Finance concessionaire

A manner that investors get ripped off and in a sense rake themselves off is based on the civilization of public presentation in the common monetary fund industry. If you halt and believe about it there is absolutely no ground that the past have to be the future. If you have got not been particularly successful as a stock investor in the past, for instance, there is no ground that you won’t be unsuccessful in the future. One ground I trust that you are reading this article is that you desire to better as an investor.

Let’s discourse how professional gamblers net income in Las Vegas. Card counters are a type of professional gambler that usages their memory of what card cards have got been dealt out of a deck in a game of blackjack oak (also called 21). Since there are only a certain number of each type of card they can increase their stakes when it is more than likely that they will win then lose. This plant because after the shuffling the deck starts with a certain composition and a number of games are played until the adjacent shuffle. Toward the end of the deck you can cognize what may be coming out if you are paying attention because each manus in the deck is depends on what have been dealt before.

There are no professional gamblers who number the numbers rolled on a brace of die on the snake eyes tables. This is because there are only two die and each axial rotation is different. In other words, each axial rotation of the die is independent of any other roll. Since each axial rotation is different it doesn’t matter what was rolled in the past. The same thing would go on if the deck in a game of blackjack oak were shuffled each clip between hands. This is a batch like the stock market where we don’t cognize what the general degree will be from clip to clip because of random information entering the market in the kind term. Mutual monetary fund managers seek to outsmart the market in the short term instead of patiently waiting in the long term where it is more than likely to correctly determine if pillory are high or low.

So why then makes the public wage so much attention to the nonsensical advertisement of common finances that boast about anterior public presentation in past years? Mutual finances purchase expensive advertisements in newspapers, magazines, and on telecasting where they tout their public presentation over the past one, three, five, and 10 years. The common monetary fund industry irresponsibly advances this “culture of performance,” even though it cognizes perfectly well that it misleads investors. Studies have got shown that if you take the top 10% highest yielding finances in any year, four out of five of them will not be in the top 10% A twelvemonth later! For this ground I strongly urge that if you can only purchase common funds, as in the lawsuit of the 401(k), then curtail your purchases to indexed finances like the Vanguard 500 (VFINX).

"It is not because things are hard that we make not dare, it is because we make not make bold that things are difficult!" Lucius Annaeus Lucius Annaeus Seneca (5 B.C. - 65 AD)

If you're just starting out as an investor, doesn't matter your age, it's kind of scary!

You cognize you're supposed to make something with your money, but what?

Where make you really begin and what's considered safe?

First ... Relax!

Don't believe you have got to cognize everything today. It takes old age to understand investing, and no 1 fully cognizes exactly what's happening all the time.

So you're not alone if you're feeling a small flooded and under-informed. Eventually you will do investment determinations with as many facts as you can piece but you have got to recognize that you can never really cognize everything.

The best portion of investment is to learn to dwell with the anxiousness of the unknown!

There are always nay-sayers who will state you that investing is for professionals, or that the market is too high, or that it is going to crash!

The first statement is false! The second is relative depending on a clump of factors and the 3rd is always a possibility depending on how you define crash!

If the Index travels to 10000 and "crashes" back to 8000 and you invested at 7000 you have got not really suffered! Are this a crash?

Well, that depends on how you define crash. If you bought pillory at 10000, and sold at 8000, then you have got got got got got got got experienced a "crash."

If you bought and held on, or used down market strategies that you have learned to hedge your investment, then you have not experience a crash.

You have experienced an educational event!

And if the market retrieves and travels to 11000 and you stayed the course; you have made some good money.

The point is that in order to understand the investing human race you have to get started, and in order to get started you have to make the committedness that you can accomplish your goals.

In order to accomplish your ends you must learn about the markets and put some of your income to get to where you desire to be.

It is as simple as that!

You can seek it and opportunities are that you will be happy when you get to a point a few old age down the route and expression at your brokerage account, you will state ...

