Prior to trading directly in the stock market, one of the major challenges facing you as a trader or an investor is choosing the right broker for you.
In a world where there are multiple brokers charging several different kinds of fees, it is integral that you identify your skill-level and strategy of trading and investing in the stock market.
Just like you would research a lot into the company's stocks that you trade in, researching about the broker that you are going to trade through, is just as much--if not more--important.
1. Discount broker or Full-Service broker:
Full-service brokers usually charge higher fees as compared to discount brokers because they provide you with services such as relationship managers who help you place trades. Sometimes these brokers might also give you trading tips. Remember that these are just advisers and that they can't make a decision for you. Where you choose to invest your hard-earned money is your call.
However, taking advantage of the brokers' knowledge of share trading can help you sharpen your trading skills. For novice traders, a full-service brokerage firm can offer an understanding of managing assets, share trading expectations and how safe is investing in a particular equity-depending on your financial profile.
A discount broker such as Mumbai-based online trading platform like Upstox, is ideal for traders and investors who want to minimise on their brokerage costs. In a world of smartphones and constant connectivity, you can track market trends and make informed decisions with the help of charting indicators, mobile apps and easy-to-use online trading platform. Discount brokers can also help you register for their platform and charge a nominal broker fee but the account opening process is streamlined.
2. Trade calls and tips:
Beware of brokers who charge you broker fees by the percentage of the profits that you make on the trade. Make sure that the brokerage firm has a reputation of keeping the clients' interest at heart and are not solely focused on raising brokerage revenue.
3. Watch out for Hidden fees
Make sure that you read all the fees that your broker charges you. Hidden fees can include anything from additional fees for delivery shares to maintenance fees, software charges and even a minimum turnover commitment.
4. Questions to ask yourself
Identify your strategy of investing in the stock market. If you are a day trader, are you comfortable calling your broker whenever you place a trade? Also understand if you are willing and able to manage your financial portfolio by yourself. A long-term investor or an intra-day trader has to understand the changing face of technology and adapt to various online trading softwares available. Find an online trading platform that best suits your needs. An easy-to-use, easily accessible and fast trading interface can not only enhance your trading experience but also help you concentrate more on trading rather than spending time in understanding how the broker functions.