Trading and investing are art and skills; the more practice you do, the sharper it will be. If it can be used correctly, it will provide you with the highest returns and profit other than any method. And on the other hand, if anyone thinks it a game of kids, it can also destroy.
If you are thinking of entering the world of the stock market, then the first thing you will need after opening a DEMAT account is a good broker who can fulfil all your requirements. Choosing a broker is as essential as picking the right stock. Before deciding to choose a broker, the first question that you need to ask yourself is that are you a trader or investor or both?
Things to Avoid While Choosing a Broker
While choosing a broker, everyone suggests some tips to follow. But no one tells what mistake one should avoid. So, before starting the guide to select a broker first, we will learn about the mistakes that everyone should avoid while choosing a broker.
- Do not get attracted by the ad campaigns. You cannot identify if a broker is legit or not by an advertisement.
- You must have received some referrals to join XYZ broker from your family and friends. Do not get influenced by their performance with that particular broker. Because every investor and trader has different needs, and every broker can't fulfil all the requirements of every type of broker.
- Remember the call you received from a brokerage firm. Don't get fooled by such phone calls and texts. First, verify all the data and numbers and then step ahead.
- The broker who promises you risk less trading, don't go for it. It's a trap. Trading is never riskless.
- Do not ignore the review given by previous customers who have used the services.
Things to Keep in Mind While Choosing a Broker
Brokers are of two types: regular broker and broker resellers. The broker who deals with its clients directly is known as a regular broker. And a broker who works as an intermediate between client and larger broker is known as a broker reseller.
- Identify your Requirements Before clicking on any broker ad or registering yourself, take a step back and think about your needs. What are your needs? What kind of investor or trader are you? What is your budget? How much can you invest? And many more questions like this, which you need to ask yourself. When you identify the answer to these questions, then you are good to go in search of a broker.
If you are just starting, then your priorities should be a demo account with virtual money, quick resolution of your problems, quality educational material etc.
- Fee and Costs Every broker charges a different fee. So, you need to have a crystal clear idea about how much fees you can pay a particular broker according to your budget. There are tons of fees and charges for different services such as account opening charges, brokerage charges, trading commission, Annual maintenance charges, inactivity charges, initial deposit, minimum balance charges and many other hidden charges hidden at the time of account opening.
So, it is good to know about all these charges before opening an account. After the account opening process, you will have no choice except to pay those charges.
- Customer Support Good customer support is essential to resolve all your concerns, not only related to administration but every type of issue. Because when you join a broker, you have no one to contact when you feel any difficulty except the customer support team. That is why customer services should include some characteristics such as
- Multi-Language support.
- Easily available when required.
- Multiple channel availability like call, chat, email, social media etc.
- Lowest turnaround time.
- Complete resolution.
- Structured escalation process in non-resolution cases
- Reputation and History The market history and reputation of the broker tells a lot about it. It is necessary to know if the broker is a legitimate, regulated brokerage firm or a fraud. Check broker history, how it has evolved during this time, number of active clients, daily turnover value and the financial segments. If you hear any rumour about any broker, then do not forget there is no smoke without fire. So if you are thinking to opt for that broker, just take a step back and think again.
- Funds Transfer Process The most important purpose of trading is to make a profit, and if you are unable to take that profit into your bank account, then there is no use of that brokerage firm. That's why it is essential to select a broker with whom you do not feel any difficulty in withdrawing your funds, which accepts most of the trending bank transfer methods and completes the process in minimum working days.
- Testing the Broker With the advancement of technology, trading platforms are also evolving. Many trading platforms are coming up with unique and attractive features. But apart from these fancy features, there are some must-have features that a trading platform should have, i.e.:
- Real-time feeds
- Speed and performance of the software
- Interactive charting
- Authentic order placements
- Secure trading environment
- Good educational material
- Technical indicators
- A broad range of financial assets
- Easy deposits and withdrawals
It is easy to get attracted to attractive ad campaigns run by brokers. But successful trading requires a robust strategy and attention to detail. Before diving into the world of trading, it is necessary to choose a broker wisely. Find out which features of a broker matters to you most. Selecting the right brokerage firm will lead you to build a strong financial future for yourself. One more thing to remember is to select a broker look at the other factors instead of brokerage because there is not much difference in brokerage.