"I did that and Iodine am proud of it!"

So, don't listen to the bad vibe discouraging people. Most of them were saying the same things when the Index was at one-half the size it is today!

The Nipponese have got used Candlestick charting for centuries.

Candlestick charting is more than popular than ever today as it adds an extra dimension to trading to give any bargainer an edge.

If you are serious about making money, then you should see candlestick-charting techniques.

History of Candlestick Charting

In the 1700's, Homma, a Nipponese bargainer in rice, noticed how the terms of rice was influenced by not only provide and demand, but also how the terms was strongly influenced by the psychological science of traders. He understood that when emotions came into drama a huge difference between the value and the terms of rice occurred.

This difference between the value and terms of any trade goods is as applicable to markets today as it was in rice centuries ago.

The re-emergence of Nipponese candle holder charting in recent old age owes much to the authorship of Steve Nison, whose book, "Japanese charting techniques," is considered the unequivocal recent work on the subject.

Advantages of candle holder charts include:

1. They can Complement other Technical Tools

You can utilize Candlestick charts with a number of other common technical indexes such as as stochastics, moving averages; Bollinger sets etc. and they can move as an further filter for trades.

2. Supply Advance Warnings of Market Reversals

Because of the manner candle holder charts are drawn, they tin give warnings of market reversals far quicker than traditional barroom charts, and are a great manner to descry overbought or oversold scenarios.

This can of course of study better market timing and underside line profits.

3. They're Easy for Everyone to Use

Because candle holder charts use, the same open, high, low and stopping point information that traditional barroom charts use, they are easy to utilize for both novitiate and experienced traders.

4. Alone Penetration into Market Momentum

The manner the candle holder chart is drawn not only gives the direction of price, but also the impulse behind the market move. This is down to the manner the candle holder chart graphically illustrates the human relationship behind the open, high, low, and stopping point by the drawing of the candle holder chart.

Just like a barroom chart, a day-to-day candle holder line incorporates the market's open, high, low and stopping point for the years trading.

However, candle holder charting adds an extra dimension in the manner that they are drawn. The candle holder have a broad part, called the "real body." This existent organic structure stands for the range between the unfastened and stopping point of that day's trading.

When filled in black, the existent organic structure intends the stopping point was lower than the open.

If the existent organic structure is empty, it intends the exact opposite: the stopping point was higher than the open. Above and below the existent organic structure are the "shadows." Chartists see these as the wicks of the candle, and it is the shadows that show the high and a low terms of that day's trading.

If the upper shadow on the filled-in organic structure is short, it bespeaks that the unfastened that twenty-four hours was closer to the high of the day. Conversely, a short upper shadow on a achromatic or unfilled organic structure bespeaks the stopping point was near the high.

5. Candlesticks Made Easy

Candlestick charting programs such as as Supercharts, Tradestation, Incredible charts and many others include candle holder charting as a criterion option, making them easy to incorporate into your trading strategy.

If you are trading with Fibonacci numbers, Dow Theory or a jailbreak method, candle holder charts can be incorporated and give an extra dimension to your trading.

Currency trading systems have got got got got go more than than popular than ever in recent years.

Here we will look at the advantages of currency trading systems and how to pick one that's right for you.

Trend Following the Key to Big Profits

As economical rhythms of roar and flop take years, so do currency tendencies that mirror the wellness of the economy.

Traders who can descry and lock into these tendencies can make significant profits.

The major currencies traded include:

US Dollar
Nipponese Yen
Euro
British People Pound

These currencies have good trends, and have high liquidness - which is indispensable when exiting markets quickly to lock in net income and more importantly, cut losses.

A Disciplined Approach to Trading Profits

Currency trading systems take the emotional constituent from trading, which is the major ground most bargainers lose.

A currency trading system have no emotions, will merchandise in a mechanical under control fashion, cutting losings and running the large profitable tendencies for upper limit long-term profitability.

