So I got some questions. Folks are kind of revisiting their overall practice and the business of their trading, so to speak. And I do get questions quite a bit from places that I could probably earn a lot of affiliate commissions from and that are online Broker/Dealers, Introducing Brokers, FCMs and things like that. And the truth to the matter is for where you are, if you are a retail trader trading your own money, there’s virtually no difference between any of them for where you are.
If you need specialized services that encroach on say, Prime Brokerage, then call me because there’s a different solutions out there. But if you’re just trying to put your capital to work and your trade and you need to have someone house your money and you have buy / sell decisions, hopefully looking at a minimum of daily charts and you could enter stop orders, most every place has such a trading platform that would allow you to enter market orders, stops and limits, and this and that.
I’m not talking about day trading, buying power and any of that nonsense, that’s not a concern to me. But in terms of being able for you to do whatever it is that you want to do, then I don’t think it matters. You should understand though that in the future space there is a difference between an FCM and an Introducing Broker. An IB, an Introducing Broker is largely someone that might provide research or some type of trading platform or some unique type of service. Maybe they deal with smaller accounts, I don’t know, but they introduce money, hence the name Introducing Broker. They introduce it to a clearing member, an FCM. Right now, most of the large Broker/Dealers out on the street are concurrently registered as a Broker/Dealer as well as usually an FCM, a Futures Commission Merchant, and an FCM, as it’s known as the entity that will buy and sell futures for you, but also house your cash.
So you send the cash to the house and then they buy and sell the instruments for you and then will collect the money, both your deposits, and then net out the gains and losses from all your trades. Someone has to hold the money. A clearing member on the broker dealer side is someone who has net capital requirements, blah, blah, blah.
The FCM side is kind of the same thing. It’s kind of like a Broker/Dealer on the future side. So you can do your own research and investigate whether or not you want to deal with an Introducing Broker. Maybe you have a relationship, doesn’t really matter. I’m going to guess the majority of you are doing things by yourself, so you don’t really have any human interaction.
I’m kind of just the opposite. I would much rather deal with a human being because the world is very dynamic and no matter how extensive an entity’s FAQ page could be or chat function can be, they typically they can’t possibly have all the answers to whatever questions that you might have that come up in real time. And that’s another reason why I don’t want to get into Discords because then people start delegating me these kinds of questions that they can go out and do on their own. And there’s not enough whiskey in Ireland for me to want to do all that. So I wouldn’t really fret over which company you put your money with. Again, there’s no such thing as an advanced charting package. So when you’re looking at what they market, the bullets, those are features and features aren’t necessarily benefits. What you actually need is the ability to buy and sell, probably with stop orders and maybe be able to move money in and out of your account.
Those are the basic functions. Anything other than that, you’re probably making the world too complicated for what it is, which you want to do, which is to grow your wealth. So I wouldn’t fuss over what entity to use as far as a trading online platform. They’re virtually indistinguishable from one another.
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