How To Find A Winning Stockbroker
The stock market can be a scary place…
But if you have the right person in your corner, pulling consistent profits from the market can be easier than you ever thought possible.
You see, a standard stockbroker will act as the middle man for you and the Johannesburg Stock Exchange
But a good stockbroker will do so much more!
They’ll provide advice on the trades you want to place, competitive fees, value added services, trade ideas and much much more.
That’s why picking your stockbroker could mean the difference between a cushy retirement and scraping the ‘old age’ barrel.
So how do you find a stockbroker, let alone a good one?
More yet, how do you find the right stockbroker for you?
Read on and I’ll show you how to pick a winning stockbroker…
How You Can Gain An Advantage Over The Market
Step #1: Decide What You Want To Trade
Before you decide to open an account you need to choose the instruments you want to trade or invest in.
Do you want to tap into the Forex market, or would you prefer to trade CFDs?
Are you going to trade the JSE Top 40, or would you prefer international Indices?
You need to ensure the broker you're looking at offers exactly what you'd ideally want to trade, and what you could potentially trade down the line as well.
So, if you'd like to trade commodities with the idea that you also want to start trading CFDs down the line, then make sure the broker you're interested in can accomodate these as well.
Step #2: Figure Out How Much You Want To Trade
Different brokers deal with different types of clients.
Certain companies only really deal with traders or investors that have big amounts of money (despite what they tell you), whilst others deal with individuals looking to invest or trade smaller amounts.
Make sure the broker you have your eye on is willing to accommodate you and the amount of money you have to invest or trade.
Step #3: Plan Your Method of Attack
Are you going to maximize your stockbroker relationship, or are you purely going to trade online yourself – You need to choose or decide.
Are you looking for the convenience of picking up the phone and speaking to your stockbroker directly, or would you prefer to trade or just do it online?
The difference between being a profitable trader and a losing one could depend on exactly that.
You need to decide how you want to trade with your stockbroker.
Ideally you want to find a broker that offers you both.
That way if you run into any trouble, or hit any snags, you at least have the option of being able to get your broker on the phone.
Step #4: Find Out What The Broker Charges
Before any costs come into the equation you need to calculate how often you plan to put on any trades.
You can then find the best fit for your trading needs.
Don’t forget to include all the fees that could impact each trade; management and admins fees, what you have to fork over when you sell your shares etc.
And just remember, cheaper isn’t always better!
Better rates don’t always mean a better quality of service, so you really need to weigh up what you get from your brokerage.
Where To Find The Real Stockbroker Advantage
There's so much to choose from out there it can be intimidating to even start.
That's why you need to follow this process to find a winning stockbroker.
Remember, you need to:
- Decide what you want to trade
- Figure out how much you want to trade
- Plan your method of attack
- Find out what the broker charges
As I've mentioned though, there really are tons of brokers out there!
So what do you do when you follow these four steps and uncover a bunch of brokers - How do you know who the best one is?
You can’t exactly try every single one until you figure out which you liked the most.
Thankfully The Financial Mail and Intellidex have done all the research for you, so you don’t have to.
You can find out a little more on their research and a list of the best brokers ranked according to the services they offer here.
Often these brokers offer you a free trial so you can put their platform to the test.
This is a great way to figure out what tools you’ll get to use when signing up with the broker.
As I've already mentioned, costs can be crucial when you trade.
Click here to get a breakdown of the costs for online brokerage charges in South Africa.
Alternatively you can have a peek at the Johannesburg Stock Exchanges broker page here.
With everything I've shown you above, picking a winning stock broker is as easy as 1-2-3 (and 4).
Until then, here’s to profitable trading.
Analyst, Total Trader
The Money Lab
PS: If you’re after a real advantage in the market, look no further than Vunani Private Clients!
We've consistently placed in the top spots at the SA’s Top Stockbroker Awards and recently took home the top prize for South Africa's best CFD provider!
We offer you a formidable research team with a superior track record, and when you join you’ll also receive in-depth market research, stock recommendations, trade ideas, and much more.
For more on how to get us in your corner today, and how you can gain an advantage over the market, just enter your details below.