An often neglected factor in investing success is choosing the right broker. A broker is your partner in your investing journey. There is a symbiotic relationship where the broker survives as a business from the fees you pay through your trading activities. A broker that charges too much will do well in the short term but will lose customers in the long run as the customers cannot make enough profits to cover the cost of trading.
Many investment strategies make or break due to the fees that brokers charge. Transaction cost is especially important for strategies that trade more frequently. Strategies that rely on leverage can be rendered useless when the broker charges an exorbitant margin borrowing fee. Strategies that short would also be less effective if the cost of borrowing securities is too high.
There are many brokers out there but we have only been using Interactive Brokers for many years now so we are only familiar with them. Here's a two-part video series to introduce Interactive Brokers. In this first video, we look at how to open an account with them.
Disclaimer: This video is provided for informational purposes only. This video is not intended to be, nor shall it be construed as, financial advice, an offer, or a solicitation of an offer, to buy or sell an interest in any investments.
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