Can Your Futures Broker Answer These 8 Questions?

One of the first steps in becoming a successful futures trader is making sure you have a good broker that can help you utilize your trading strategy.

Keep in mind that every broker has their pros and cons. Some will have certain benefits that outshine others, while some will have glaring negatives that you should avoid.

Some brokerage services will be more effective than others in assisting you in achieving your trading objectives, so you need to be clear about what your objectives are.

But whatever they may be, take a look at my approach to finding a good futures broker below. If you follow this advice, you’ll be well on your way to building your futures trading career.

Questions to Ask a Potential Broker

When looking for a futures broker, you need to ask them the following eight questions…

Are You Regulated? If Yes, By Who?

Any investor who takes the opportunity to trade with an unregulated broker is taking a significant risk.

But when you choose a properly supervised broker, you are safe from abuse and theft, which is crucial in case something goes wrong.

Do You Reside in the Same Country?

Make sure you know if you have a broker that’s located outside of where you live.

A broker that isn’t in your country of residence could deny you your rights as a trader.

On the other hand, a broker from your home nation that is obligated to follow the laws and regulations of your country.

Do You Have the Right Technology?

You’ve got to know which brokers are user-friendly and convenient to use.

Do they have an app you can download that can work for Windows, Mac, iOS or Android?

If your broker has a terrible online platform or difficult-to-use smartphone app, you may want to reconsider.

Do You Have a Demo Account?

You need to know if you can practice trading before making a real account for yourself.

After all, you’ll want to have an understanding of how their platform works before you start trading with real money.

Using a demo account is a fantastic way to practice trading the markets, especially if you’re a new trader.

Sure, you’re not using real money when you trade with a demo account. But that’s the whole point!

Just like playing a sport, you want to practice before you compete… Once you’ve got your skill set in place, then you can go play the real game.

Do You Charge for the Data Feed?

You need to ask beforehand if a broker will charge you a trade or data fee.

If the answer is yes, ask how much the rates are.

Data feed fees and commissions are two different things, and that brings us to the next question…

What Are Your Commissions?

Brokers will handle the compliance side, so they will charge you a specific commission for every trade you close.

These are also called round-turn fees.

These can get expensive and eat into your profits, so choose wisely!

Can I Rely on Your Customer Service?

No one wants to do business with a company that has bad customer service!

There could be a scenario when you are in the middle of the trade and the power unexpectedly goes out.

You have to know that you can give your broker a call during this kind of emergency.

Will they allow you to manage your position over the phone, like placing a stop or limit for you?

What Are Your Margin Requirements?

Depending on the futures market and the contract size, one contract can cost between $50 to $7,000.

And for each position you take, there’s what’s known as “intraday margin” and “initial margin.” Make sure you know your broker’s margin requirements.

By asking these important questions, you can zero-in on the best broker for you trading strategy.

And since everyone’s trading strategy is unique, a broker that works well for one trader may not be a good fit for another.

Start looking for your broker and ask the above questions to take the next step towards becoming a futures trader!

The Great American Reset

Global food shortages… An energy crisis… The devaluation of the US dollar…

According to expert analyst Ross Givens, America as we know it is about to change.

Over the next two years, we will go through the most turbulent transformation of our lifetime…

Long-term, I believe this change will be for the better.

But to get there, you, me and every other American citizen will have to live through an unprecedented level of chaos…

Unlike anything any American has ever experienced.

Here’s how you can protect yourself during this crisis, and potentially even grow richer…

Keep on trading,

P.S. For more on the markets as well as trading education and trading ideas like this one, look for the next edition of Josh’s Daily Direction in your email inbox each and every trading day.

I’ll be bringing you more of my stock and futures contract trading tutorials as well as some additional trading ideas.

And if you know someone who’d love to make this a part of their daily trading routine, send them over to joshsdailydirection.com to get signed up!

Josh Martinez

Josh Martinez

Josh Martinez is an elite Analyst who’s been actively trading the financial markets since 2011. He’s known as one the leading innovative traders in this industry due to his his cutting-edge strategies.

Josh first burst into the scene when he took an initial deposit investment of $500 and turned into over $39,000 in just under 2 years.
Josh’s trading articles have been featured in Your Trading Edge, The FX Street, Trader Planet, Forex Crunch, Trading Pub, and Equities.com.

In addition to trading, Joshua has also trained thousands of traders worldwide. His strategies and systems have helped others find success in the market

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