opt for. It’s best to analyse these circumstances before you commit to any online or offline broker or you may find your trading needs are not being met.