Do You Really Need A Broker To Trade?

 


Visitors: 199

Is a broker really necessary to trade in the stock market? Years ago, the perception was that only grey haired men in pin stripped suits traded stocks in the stock market. The average person did not know any thing about the market, it was shrouded in mystery. Most people did not know what a Hedge Fund was, or for that matter understood anything at all about options or futures.

This has all changed in the computer age. But even so, just a few years ago, the average person trading in the stock market was limited to calling his broker and executing a trade. Most people relied on the broker to give them advice about buying and selling.

With the advent of online trading, the broker’s position has changed. He is no longer giving advice as to what to buy and sell, but is only processing the orders of his clients. With the deep discount brokers, there is very little contact between the trader and a live person at the brokerage. Now, the average person can remove the middleman from the equation, and as a result, have lower trading costs.

Getting involved in the market can be fun and rewarding. It can also be painful and costly. Each person trading the market needs to perform his due diligence and understand the market he is trading in.

There are both pros and cons to trading without a broker. The biggest con is not having the expert advice about a particular investment. Now, the individual investor has to research the stock on his own. Of course, this is offset by the fact that some brokers were nothing more than market churners, they recommended the hot stock of the day, sometimes just to drive the price on a thinly traded share, leaving the investor holding the bag.

There are many pros to trading without a broker. The biggest would have to be cost, it can cost as much as ten times more to use a full service broker compared to a deep discount broker. Also, you do not need a huge bankroll to get started; you can open an account for $500 with some firms. The low fees, along with small initial investments allow even the smallest investor to start trading online.

It is really easy to trade online. Most firms have a simple computer program to allow fast trading. Some firms will even allow naked selling of options. Of course, this is only allowed for the more experienced investor with the larger account.

Eliminating the broker opens up a lot of freedom for the investor and puts all of the control in his hands. The downside, there is no one to blame bad investments on other than yourself.

Trading in the stock market without a broker can be a lot of fun. It doesn’t matter if you are day trading or taking a long term holding approach, learning the ins and outs of trading the market without a broker can be exciting and rewarding. Online trading is a trend that is sure to continue.

If you would like additional trading information, please go to Trade The Stock Market or to my Forex Review Site .

(553)

Article Source:


 
Rate this Article: 
 
Forex Broker Reviews - What Are the Most Important Factors to Examine When ..
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Online Broker Trade History Not Doing the Job

by: David Eich (June 29, 2005) 
(Finance/Stocks Mutual Funds)

How to choose a forex broker to trade with Renko charts

by: Nir Samash (August 09, 2015) 
(Finance/Currency Trading)

Discover & Exploit The Cracks As An International Trade Broker While ..

by: J Mercado (December 17, 2005) 
(Business)

AvaFX - Using The Best Forex Broker To Trade Forex

by: Vernon Lees (September 14, 2010) 
(Finance/Currency Trading)

ES Emini Day Trading: Full Service Broker or Deep Discount Internet Broker

by: D. Stephen Adams (December 15, 2009) 
(Investing/Day Trading)

Broker Banks: Does Your Mortgage Broker Have a Dirty Little Secret

by: Louie Latour (January 04, 2007) 
(Real Estate)

Commodity Broker: What You Need to Know to Select the Right Broker for You

by: Merv Thompson (September 25, 2005) 
(Investing)

Five Quick Tips To Find A Stock Broker Company Or Internet Stock Broker To Help .

by: Matthew Mc Dermott (August 29, 2007) 
(Finance/Stocks Mutual Funds)

Refinance Mortgage Broker: Yield Spread Premium? How to Avoid Overpaying Your ..

by: Louie Latour (October 27, 2006) 
(Real Estate)

Forex Broker Reviews - What Are the Most Important Factors to Examine When ..

by: William Alheim Jr (September 27, 2008) 
(Finance/Currency Trading)