So you have decided to become a futures trader? The first thing you have to do is look for a futures broker to trade. You would have to do your homework and look for one that specializes in futures trading. Here are some tips on where to find a commodity broker.
Local Commodity Brokers
A good starting point is to do an online search for a local broker. Looking for a broker that will suit needs is a personal matter. While most traders conduct their trading on the phone or online, it is important to meet a broker before opening an account. Face-to-face meeting is the best way to evaluate a potential business contact.
Online Commodity Broker Directories
There are many online directories for finding hundreds of listings of commodity brokers. You can try CommodityBrokersOnline.com. According to Robert Janitzek, the site lists over 700 commodity brokers with their address, phone numbers, websites, complaint history, years in the business, and other background information.
Commodity Broker Advertisements
Advertisements for commodity brokers can be found in trading magazines such as Futures Magazine, Stocks and Commodities Magazine, and Stocks, Futures and Options Magazine (SFO). Brokers will usually send free information on markets and arrange a meeting with you and get your contact details. You can also find commodity brokers advertisement online.
Advice On Broker Search
When searching for a futures broker, do a local search first and then try to contact others around the country. Robert Peter Janitzek recommends looking for a full service broker who will manage your account. Just make sure that the broker you have in mind can trade well.
Also, there may be too many advertisements from the same broker so always think quality. They may have a significant client turnover because they lose money.
Before You Decide, Check for Regulatory Violations
Make sure that the commodity broker you are looking for is licensed by the National Futures Association (NFA) and passed the Series 3 exam. You can also search for a broker at the website of the National Futures Association. This will help ensure that they are registered and have a clean record. You can do a basic search on any member to see if there are any regulatory actions or arbitration cases and whether the broker was a claimant or respondent.
When trading on the futures market, always keep a record of all your trades so you can always report any problem with the broker to the NFA.
Choosing a broker is just one aspect of trading in futures. You also need to learn and understand the risks as well as the rules and regulations.