Emotions - The #1 Major Reason Traders Lose

The unequivocal book on the topic was Edwin Lupus Erythematosus Feuvre's, 'Reminiscences of a Stock Operator', which was based on the trading experiences of legendary bargainer Jessie Livermore.

If you don't believe emotions will interfere with your trading then you need to read it!

Other writers to discourse trading systems and emotions include: Jake Bernstein, Larry William Carlos Williams and Jack Shwager and the latter's book "Market Wizards" is indispensable reading for any trader.

Just how effectual a system can be was proved by "The Turtles", a grouping of bargainers who had never traded before, but who all were given access to a system and went on to make billions of dollars.

Technical Analysis

The developments in terms of computing machine software and the growing of the Net have seen system trading range a wider audience than ever before.

For example, packages such as as as Tradestation and Supercharts, allow bargainers to construct and diagnostic prove their ain systems using technical indexes such as stochastics, bollinger bands, moving averages and candle holder charting patterns.

You can test these indexes in assorted combinations over historical information to see which combinations are successful. Traders who make not wish to make this able to purchase ready made packages from vendors.

Finding a Technical Trading System that Makes Big Profits

If you take to purchase a ready-made currency system, these six guidelines will assist you.

1. Understand the footing of the logic of the system. If you don't understand and believe in the logic, you will not have got the subject to follow it.

2. The system should take to catch the long-term trends; twenty-four hours trading currencies have less chance of success than long term trading.

3. Simple systems be given to work best, as they are more than robust in the human face of changing market conditions. There is no nexus in currency trading systems between complexness of systems and their success.

4. Look at the upper limit drawdown from extremum equity. This is of import in terms of money management, as you need to anticipate your biggest drawdown is ahead and perpetrate sufficient finances to cover these downturns.

5. Not all systems come up up with existent trading records; they can come with computer simulations over historical data. Don't price reduction simulations; if the footing is soundly based logic then they can still work well.

6. Finally, judge a system over old age not months. All systems can and do have got time periods of losses.

Currency trading systems give anyone the possible to make large net income in the currency markets.

How make you invest? What make you really pay? At the end of the day, what are your existent results? These are inquiries smart investors should be asking themselves (but usually don't). In this epoch of more than fees, misc. charges, holding time periods and back stop redemptions, even at price reduction brokers, how are you really making out?

Working with a new client brought this all to my attention. I cognize what I establish may not apply to everyone; however it will apply to many and very likely apply to you.

I need to foreword this by saying that, unlike the bulk of registered investing advisors, I have got built my pattern over the past 15 old age by dealing with “small” investors. Many of them are first timers because my minimum account size is only $5,000.

I targeted this grouping because I enjoy the educational portion of my business. A happy side benefit have been that by providing million dollar service to these so called “small” investors, they naturally mention me to parents, relatives, friends and business associates, often with considerably more than assets than the original client. What a happy consequence.

Having set the stage, here's what happened with my new client who we will name John. Toilet was 26, newly married with a 1 twelvemonth old son. His married woman was taking care of the kid and Toilet had a good full clip job. After merchandising his house in California and moving to Florida he had $6,000 left for starting a long-term investment program.

Though he had been reading my newssheet for about a year, Toilet decided to manage his 401k on his own. It was a solid attempt but provided less than desirable results.

He then attempted to put up a brokerage account at a major price reduction broker. With his $6,000 he was told that the quarterly fee would be $45, and, of course, if he sold any common monetary fund within the first 180 days, there would be an early salvation fee.

$45 per one-fourth would be equal to an annual fee of 3% of his starting balance. Toilet called me somewhat frustrated and said that he'd be willing to put up an account with me, but how would it do sense if inch improver he'd have got got got to pay my advisory management fee?

That was a good inquiry because it certainly doesn't do sense to have an account in any type of market environment and pay about 6% in fixed annual fees.

However, what Toilet didn't cognize was that if you have an account with a registered investing advisor who is affiliated with guardian broker, the fee construction changes.

