Finding a Broker

"Hey Joe! I need help finding a broker. I notice that discount commission rates are pretty much the same. So how do I choose?"

Commission is definitely not the most important factor in choosing a broker. Most important in choosing a brokerage firm is the per trade slippage, the difference between the stop order price and execution price.

Based on a study I saw some years back, ten orders were placed with five commission houses. All orders were priced in the same market at the same price, before the market opened. The difference in slippage from worst to best was over $800. Slippage one year for Rosenthal-Collins trading one and two contracts of the S&P, was over $20,000 per account. The floor broker for the majority of those trades was Mario De Bartolo. All the fills were supposedly legal. One order for 15 contracts was to sell at 45. The market took over two minutes to fall in one-tick increments to even money, at 00, before an up tick. All 15 contracts were unbelievably filled at 00. Slippage on the order was $3,375. A week later another order was slipped over $2,000, then all accounts were closed. Coffee once had the daily high and low in the opening range. I was filled on my buy stop and sell stop at the high and low of the day, 360 points times three. Legalized theft. The broker could have taken both sides of the orders. New York markets are notorious for their slippage, as is the Chicago pork belly market.

Any broker who allows this kind of slippage to occur on his customer's orders is not worth having as a broker. There are brokerage firms that carefully monitor the kinds of fills their customers are getting from the floor. If the fills are bad, they will dump the bad floor broker and use another. Bad floor brokers can be penalized that way. They lose the business. A good broker will do battle for his/her customers. That's why we use the broker we are currently using. If you want a referral, let me know. I'll be happy to give it.

Joe Ross
Trading Educators Inc

About Joe Ross:
Joe Ross has been trading for more than 47 years, and is a well known Master Trader. He has survived all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.

Joe is the creator of the Ross hook, and has set new standards for low-risk trading with his concept of "The Law of Charts?." Joe was a private trader for most of his life. In the mid 80's he shift his focus and decided to share his knowledge. After his recovery, he founded Trading Educators in 1988 to teach aspiring traders how to make profits using his trading approach. He has written 12 major books on trading. All of them have become classics and have been translated into many different languages.

Joe holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, VA. Joe still tutors, teaches, writes, and trades regularly. Joe is still an active and integral part of Trading Educators.

---

Remembering TEOTWAWKI and Learning from It

Its only been about 5 years since we had major... Read More

Trading Tips No 7: Developing a Casino Mentality for the Day Trader

I submit that the successful day trader would profit well... Read More

What My Horse Had For Breakfast

Let's see, he had some oats, fresh alfalfa and his... Read More

Day Traders and Swing Traders and Options? Maybe!

Typical day traders and swing traders look for stocks with... Read More

Press Release Scams and Successes: Reading Between the Lines

Press releases are a means through which companies can keep... Read More

Mutual Fund Selection Made Simple By Indexing!

Non-indexed mutual funds try to keep it secret that actively... Read More

Basic Options Terms

Options are good investing and speculative instruments. But options terminology... Read More

Buy: Hold: Sell: Jump

I'm sitting here at my computer desk with a cup... Read More

Chinas Great Missed Opportunity

While a U.S. Representative to the Asian Development Bank Executive... Read More

Delist My Corporation Please

It use to be said that once a company was... Read More

Begging Your Trust in Africa

The syntax is tortured, the grammar mutilated, but the message... Read More

The American Age of Inflation is Over

"The American Age of Inflation is finished." So says economist... Read More

Chinas Inscrutable Currency Strategy

Purpose: Expose Opportunities for Smart InvestorsThe move by China's central... Read More

Investors: Avoid These 5 Common Tax Mistakes

For many investors, and even some tax professionals, sorting through... Read More

Asset Location ? Increase Investing Returns & Reduce Your Taxes

Location ? Once the holy grail only for real estate... Read More

Discover the Foundation of Retiring Wealthy - The IRA!

Let me tell you about some legal ways to avoid... Read More

Missleading Fund Names Wreak Havoc On Investor Returns!

Mutual fund managers use fake fund names to part you... Read More

Finding False Gold in Penny Stock

As far as traders go, many do not see the... Read More

Creating a Financial Future - Putting Your Plan Into Action Part 1

This column has previously discussed "picturing the future that we... Read More

Invest or be Pink Slipped

Firing an employee seems to be easier and easier for... Read More

Introduction To FOREX

The Foreign Exchange Market, better known as FOREX, is a... Read More

Tyranosaurus Rex

Everyone knows T Rex was the most fearsome of all... Read More

When It Comes To Investing, Asking The Right Questions Can Help You Make The Right Decisions

Are you ready to open your pathway to financial independence?Well... Read More

Just Say NO to Your Stock Broker

We have all heard that slogan that started back when... Read More

Why You Need To Buy and Sell Gold Coins (Part 5)

Grading coinsThe condition of a coin is commonly summarized by... Read More

It Is Never Too Early To Start A Roth IRA!

The Roth is kind of weird until you get used... Read More

Volatile Oil

The Light Crude Continuous Contract fell from $67.70 a barrel... Read More

Should You Put Your Annuity in an IRA?

Let me start by answering that question...if an annuity fits... Read More

Moving Average Convergence Divergence ( MACD ) Charts

The Moving Average Convergence Divergence charts, or MACD charts for... Read More

How to Choose the Right Share Class

You'll want to opt for the no-load or institutional share... Read More

Options Made Easy and Investor Education - Simple Enough for a 10 yr Old Kid

How many of you out there think that the market... Read More

The 8 Biggest Mistakes When Designing Portfolios - and How To Avoid Them

Are you as good an investor as you think? Do... Read More

Use this Simple Trick its to Buy $100 Bills Direct from your Bank for only $97

Most People just don't understand the power of using their... Read More