Discount brokers are a good option for you if you do your own research and make your own investing decisions. These brokers can explain the difference between stop limits, stop losses, and other such terms but will not advise on market trends. Discount brokers are cheaper than full-service brokers because you are not taking up your time asking for advice and they are only responsible for the transactions that surround buying and selling.
All discount brokers compete with each other based on fees. It is probably the most important consideration when evaluating which broker to use. Advertised fees are often not the whole story. Check for account maintenance fees, extra charges for stop loss orders, and fees charged because of inactivity within your account. Hidden fees can often add up to more than you expect.
You will most likely find a large difference in open balance requirements between brokers. Most applications for new accounts require a cheque to be forwarded before the account can be opened. The less the better for you, but most brokers prefer larger deposits because this adds to their own company valuations.
Telephone Support 24/7
Because you will be trading from a computer platform with a software program, you will at some time need customer support. Your discount broker may have provided you with the software trading platform. When this stops working you will need to ring them. You will need to ring, not only to get it fixed but to also cancel or continue trading. Before you decide on a broker, test the customer hotline for both trading and support issues. See how long it takes and how easy it is to get through. This could save you money in the longer term.
Because the discount brokerage business is highly competitive, check to see who is offering the best incentives to join. Sometimes you will find free reports, free trades based on the frequency of trading, and many more incentives. If any of these incentives suit your style of trading then give them consideration.
Check to see that your funds are protected in the event of a meltdown within the brokerage firm. With financial institutions under increasing pressure on their bottom line, it is not implausible to see firms folding and investor funds disappearing with them.