To become the trader and to earn on changes of the prices on financial markets is quite good idea. Transactions with securities on the American stock market, as well as on other financial markets, have made rich set of the people seriously concerning this hard, highly risky business. In the market it is impossible to become successful without ability to make various decisions very attentively, without observance of rules of risk-management.
Before to choose the broker and to open an account, it is necessary for you:
1. To advance financial problems facing to you, to designate specific goals. What kind of brokerage services is necessary to you – complete service or discount service? Will you use on-line operations through the Internet broker or through the direct access terminal?
2. To visit offices of the several firms offering given services on financial markets, to talk over with staff, to try to evaluate their experience and qualification. You should draw corresponding conclusions.
3. To find out disciplinary history of the offered you brokerage offices and their commercial representative. It is necessary to specify, if the brokerage office is member of SIPC (Securities Investor Protection Corporation).
4. To find out a scale of commissions and to specify, what expenses you will have at opening, maintenance and closing of account. Payment by a broker-dealer of work of the commercial representative and its employees depends on the sum of borrowed funds and from quantity of transaction of clients. The more the commercial representative can offer these sizes, the bigger discount to you.
Attentively study documents on opening of an account. Understand with all terms and conditions. Do not rely on oral statements of the commercial representative. Negligence can affect your legitimate rights. The agreement on opening an account provides acceptance by you of some critical decisions:
- Who will control the account (to make decisions on opening and closing of items)?
- What kind of the account do you open: cash account or margin account?
- Do you understand a level of risk from acceptance of those or other investment decisions?
At opening of an account the brokerage office can ask to sign up the separate document or the agreement (it can be the constituent of other document) about ways of the decision of possible conflicts between you and firm. Federal statutes about securities do not require that you signed up such agreement. The decision to address to law courts at infringement of your rights belongs to you at any time.
Agreement signing means that you concede the right to sue your firm or its representative at the court. Investments always are connected with risk. You have a choice: the right to register securities on yourself or on a brokerage office. If you plan to trade regularly in securities the second variant is more preferable (facilitates realization of accounts).
Nobody invests the capital to lose the money. Investments are always risky. It is necessary to understand accurately:
- The higher anticipated profit, the more risk.
- Some investments cannot be transformed easily and fast into cash without certain losses.
- Investment in securities of the new companies has the increased risk.
- Investment in securities, including mutual funds, is not insured against falling of their commercial value.
Think properly before you will make the final choice of the broker.
Before you decide to make a forex investment or start forex trading yourself, better find a nice forex book and read more about foreign currency trading market – this will save you from tons of troubles and traps.