When speaking with prospective clients, the first question they usually ask is “what’s the cost?” Rather than asking what services or resources I can provide, they are simply concerned about the price. The trouble with this perspective is that the “shopper” wants to know the price of the product or service before realizing what the product is or what service can be provided. Superficially shopping for a broker will likely breed hollow, superficial results.
Perhaps we are conditioned to shop superficially for services. We go online or look through a store at products only to act when and if something catches our eye. Personally, when shopping for a shirt, I don’t even check the price unless I like the shirt. The same can be said when interviewing a commodities broker. Why would you consider the commission first if the broker doesn’t provide the services that you need or the resources that you require? Regardless, price seems to be the only concern for some prospective clients. How can one focus on their needs if the only thing on their mind is price? To take this a step further, would you ask a lawyer about his fee before ensuring his area of expertise?
When trading futures and options, most traders believe that all they need is access to the markets. They fail to see that trading is much more than simply buying or selling. This may be a key factor as to why many traders are not profitable. Many traders feel that the only resource they need is a sturdy computer and a portal to the exchange. Items such as cutting edge software, expert advice, and investment grade research take a backseat to how cheap one can place a trade. Trading is challenging enough, so why is it that many investors and traders handicap themselves by not taking advantage of all the resources available? As a trader, you are placing thousands of dollars at risk (minimally) for every trade you make. Shouldn’t value take the place of price?
Trading commodity futures and options can be extremely complicated. Even seasoned veterans find the markets challenging. Not only does a trader need to predict where the market is headed, he needs to properly manage risk and find the best strategy to do so. Additionally, a trader needs to properly execute orders and ensure the trade is placed at key levels with confidence. With so many irons in the fire, this is a lot for any trader to manage. Finding a broker that can help you accomplish your goals and work for your best interest can make all the difference.
Maybe clients are conditioned to “superficially shop” for a futures broker because they don’t feel that their needs will be met or that they will be heard. Before choosing a broker, a prospective client should make sure that they’ve been heard and that the broker has a good feel of their individual needs. Let the broker know what your expectations are. Don’t think that you have expectations? This only means that you haven’t fully examined your needs.
Your commodities broker should be a valuable resource for your trading needs. While your broker cannot control the markets or your account value, he can definitely ensure that your needs are met and put you in the best position to take advantage of the markets. Only after you’ve established that your broker meets your demands and the service meets your expectations should you discuss a reasonable rate of commission. After all, not all brokers are equal.
How to Make Your First Futures Trade
Are you interested in trading futures but unsure of how to start? With the help of this informative guide, you will receive step-by-step instructions to turn your interest into action!