Page 72 - THE MARKET WHISPERER

70 PART 2 - Day Trading And How To Get Star ted

call. Commission markdowns and Internet penetration, together with new
technological developments such as mobile phone applications that allow
buying and selling, have led the trading world to the portals of additional
population strata.

How to Open an Account with a Broker

Opening a stock trading account is a simple procedure. All you need
is to complete several forms and add a color scan of your current valid
passport, and a utility bill such as from the electricity company or a bank
statement proving your current address. Every broker will be happy to
help you complete the process in one brief phone call. When the forms are
certified after the broker has checked the data, the broker will provide you
with details of the bank account to which you transfer money. Usually 24
to 48 hours later, your account with the broker will be credited. The broker
will then send you an email with installation instructions for the trading
platform and an initial password which you can later change. When you
first operate the trading platform through your dedicated password, you
will be able to see your deposit in your account, awaiting your order. If you
surf to the broker’s site, you can then use the same password to view your
execution history. The entire process should take between one to five days
to complete.

Can Your Bank Be Your Broker?

Theoretically, yes. Practically, no. Yes, because every bank is a broker that
also enables you to buy stocks in every stock exchange. Yes, because your
money is already held by the bank, and you therefore have no need to
transfer it to a separate broker’s account. Nonetheless, several problems
arise. Banks will generally collect commissions from you that are from five
to fifty times higher than those collected by specialist brokers. Banks will
generally provide a limited, cumbersome trading platform that does not
display real time data and is usually suited only to long-term investors, and
definitely not suited to day traders. Later we will review the requirements
of trading platforms. Finally, I have yet to come upon a bank able to provide
you with the necessary tools.

How to Choose a Broker

Many brokers would be happy to provide you with a trading platform, but
not all of them are suited to a professional trader. You need to distinguish
between brokers who designate their services to the public of long-term