As a first-time investor, there are several aspects of trading you would need to consider and be aware of that it would be cumbersome to do it all by yourself. Choosing a reliable broker would be the best solution. How you would accomplish that, you may ask. Well, selecting the ideal broker is quite different for experienced investors and for new investors. You must contemplate quite a few things carefully.
Understand The Type Of Brokers
Before you select your broker, understand that there are 2 types of brokers- Regular brokers who deal directly with their clients and others who act as intermediaries between clients and large brokers.
There are also full service and discount brokers. The full-service brokers offer best trading platform in India among many other services like forex analysis and reports, forex and CFD markets trading, share and ETF markets, futures and options markets and much more. The broker takes much of the responsibilities and provides the investor with customized solutions and advice based on expert research for better returns. Full-service brokers like Perfect Capital Markets are much more preferred and valued for new investors.
While some may believe it is better to hire the services of some discount broker when beginning investments, it is generally not recommended. Full-service brokers like PCM provide the best trading platforms in India along with many facilities and expert advisors. Besides it always wise to have the right guidance when one is inexperienced in the field.
The trade execution fees and other brokerage fees are few things you would like to consider to ensure that you make the most of your investment. As a young investor, you may be limited by your budget. Brokers like PCM provide some of the best trading accounts that allow a learner to make a beginning by investing just about $100 as against $500 to $1,000 with most online brokers. Also, find out about the interest that your broker charges when you make a trade on margin. Understand everything there is to know about withdrawals from your prospective broker. Some charge a fee to make a withdrawal while others make it mandatory to maintain a minimum balance to make a withdrawal.
Be wary of hidden costs within complicated fee structures. Some brokers may provide the best trading platforms in India but charge with a complex fee structure that takes the fun out of your earning potential. Read the fine print carefully always.
Understand The Type Of Investor You Are.
Choosing a broker that complements your investment style is essential. For that, you must first understand your own investment style.
Are you a trader?
If you are the type who prefers to trade for quick and small gains based on short-term price volatility you would be a trader. A broker with very low execution fees would be suitable for you since high trading fees could prove to be unhealthy for your investment. Also, trading short-term requires experience, without which a new investor would face the heat.
The Buy And Hold Investor.
The buy and hold type of investor is one who prefers to hold on to his stocks for a longer duration and watch them grow. They have the patience to allow the value of their shares appreciate over a long term period and reap the benefits later. If you believe you agree with this style of investment it is better to choose the best broker for online trading in India. Also, a higher commission should not be a concern
A clear decision between the two is rarely the case with most investors as they find themselves somewhere between an active trader and a long term investor. In such case, you will have to consider other factors as well when making your decision. Just as some brokerage firms facilitate minors to invest at a young age with the help of custodial accounts and fee structures that are age appropriate to encourage young people to invest.
Before choosing your broker, outline your requirements as an investor and as a customer. While your first broker need not be your broker for life, it is essential to make the right start. Therefore consider all the above points before choosing your first broker.
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