When it comes to achieving longevity as an active trader, it pays to enlist the services of a great brokerage firm. However, assuming that the best futures brokers are those with the lowest commissions is a rookie mistake. Strong core competencies and dedicated customer service more than make up for an added $0.25 or $0.50 per round turn.
Any reputable broker should be able to answer a few basic questions. Here are three of the most important.
1. Are You Licensed and Registered in the U.S.?
It’s an obvious point, but the best futures brokers conduct business in a legal, reputable manner. In the United States, this means that a firm is a member of the National Futures Association (NFA) and registered with the Commodity Futures Trading Commission (CFTC).
If you’re interested in opening up an account with a prospective broker, be sure to first check their standing at the Background Affiliation Status Information Center (BASIC). In the event that the broker’s credentials are ambiguous, seeking an alternate service may be the best course of action.
2. Do You Value the Client-Broker Relationship?
Although you’re technically the trader, it’s up to the broker to facilitate all trade-related transactions. From extending the margin to executing orders, the best futures brokers are those who treat their clients as partners.
At Daniels Trading, our team of brokers believes that there is more than one way of looking at the futures markets. We respect differing points of view by promoting the following relationships:
- Broker-to-broker: Most brokers don’t always agree on everything. Unique personal backgrounds and experiences frequently produce dissimilar perspectives. The team at Daniels Trading understands this point and respects the role that diversity plays in the crafting of strong trading decisions.
- Client-to-broker: The best futures brokers listen to their clients. A majority of aspiring futures traders have achieved some degree of success in another field and bring a distinct skill set to the markets. At Daniels, we recognize that although we know a lot, we certainly don’t know it all. In our eyes, “servicing the account” means building a strong personal relationship with you, the client.
3. What Are Your Core Competencies?
Make no mistake, futures trading is a challenging endeavor. The markets are ever-evolving, dynamic atmospheres that can change directions in the blink of an eye. Without the help of a competent broker, consistently securing market share can be a monumental task.
When it comes to trade-related competency, the best futures brokers provide their clients with two things: superior market access and premier execution. Here are several questions that can help you quickly identify if a broker is up to the task:
- Do you feature direct market access (DMA) capabilities?
- Are your software trading platforms user-friendly, advanced, and customizable?
- Is your order routing robust? Will my orders be held locally or server-side?
Only the Best Futures Brokers Are Worth Your Business
Every year, thousands of individuals enter the markets in pursuit of their financial goals. Unfortunately, many select a subpar broker and are doomed to fail before ever placing a trade. To promote success, it is wise to choose a broker who is licensed, competent, and values diverse opinions.
If you have a question of any kind, feel free to run it by a member of our team via our Live Chat option. Open Monday to Friday from 9:00 a.m.-5:00 p.m. CST, Live Chat offers fast support for a wide range of futures inquiries.