Big Daddy's Trunkated Ideas
Profile Blog Photos Subscribe Syndicate Search Contact Me  
Topics
BUSINESS TALK
fun and laughter
ON LIVING LIFE
My Photos
MY 'GHOULIES'-SIMPLY BEING TOGETHER
Members
Sign In

Topic: BUSINESS TALK
THE TEN COMMANDMENTS OF ONLINE INVESTORS
Published: Sep.17.2008 @ 4:14 pm | Print | Email | Comment
Last Edited: Sep.17.2008 @ 3:25 am

(FIRST PART OF A 5 PART SERIES)
NOTE: FOR LACK OF SPACE, THE AUTHOR IS PUBLISHING THIS ARTICLE IN A 5-PART SERIES.




  • 1. Thou must first know thy self and thy market well.

Trading stocks, currencies gold, or commodity futures, or any other securities(fast moving markets) via the internet can be terribly taxing! Before you decide to plunge into it you must know offhand if you are ready to lose a lot of good night sleep for just monitoring the markets; or if you have the stomach to take frequent roller coaster rides during peak market activities (like watching your investment tremendously grow within seconds just to see it melt down in the next)! You must know first if you have the discipline to be able to maintain your cool during wild and wide price swings and still be able to call the shots objectively according to your pre-determined trading objectives. This means you should not to let fear overshadow you when the market moves against your position, nor allow greed to take the better of you when the market is in your favor. Remember always that markets are frequently unpredictable and that you must learn to adapt to its peculiarities fast otherwise it will eat you up alive.



  • 2.Thou must deal only with registered brokers.


Make sure the broker is registered! If the broker is based in the U.S., contact the Securities and Exchange Commission (SEC) and also check with your state securities regulator as well. You can research the investment online using the SEC's EDGAR database at http://www.sec.gov/edgar.shtml. To contact your state regulator call the North American Securities Administrator's Association (NASAA) at (202) 737-0900 or online at http://www.nasaa.org/home/index.cfm. You may also contact the Commodity Futures Trading Association (CFTC) at http://www.cftc.gov/ and the Financial Industry Regulatory Authority (FINRA) at http://www.finra.org/index.htm. The rule of the thumb you must use here is “avoid the unregistered and junk the brokers with recorded complaints.”

For non-US based brokers, you must demand verifiable documentations from the broker regarding their affiliations and representations. Some online brokers are merely introducing brokers (IB), meaning they act as marketing representatives for a bigger broker, in which case you must demand to see the IB contracts and investigate the affiliation of the principal broker. Other brokers “white label” for their principals. Their websites may appear and have the looks of a big broker when in fact they are mere affiliates of other brokers. Don’t deal with white labelers if they don’t publish their principals. White labelers make money through an additional spread of a pip or two built in into their price quotes.While I don’t have anything against white labelers who are affiliated with established brokers of good standings, I would advise you to avoid them unless they have incorporated more add-on features or services other than those offered by their principals to justify the additional cost to you.

Big Daddy's suggestion that you deal only with registered brokers is not being biased against overseas brokers. It's just that online investors must always be provided with a forum or a venue to file any claims they may have against their online brokers in the future. And at this point in time,only U.S. based brokers can provide us with this safety net.
There are 0 comments. Post A Comment | Subscribe To Comments
   
| Report Member | Free Blog BlogText.org