How do you choose the right broker / dealer to open an account with?
There are several factors to seriously consider in opening an account. A few basics are the overall services that the company provides from research, reliable / accurate source of information, competitive pricing to trade execution and more importantly the stability and financial standing of the company as well as their counter party, banks and other financial institutions that they deal with.
CHECKLIST FOR TRADING COMMODITY FUTURES AND FOREIGN EXCHANGE MARKETS:
This outline shall serve as a matter of due diligence when considering trading the Commodity Futures and / or the Foreign Exchange Markets and their related investment instruments. It is vital for the investor to acquire as much knowledge,
information on the topics and items listed below but not limited to the order of the list. The list consist of the major issues that needs to be address even before opning an account.
The financial Objectives of the investors should be properly laid out and emphasized as to the main goals set and prepared by the clients in relation to the financial or commodity that they will engage in trading. However, investors should also consider their financial conditions and should consult a financial adviser at all times in the course of any project undertaken by the investor.
Choice of Commodity / Financial instrument base on :
Choice of : Counter-Party Banks offering FX Dealing
Services and Commodity Futures Trading
Authorized : Broker / Dealers, FCMs, FDMs
Choice of : Futures Commission Merchant / Broker - dealer
Market Maker - Counter-party :
: Introducing Brokers / Dealers : Guaranteed IBs
Non-Guaranteed IBs'
Licenses : CFTC, NFA, FSA Complaint Licenses
Background Check - Complaints / Lawsuits
Exchanges : CBOT - Chicago Board of Trade
: NYBOT - New York Board of Trade
: NYMEX - New York Mercantile Exchange
: ICE - Inter-Continental Exchange
: GLOBEX - Global Exchange
: EURONEXT - European Exchange
IMPORTANT ISSUES:
: Account Balance / Tranfers
: Bank Deposit of funds / Interest / Security
: Commodity Information
: Contract Sizes
: Trading Limits / commodity / Exchange
: Types of Orders
: Margin Requirements / Maintenance /
Overnight / Day
: Rollovers / fees / intrinsic values / give up trades
: Commissions / Rebates / fees / other charges
: Insurrance / FDIC / others
: Margin Calls / Deadline /
Extensions / transfers / Deposits
: First Notice Day
: Expiration / Date / Month
: Complaints / Errors & Ommissions
Conditions : Agricultural : Planting or Cycle /
Seasonal Common weather conditions
: Financials : Foreign Exchange rates,
interest rates, Derivatives, Options,
forwards and Swaps
: Precious Metals : Gold, Silver,
Platinum, Copper
: Crude Oil, Natural Gas,
heating Oil, Gasoline
Trading : Basic Buy & Sell
: Averaging / Scaling / Trending
: Spread and Straddle
: Arbitray Hedging
: Simplified Hedging
Market : Fundamental : Economic / Trade Policies
: Political / Government Regulations
: Business Cycle
: Weather Conditions
Technical : Market Analysis / Trading Tools
: Systems Requirements
: Trading Platforms
: Accessibilty to Information data
: Secondary Markets
: Trading Development & Knowledge of the Market
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