When it comes to trading futures efficiently, securing market access through a strong broker is the all-important first step. In truth, the online atmosphere presents a vast array of futures brokers in competition for your business ― which can make choosing the right one seem like an exhausting task.
Nonetheless, by focusing on a few key intangibles, the job becomes easier. Here are five elements that separate the elite futures brokers from the rest of the pack.
#1 Competency
“It is easier to do a job right than to explain why you didn’t.” ― Martin Van Buren
In order to complete any job successfully, a person must have the tools and skills to be competent at his or her trade. Accordingly, the job of a futures broker is to facilitate the trading activities of the client.
In the contemporary marketplace, being a competent broker requires a robust technological infrastructure, superior order routing, and low-latency exchange connectivity. If these inputs are lacking, then a brokerage service is not equipped to compete in today’s digital markets.
#2 Experience
“Nothing ever becomes real until it is experienced.” ― John Keats
Keats’ quote may never be more relevant than it is to active trading. Engaging the markets is a truly unique endeavor, one that is filled with countless pitfalls and tremendous rewards. The best futures brokers understand this because they have put in the time to become mature in practicing their craft.
While a little training and some startup capital can get a broker up and running, there are many nuances involved in futures. Having ample experience to draw from is a key part of weathering storms, capitalizing on opportunities, and helping clients avoid unforced errors. When it comes to the markets, some things cannot be taught ― they must be lived.
#3 Reputation
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” ― Warren Buffett
Reputation is an important part of any futures broker’s background. If word of mouth about a brokerage firm is positive among peers, traders, and industry media, then chances are the outfit is rock-solid.
Don’t underestimate the value of reputation. Through some moderate online research, judging the reputation of several futures brokers at one time may be accomplished in a single afternoon.
#4 Integrity
“Whoever is careless with the truth in small matters cannot be trusted with important matters.” ― Albert Einstein
Although the modern incarnation of the futures industry was science-fiction when Einstein made the quote above, it’s especially pertinent to brokerage firms. In order to trade futures, you will be required to deposit capital into a brokerage account ― it’s imperative that your funds are accounted for to the penny.
Glitches in trading and accounting software are uncommon, but they do happen. It’s important that your broker has the integrity to admit when there is a problem and provide timely solutions to any issues that may arise. If not, there may come a day when missing pennies turn into lost dollars.
#5 Enthusiasm
“Success consists of going from failure to failure without loss of enthusiasm.” ― Winston Churchill
In many ways, your broker is your partner in the marketplace. Aside from facilitating trading activities, a broker is capable of offering advice analysis, and support when markets become turbulent. Receiving these services from an outlet that is positive and excited about what the future may hold is an invaluable asset.
In active trading, things are not always going to go perfectly. Working side-by-side with a broker that is passionate about the markets can reinforce your personal resolve when all signs point to quit.
Great Futures Brokers Don’t Grow on Trees
If you’re interested in trading futures or are in the market for a new broker, the best place to begin is by having a simple conversation with an industry professional. For more information, schedule your free one-on-one consultation with a member of the team at Daniels Trading today.
