There are a few common elements to successful futures trading — and choosing the right broker is one of them. Finding a brokerage that offers the right combination of technology, service and features is imperative for traders seeking to maximize returns.
If you’re not an experienced trader – or you’ve been with the same firm for an extended period — you may need help identifying the key attributes of today’s best platforms.
To help you navigate that process, let’s take a closer look at the most critical considerations to weigh when choosing your first (or next) futures broker.
How to Evaluate a Futures Broker
Offers Full-Featured Trading Platform
The evolution of technology has dramatically changed the nature of financial markets. Just a few decades ago, all futures trades were conducted hand-to-hand inside a physical exchange. Today, the shouting traders and furious hand gestures seen inside a futures trading pit almost seem like a quaint relic.
That’s because — as with so many other things — trading has largely migrated online. This means that access to a full-featured trading platform is almost a prerequisite for success. The right broker provides the digital tools necessary to seamlessly research, customize and execute trades and monitor market activity. You’ll want access to fast price updates, the latest breaking developments, market-leading research and all of the technical and statistical data needed to make informed trades.
Provides Multiple Trading Platform Options
The option to use multiple platforms is also essential, as you’ll want to find one that best matches your objectives, trading style and level of experience.
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Additionally, the platforms offered by the right broker need to offer reliable access. Nothing aggravates a seasoned futures trader more than to see opportunity squandered by downtime, lag or poor performance.
If your brokerage offers one click trading from charts, 24/7 trading, access to global markets, major chart studies and a well-functioning platform specifically optimized for mobile, you’ll know you’re on the right track.
Expertise, Support, Broker Fees and Cutting-Edge Options
Advanced, reliable and full-featured platforms are important, yet it’s also essential to look at the team behind the trading infrastructure. Access to proprietary research and analysis can help you identify market opportunities that would otherwise be missed. Futures trading also has a learning curve, so the ability to find dedicated support when challenging conditions arise is also a key feature.
Futures Expertise & Support
Because traders come with every possible level of experience and expertise, the offerings of a brokerage should reflect this. Good brokerages should have a deep reservoir of educational and training materials for your perusal. Articles, training videos and other materials are a great source of information for those who are early in the journey.
Brokerage Fees
Fee structures are also important. Whether you are self-directed or broker-assisted, look for a firm with transparent pricing and a long track record in the market. The least expensive option isn’t always the best; you’ll need to consider what you’re getting for the money in terms of support, access to cutting-edge trading platforms, the expertise of the brokerage etc.
Cutting-Edge Options
Brokerages are also rolling out platforms with social functionality. Some allow you to share your trades with others and earn subscription fees. Traders with a record of demonstrated prowess can build audiences quickly, earning passive income simply by sharing their trades and strategies.
The takeaway
Choosing the right broker — and the optimal platform — often makes the difference between success or failure in the investment realm. This is doubly true in terms of futures trading, where volatility is elevated and poor platform performance can result in significant lost opportunities.
If you’re considering trading futures, or you’re less than satisfied with your current broker, please consider the attributes outlined above before making your next move in order to maximize your returns.
Visit the RJO Futures Learning Center – RJO Futures is your one-stop brokerage for futures trading education. You can use our resources to build your trading knowledge, and learn to trade futures and options on futures for the financial and commodities markets. See below for a listing of articles, guides, and webinars to help you along the path to being a more successful trader.