What did that average to him? It meant that I opened the account for him as a new client. He now have no annual fees, other than my management fee, and his 180 twenty-four hours retention time period for common finances is reduced to 90 days, minimizing, if not eliminating, the likeliness of an early salvation fee.

The nett consequence was that helium would have the benefit of my experience-which he already trusted based on my path record of pulling clients out of the market in October 2000-and it would cost him no more, and likely less, than his price reduction brokerage account.

Needless to say, Toilet was very relieved. In essence, he traded broker garbage fees for professional management at no further cost to him.

And, since he itemizes his tax deductions on his tax return, all fees paid are tax deductible, which is just an added fillip to factor in into the equation.

It turned out to be an all around win-win state of affairs for John. I encourage you to reexamine your state of affairs and see if what looks like a price reduction in fees is actually costing you a premium.

With the stock market stubbornly refusing to settle down down and smooth out, Wall Street have been scrambling to come up up with "product" they can sell to gun diffident investors.

One such as new conception is the Lifestyle fund; an extremely diversified package designed to be the single monetary monetary fund in an investor's portfolio.

There are two general types of these funds, in which assets are distribute out across a broad range of pillory and bonds. In one, securities are held directly, in the other, assets are held through other funds.

Fidelity’s Freedom 2030 is an illustration of the first type. It targets a specific retirement date, and the cash and chemical bond bet rise as that day of the month approaches.

This type of monetary fund have created a perceptual experience among investors that its value will not drop and that it is safe. But, in fact, these are no safer than a criterion common fund.

Since we sold all of our investing places on October 13, 2000 and preserved our capital, Fidelity Freedom 2030 have lost 39% (through 2/21/03). Bash you believe that’s Associate in Nursing scattered incident?

I’m not picking on Fidelity, but here are some of their other Lifestyle finances with tax returns over the same period:

Fidelity Freedom 2020: -34% Fidelity Freedom 2010: -22%

So much for perceived safety.

The other Wall Street bright thought is the monetary fund of finances (FOF). It sounds good, but it actually makes a dual layer of costs; the cost of buying the monetary fund itself, and then the disbursals of the common finances the FOF purchases. Take for example, the Enterprise Group of Funds. It demoes an disbursal ratio of almost 2% plus a sales charge of 4.75% according to Morningstar. Tack on the implicit in disbursals and you’re paying out more than than 3% A twelvemonth in investing expenses.

If you’re A new investor (with less than $10k), and have got your account at a price reduction broker, you can add a minimum of 1% per twelvemonth in fees just for the privilege of having an account. That conveys the sum up to 4% inch annual expenses. Talk about adding abuse to injury.

FOFs are sometimes being touted as the lone monetary fund you need no matter what the investing climate. So, let’s compare to see how the Enterprise monetary monetary fund of finances performed during the same time period as mentioned above for the Freedom funds:

Enterprise Group of Funds: -35%.

The underside line is that no matter what type of common fund you choose, or what anybody claims it will make for you, you must be vigilant and see if it makes what you were told it would. In investing, there is simply no such as thing as a certain thing. Sure you need to cognize how to acknowledge a good investment.

But just as important—maybe even more than important—you must cognize when to acknowledge that a good investing thought didn't work out, cut your loss, and sell.

The date October 13, 2000 will forever be embedded in my mind. It was the day after our mutual fund trend tracking indicator had broken its long-term trend line and I sold 100% of my clients’ invested positions (and my own) and moved the proceeds to the safety of money market accounts. Some people thought we were nuts, but I had come to trust the numbers.

The shake out in the stock market, which started in April 2000, had all major indexes coming off their highs, violently followed by just as strong rally attempts. The roller coaster ride was so extreme that even usually slow moving mutual funds behaved as erratically as tech stocks.

By October, the markets had settled into a definable downtrend, at least according to my indicators. We sat safely on the sidelines and watched the unfolding of what is now considered to be one of the worst bear markets in history.

