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As soon as you have done what is needed to test a trading system, you will find yourself ready to trade. This means you need to select a decent broker. Many markets make it a requirement that all traders perform trades through a broker. This means you have to select from two different types of brokers: the full-service broker and the discount broker.

At the key to the heart of finding a reliable broker means seeking one that suits you and your individual trading style.

Here are some questions you should consider when choosing your broker – either online or full-service.

1. What are the real commission rates?

The commonly advertised rates for traditional brokers may range anywhere from a non-existent fee of Also, if you're dealing with a full-service firm, remember their commission rate is negotiable depending on how much business you are running through your account. Negotiate hard and get the best rate you can. Brokerage is a cost of doing business and as such you should always look to lower your expenses. to upwards of per trade for online services and up to 0 (or 1-2% of the size of the trade) if you have decided to access a full service system. That is why is it of paramount importance to clearly look at the company's advertised rate and what it specifically applies to. In the great majority of instances there will be a significantly greater fee for brokerage services due to different trading instruments vs. those using a "real live" broker available and accessible through the phone. Sadly, one of the more common facts people discover is that the commonly advertised commission rate may not be directly applicable to the trades you make.

2. Are there any other extra fees that must be covered?

Many companies, both online and full-service, charge extra 'hidden' fees, that can add significant costs to each trade. Charges to be aware of include those for transferring funds (both in and out of your account), insurance, administration charges, late payment penalties and more. You really need to look at the company's fine print or e-mail for more details.

3. Can a member trade in multiple markets and, if this is the case, what will the commissions be?

As your trading venture progresses you will probably opt to trade in a variety of markets. That is why it is best to stick with a broker that you have developed a decent trading relationship with. That is why it is best to plan for the future and select a broker that can provide you with your needs as your investing grows.

4. What about the interest on the balance of uninvested funds in the account? Will it be paid?

Some online and full-service brokers pay interest in the range of 3-4%. A nice little bonus!

5. Is a large deposit required to open an account?

Beware of high minimum balances required to open an account. While some companies have good rates, you may need ,000 to start. It's a lot of money to invest with a company you haven't traded with before. Typically full-service firms will require more capital to start an account than a discount online service.

6. How reliable is the service?

The expedience and the reliability of online trading are factors that deliver the utmost important attributes. Imagine being a client that suffered a ,000 loss due to being unable to log into an account due to a server issue. Such issues happen and, thankfully, some services offer backup plans to deal with such issues.

When you seek an online broker, it is best to look towards an offering of a Straight Through Processing. That means the trades are on the market as soon as they are produced. Among some discount brokers, the trades are placed manually so the trade may not be actioned until sometime after it has been placed.

As such, they are not actioned until after being placed.

7. Are any automatic features offered?

Examine the common extras the company has to offer and then weigh it against the extras that will complement your trading styles. You should not be interested in automated features that will never be used. Such services will be worthless to you.

One excellent feature is that of automated stop losses. Such a feature will enable a trader to set a specified exit point with an automatically triggered function. Another aspect worth checking out is a contingent order which raises questions regarding whether or not one is allowed to place conditions that need to be met prior to an order being automatically placed? For example, if the share price breaks out from your specified buy point of , an automated buy trigger may be enacted.

The automated extras are commonly associated with online brokers, but it may be possible to find full-service brokers that make such offers as well.

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Tags: trading system, trading systems