Four Reasons Why You Need a Better Broker
If you’re going to trade around the VWAP, you need to day trade.
And if you’re day trading you need to enter your position and get out the same day.
Liquid and loving it I always say.
What you might not know is that your trading platform is one of your best tools when it comes to day trading.
And your broker may not have you set up the best way possible to do what I do every day.
So let’s not wait until the next opening bell to change things around. Take some action ASAP.
Today I have four reasons you might want to consider getting a new broker.
Let’s get right into it…
1. Trading Multiple Times a Day
There are a lot of restrictions on day trading brought to us by FINRA.
One of the biggest restrictions is that if you don’t have $25,000 in your account, then you can only make three trades within five business days.
If you do more than that on unauthorized account, you can run into big trouble with your broker.
Even if it was an accident, your account will be flagged, and you will be forced to have at least $25,000 in your account at all times.
Not everyone can start with a $25,000 account.
Some only have a couple hundred to their name.
That’s where a good broker comes in.
Many brokers offer you the ability to day trade on a “cash” account – that is one that doesn’t use margin.
This has its benefits and downsides, but the biggest benefits is allowing you to trade the same stock as many times as you want in one day.
2. Quick Execution on Trades
I can’t emphasize this enough: you need to be quick when you buy and sell stock.
One or two seconds can be the difference between hundreds of dollars if you aren’t quick on the trigger.
So, the last thing you need is several hoops to jump through when you’re trying to execute a trade.
You want your trades to be done in just a click. Not two or three or more.
On top of that, you need to be absolutely sure you are getting live data on your charts.
Search around for platforms that suit your trading needs, and see what fits you best.
3. The Ability to Short Stock
When you’re trading, you’re always determining your risk going into a trade.
And that’s especially important when you’re shorting.
There is technically “infinite risk” if you don’t have your stops in, but defining your stops ahead of time allows you to make it so that never happens.
But when it comes to some stocks, they can be unshortable.
Brokers won’t let you borrow stock to short for a whole slew of reasons.
So for these “hard to borrow” stocks, you need a good broker to step in to get you what you need.
For hard to borrow stocks, brokers will often charge a fee of a couple hundred dollars to short certain stocks.
But think about it.
If you have a $1000 day shorting a stock, and you only had to pay $300 to your broker, you made out still with $700 at the end of the day.
Shorting needs to be done in big increments to get these kind of days.
But if you’re one to want to play bothsides of a trade, you need a good broker to get you there.
4. Good Customer Service
With all of these topics thus far, sometimes you can get stuck in a platform user interface…
Or get locked out of your account…
Or become confused as to why a trade cannot get executed.
There’s a whole slew of problems that can happen when you’re day trading.
That’s where good customer service comes in.
Whether you’re a seasoned veteran or just starting, you want to be comfortable to call up your broker and be able to ask any question.
A broker’s customer service is absolutely essential to having a good trading experience.
Good brokers will always have your back at every step of your trading journey.
I suggest to shop around if you are dissatisfied at all with your current broker situation.
September 30 2022
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