By April 2001 the markets really had taken a dive, but Wall Street analysts, brokers and the financial press continued to harp on the great buying opportunity this presented. Buying on dips, dollar cost averaging and “V” type recovery were continuously hyped to the unsuspecting public.

By the end of the year, and after the tragic events of 911, the markets were even lower and people began to wake up to the fact that the investing rules of the ‘90s were no longer applicable. Stories of investors having lost in excess of 50% of their portfolio value were the norm.

Why bring this up now? To illustrate the point that I have continuously propounded throughout the 90s; that a methodical, objective approach with clearly defined Buy and Sell signals is a “must” for any investor.

To say it more bluntly: If you buy an investment and you don’t have a clear strategy for taking profits if it goes your way, or taking a small loss if it goes against you, you are not investing; you are merely gambling.

The last 2-1/2 years clearly illustrate that it is as important to be out of the market during bad times, as it is to be in the market during good times. Want proof?

According to InvesTech’s monthly newsletter it turns out that, measuring from 1928 to 2002, if you started with $10 and you followed the famous buy-and-hold strategy, that $10 would become $10,957.

If you somehow missed the best 30 months, your $10 would only be $154. However, if you managed to miss the 30 worst months, your $10 would be $1,317,803! Thus, my point: Missing the worst periods has profound impact on long-run compounding. There are times when you end up better off by being out of the market.

Interestingly enough, if you missed the 30 best months and the 30 worst months, your $10 would still be worth $18,558, which is 80% higher than the buy-and-hold strategy. This all comes about because stock prices generally go down faster than they go up.

Wall Street and most people tend to overlook the value of minimizing loss, and that is exactly why the bear demolished more than 50% of many peoples' portfolios while I and those who trusted my advice escaped the worst of the beast's rampage.

Disgruntled investors are going after Wall Street once again, this clip accusing one of investing bank Morgan-Stanley's high-tech common finances of making biased stock picks.

Recent lawsuits allege the Morgan Stanley Technology monetary monetary monetary fund was influenced to purchase and throw pillory of companies that delivered huge investing banking fees - or could potentially convey large business - to the investing bank.

According to the lawsuits, the Morgan Stanley fund followed the biased recommendations of the firm's analysts - determinations that have got cost shareholders billions of dollars since the portfolio's October 2000 inception.

The fund lost 48 percent in 2001 and was down another 50 percent during the first nine calendar months of 2002. While Morgan Stanley strongly denied the allegations, I neglect to see how the management of the monetary fund is somehow distinct from the other divisions of Morgan Stanley. Ultimately, they all work for the same boss.

The lawsuits additional claim that the technical school monetary fund failed to let on that the firm had investing banking neckties with a number of companies whose pillory were portion of the portfolio. They also failed to uncover that those golf course could impact the fund's bargain or sell calls.

Why convey all this up? For one thing, it is interesting to observe that Morgan Stanley offered four of these types of finances in October 2000. Just around the clip when we sold all of our places (Oct. 13, 2000) and it became clear, at least to those of us who were tracking long-term trends, that a major tendency change had taken place.

More recently in the intelligence it's been Merrill Lynch who had a questionable deal involving transactions with failing energy bargainer Enron. Of course, the financial services industry modulates itself so well, that an $80 million payment to the second is sufficient to wrap up up this lawsuit without admitting or denying wrongdoing.

What's the moral of this story? While it is impossible to foretell these alleged struggle of interest schemes, it is definitely possible to follow a under control attack and be on the “right” side of the market so you can avoid jumping aboard a sinking ship.

“You tin be poor when you’re young, but you can’t be poor when you’re old.” That was the tag line used some old age ago in a financial services telecasting commercial.

Truer words were never spoken.

I was relatively poor when I was young. Just about everybody I knew was and it was sort of fun. We lived an almost group lifestyle, sharing money, accommodation, food, beer, cigarets and other necessities of post-pubescent life. Would it be as much merriment if I had to make it again today? Could I make it again? Not on your life!

