Premium
- New York
- London
- Barcelona
- Tokyo
- Sydney
Search
0
0
Finding a Broker
Wed, Jun 28 2006, 11:44 GMT
by Joe Ross
Finding a Broker
“Hey Joe! I need help finding a broker. I notice that discount commission rates are pretty much the same. So how do I choose?”
Commission is definitely not the most important factor in choosing a broker. Most important in choosing a brokerage firm is the per trade slippage, the difference between the stop order price and execution price.
Based o a study I saw some years back, ten orders were placed with five commission houses. All orders were priced in the same market at the same price, before the market opened. The difference in slippage from worst to best was over $800. Slippage one year for Rosenthal-Collins trading one and two contracts of the S&P, was over $20,000 per account. The floor broker for the majority of those trades was Mario De Bartolo. All the fills were supposedly legal. One order for 15 contracts was to sell at 45. The market took over two minutes to fall in one-tick increments to even money, at 00, before an up tick. All 15 contracts were unbelievably filled at 00. Slippage on the order was $3,375. A week later another order was slipped over $2,000, then all accounts were closed. Coffee once had the daily high and low in the opening range. I was filled on my buy stop and sell stop at the high and low of the day, 360 points times three. Legalized theft. The broker could have taken both sides of the orders. New York markets are notorious for their slippage, as is the Chicago pork belly market.
Any broker who allows this kind of slippage to occur on his customer’s orders is not worth having as a broker. There are brokerage firms that carefully monitor the kinds of fills their customers are getting from the floor. If the fills are bad, they will dump the bad floor broker and use another. Bad floor brokers can be penalized that way. They lose the business. A good broker will do battle for his/her customers. That’s why we use the broker we are currently using. If you want a referral, let me know. I’ll be happy to give it.
Published on Wed, Jun 28 2006, 11:40 GMT
Trading Educators Inc.
| 1509 Jackson Drive, Cedar Park, Texas 78613
http://www.tradingeducators.com | info@tradingeducators.com
Legal disclaimer and risk disclosure
The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in commodity trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains. Past results are not indicative of future results. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight.Interested in forex trading? forex brokerage firms!
FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)
[Read Premium full description]
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management.
Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
©2008 "FXstreet.com. The Forex Market" All Rights Reserved.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management.
Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
©2008 "FXstreet.com. The Forex Market" All Rights Reserved.