Choose The Right Stock Broker In India For The Type Of Stock Trader & Investor You Are

DIVYA NAIR

04 Oct 2016

Right Broker

Choosing a stock broker is the first step towards participating in stock market. Not all brokers are suitable for all. For a novice investor, the task of selecting a broker is a challenge. One of the best ways to pick a stock broker is identifying the type of stock market participant you are. Stock market participants are broadly classified as active traders/investors and long-term investors.

A). Active Stock Traders/Investors. -

These participants are frequently active in the market to make fast money. They are well informed about the stock market and are self-directed traders. While choosing a stock broker, active traders/investors consider the following factors:

  • Cost - Fees charged by brokers is most important factor for such market participants. They want a stock broker who offers services at lower costs than others. Profit can shrink in size if the fee and commission charged by the broker is high. As active traders/investors are well versed with the market, they make sure that they compare the basic charges on market trades, limit trades, option trades and margin rates before choosing a broker.
  • Robust Trading Platform - They want a powerful trading tool to execute their trades in a fast-track manner. A fast and efficient tool help them keep a real-time track of their portfolio and place order from anywhere anytime.
  • Speed -For traders and investors who are frequently executing trade, speed and accuracy of execution are of great importance. This crucial feature differs from broker to broker.
  • Advisory - Active investing in equities demands in-depth knowledge of the market. In other words, active investors are required to take out more time for research. In order to cut the time on market research, active investors mostly choose a broker offering advisory services. Most of the full-service as well as discount brokers nowadays offer this service.
  • '
  • Multiple Investment Options - Such participants look for a broker who offers multiple investment options as they also want to diversify their investments to different asset classes such as equities, mutual funds, exchange traded funds (ETFs), bonds, IPOs etc.

B). Long-Term Investors

As the term implies, long-term investors are the ones who follow buy and hold strategy. Such investors adopt a long-term perspective and focus on enhancing the value of the invested assets. For long-term investors, the factors that they make a better decision can be:

  • Cost - Long-term investors also considers fees charged by brokers, even if they do not trade frequently. No matter what type of stock market participant one is, a broker offering services at nominal rates is an important parameter.
  • Advisory - When a trader is absent from the market for a while, he/she is bound to miss some or other important market fundamentals impacting the market movement. But then, it is upto long-term investors whether to spend on such service as they buy a stock for one-time and let it grow in value terms.
  • RM Support - Long-term investors do not necessarily track the market regularly. Therefore, a broker offering handholding by a relationship manager becomes an important feature for them. These type of investors like to speak with their brokers on phone, meet someone from the brokerage house and talk to someone who can take them through their stock choices and other related processes.

Conclusion:Once you understand what your trading and investing pattern is, finding the right stock broker may not be difficult. No matter what type of a stock market participant you are, working with the right stock broking partner is undoubtedly the first step to find success.

Trade with Flat Fee of Rs. 10/order with 5 Paisa Broking. Open an Account today & start online stock trading.

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Choose The Right Stock Broker In India For The Type Of Stock Trader & Investor You Are

by Santosh Jayram | Oct 05, 2016
Right Broker

Choosing a stock broker is the first step towards participating in stock market. Not all brokers are suitable for all. For a novice investor, the task of selecting a broker is a challenge. One of the best ways to pick a stock broker is identifying the type of stock market participant you are. Stock market participants are broadly classified as active traders/investors and long-term investors.

A). Active Stock Traders/Investors. -

These participants are frequently active in the market to make fast money. They are well informed about the stock market and are self-directed traders. While choosing a stock broker, active traders/investors consider the following factors:

  • Cost - Fees charged by brokers is most important factor for such market participants. They want a stock broker who offers services at lower costs than others. Profit can shrink in size if the fee and commission charged by the broker is high. As active traders/investors are well versed with the market, they make sure that they compare the basic charges on market trades, limit trades, option trades and margin rates before choosing a broker.
  • Robust Trading Platform - They want a powerful trading tool to execute their trades in a fast-track manner. A fast and efficient tool help them keep a real-time track of their portfolio and place order from anywhere anytime.
  • Speed -For traders and investors who are frequently executing trade, speed and accuracy of execution are of great importance. This crucial feature differs from broker to broker.
  • Advisory - Active investing in equities demands in-depth knowledge of the market. In other words, active investors are required to take out more time for research. In order to cut the time on market research, active investors mostly choose a broker offering advisory services. Most of the full-service as well as discount brokers nowadays offer this service.
  • '
  • Multiple Investment Options - Such participants look for a broker who offers multiple investment options as they also want to diversify their investments to different asset classes such as equities, mutual funds, exchange traded funds (ETFs), bonds, IPOs etc.

B). Long-Term Investors

As the term implies, long-term investors are the ones who follow buy and hold strategy. Such investors adopt a long-term perspective and focus on enhancing the value of the invested assets. For long-term investors, the factors that they make a better decision can be:

  • Cost - Long-term investors also considers fees charged by brokers, even if they do not trade frequently. No matter what type of stock market participant one is, a broker offering services at nominal rates is an important parameter.
  • Advisory - When a trader is absent from the market for a while, he/she is bound to miss some or other important market fundamentals impacting the market movement. But then, it is upto long-term investors whether to spend on such service as they buy a stock for one-time and let it grow in value terms.
  • RM Support - Long-term investors do not necessarily track the market regularly. Therefore, a broker offering handholding by a relationship manager becomes an important feature for them. These type of investors like to speak with their brokers on phone, meet someone from the brokerage house and talk to someone who can take them through their stock choices and other related processes.

Conclusion:Once you understand what your trading and investing pattern is, finding the right stock broker may not be difficult. No matter what type of a stock market participant you are, working with the right stock broking partner is undoubtedly the first step to find success.

Trade with Flat Fee of Rs. 10/order with 5 Paisa Broking. Open an Account today & start online stock trading.

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