Now I’m anything but a financial genius but there are five basic rules that I’ve learned and used to secure our financial future. And while far from wealthy, I have got got every assurance that I will not have to dwell in a refrigerator box whenever I discontinue working and that my married woman will be able to comfortably carry on in the event of my premature demise. (You should cognize I’m astatine an age where I believe eighty-five is a premature death!)

Is edifice a secure financial hereafter kindred to rocket surgery? Absolutely not— you need to make five key things to get started:

1. Determine your short and long-term financial goals. Start by taking a comprehensive snapshot of your current situation—your assets, nett income, debts and life expenses. Once you’ve done this you can begin setting long and short-term financial goals. Decide what lifestyle you desire to enjoy between now and when you retire; what retirement lifestyle make you anticipate to have got and what kind of instruction make you anticipate to supply for your children.

2. After you've assessed where you are now and where you desire to be in the hereafter take stairway to protect your ability to get there--and remain there once you’ve arrived. A major portion of your family’s financial programme is to see against major financial loss. There are simply no warrants against serious illness, accidents or untimely death. So return the stairway necessary to see against loss of life, loss of income and loss of physical assets.

3. Wage yourself first. Save at least 10% of pre-tax income – more than if possible. Wage down your mortgage as quickly as possible, especially in modern times of low interest. In the short term, you'll be better off reducing a mortgage that costs you 6% than earning around a taxable 1.5% (or less) in a nest egg account.

Maximize your RSP/401K part every twelvemonth and do the part at the beginning rather than at the end of the year. Simply doing that volition substantially increase the size of your retirement nest egg when you’re ready to cash out.

4. Avoid credit traps. If you utilize credit cards, always pay any money owing before interest is due. See paying off your credit card immediately if you have got money in a nest egg account—as with the mortgage, the interest earned on the nest egg is certain to be lower than what’s charged by the credit card company. Avoid using credit cards for cash advances. Usually the interest charges are higher for these and the charges get immediately. If you make carry a balance on your cards seek to negociate a lower rate with the credit card company. If you need money urgently, it's usually cheaper to negociate a personal loan with your bank or credit union.

5. Finally, protect your household in the event of your death. Brand a Will. If you decease without leaving a Volition in all likeliness the lone thing you’ll really go forth your loved 1s is a bloody mess—one that could take many old age and a whole clump of money to screen out.

Without a Will, the court/government volition make up one's mind how your property and ownerships will be divided. I would anticipate there are two opportunities of them acting in a manner consistent with what your wishings might have got been—slim and none!

Making a Volition doesn't intend the Grim Harvester is about to pay you a visit. It simply intends that your personal business will be sorted out in the ways you desire and, as a result, you can travel about your life with a peaceful head because your loved 1s are protected.

These five rules are only a starting point—a few suggestions that any financial management professional person can better and spread out on. If I have got one sorrow about how I’ve handled my financial personal business over clip it is not enlisting adequate professional help. When we were starting, the financial management business was neither as large nor as sophisticated as it is today. Who knows, with better help, I might be authorship this from some warm Caribbean tax oasis rather A cold Calgary office!

“Don’t attempt this alone—use a trained professional,” is absolutely the best advice I’m really qualified to give.

Have you ever been struck from behind while you were in your car? It usually happens at a stoplight or stopsign. Everything is nice and peaceful and BANG you get a terrible whack. Totally unexpected. Some damage to the car and maybe to you.

It might be a day or so later as headaches
start, dizzy spells and vomiting. Yuk! Best
thing is to be off to your chiropractor to have
bones reset.

This is somewhat like the stock market and
your portfolio. You are going along comfortably
relaxed and suddenly the market hits you from
behind. Totally unexpected. There is damage to
your portfolio and maybe to your peace of mind.
Could be headaches and vomiting depending on how
serious is the crash.

It's off to your broker or financial planner
to get things fixed. After you get there you are
shocked to find out he has no idea how to get
your money back. Yuk! He is supposed to be an
expert and this should not have happened in the
first place. You are about find out that brokers
and financial planners have been taught their
trade by the big Wall Street brokerage houses.
Their goal is not to make you rich but to get
rich off you. Can this be true? You betcha. You
will learn that advice from a broker is a eulogy
for your money.

It is not that your broker or financial planner
is dishonest. It is that he doesn’t know that he
doesn’t know. The methodology of Wall Street is
to get your money and keep it. Buy and never
sell. Brokers are not taught that cash is a
position. Think back. How much more money would
you have today if you had been in cash from 2000
to 2003? There are times when Buy And Hold is a
good idea, but there are also times when you
should be in a money market.

Your chiropractor will make an adjustment
to your neck and back and you will get off the
table feeling better. Your broker will suggest
adjusting your portfolio by selling certain
equities and buying others. The chiropractor may
ask that you have additional adjustments.
Unfortunately, unless you have a very large
account brokers forget their clients until you
are faced with another headache and call him to
make further “adjustment”. It doesn’t help
unless he is aware of the general direction of
the market – up or down. Down he doesn’t
understand and has not been schooled how to
protect your money.

The standard Wall Street medications of Buy
and Hold, Diversification, Do Research, Dollar Cost
Average and You Can’t Afford to be Out of the
Market are a few of the poison pills prescribed
to investors every day. There are more standard
WS tablets and they will all make your portfolio
smaller over a period of time.

If you have either of these types of whiplash
you will need to find someone who knows the cure.

STEP 4: The Business Setup - Choosing the Right Partner

With advancement in technology, the options trading business can be easily setup with a few clicks of the mouse. Welcome to the online world of trading.

Equity trading is a serious business because it involves a lot of money – your money. It can build wealth and can also destroy wealth. Either you make money from the market, which belongs to someone else, or you lose your money to the market, which will benefits another trader. So please take it seriously because most traders and investors do not. So if you are serious, would you trust your business dealings to just about anybody? I hope not!

A business that does not have reliable partners typically will not succeed for the long term unless a new reliable partner is quickly identified. In the options trading business, brokers are our partners. As such, we would have to identify and be very selective in appointing the brokerage house to help us run this business.

With so many brokerage firms out there, it can be quite a tough and confusing for many of us. In fact, choosing the wrong broker can be expensive.

So we have prepared an easy way to shortlist these brokers. A good “business partner” should have:

Attractive commission rates – understand if it is fixed or if it depends on the number of trades. Low commission does not mean it is good.

High availability on their website – since almost all transactions are executed online. Understand contingency as well when website is down.

Fast Execution – a good opportunity may be gone if not executed fast.

After Hours Trading – if you like trading longer hours.

Sweep Facility – a good broker would automatically take your available cash to have it placed in a money market to generate interest.

No hidden fees – many brokers have all sorts of endless hidden charges. Do not take this nonsense.

Powerful trading Tools – like streaming real time quotes, screeners, stock charts, etc.

Wireless trading facility – most of the time for day traders

Ability to execute complex options trades – many brokers provide options trading but this is not good enough!

A good stock broker may not be a good options broker because options trading are relatively new. Although stock brokerage firms offer options trading, they are still behind in many of the services offered by brokerage firms that specializes in options trading. Once you understand options trading, which has more than 20 different trading strategies, stock trading looks like child’s play.

When selecting a brokerage firm, select the best to prevent any heartbreak later on. We have worked with several options brokers and, in our opinion, www.optionsexpress.com and www.thinkorswim.com are the best around. These two options trading firms meet the requirements above while many have failed to impress. Before proceeding to the next step, start working with the right partner. It only takes a short while to open a new account. This is an important decision.

Stay tuned for STEP 5 – Arm Yourself With Options Trading Knowledge

Copyright 2005 William Tan