Discount versus Full
Service Brokerage Firms
There is a conflict of interest
that exists between high commission paid full service brokers and you. The bottom
line is that they make money when you trade. The brokerage industry is heavily
regulated largely because of the problems associated with full service brokers
'churning' accounts to make commissions. Be careful not to let it happen to
you. If you suspect a broker has been churning your account (Making recommendations
for the sole purpose of collecting commissions), you may want to report him
or her to the NFA and file a formal complaint. The NFA settles these disputes
and often settles them in favor of the trader, especially if their investigation
shows unethical behavior by the broker, or brokerage firm.
The permanent solution to
this problem is to not deal with the full-service brokers at all. The truth
is if the full service brokers were really good at trading and timing the markets
like many of them claim to be, they would be trading for themselves and their
families instead of trading for you. Think about it. If you really want to become
a professional and make money in this business, you are going to need to do
some work on your own. That is what we can assist you with.
Discount brokers make money
on an hourly basis, or sometimes based on the number of calls they answer and
the number of orders they place. They are prohibited from giving advice or recommending
trades. The fee for their service is between $10 and $25 round turn. As a professional
trader, you want to keep your transaction costs low, especially in the beginning
when you are just learning. You also want to make your own trading decisions
based on a system, set of rules, or a method. This is critical. One of the important
keys to success is consistency. In order to be consistent in your trading approach,
you must have a plan of attack, a system, and methods for dealing with losing
and winning trades as well as determining risks. Again, this is where we can
assist you.
The technology available
today also allows traders to place orders on-line using their computer. This
removes the broker out of the equation almost entirely. The on-line fees are
often even less than the discount broker! This is certainly the way to go as
far as execution goes.
The
difference in cost between high paid brokers and discount brokers |
Number
of contracts traded over a one month period. |
Using
a Full-Service brokerage with a commission of ( $80 / r.t.) |
Using
a discount service with a commission of ( $25 / r.t.) |
Here
is the Savings you get by using my service to learn how to trade for yourself
while using a discount broker! |
10
contracts/month |
$800 |
$250 |
$550 |
20
contracts/month |
$1600 |
$500 |
$1100 |
30
contracts/month |
$2400 |
$750 |
$1650 |
Trading
results --- |
If
you use a full service broker to make trades for you, the probabilities
of making a profit after commissions are very slim. Your profits get sucked
away by the commissions. Losses are even worse because again, you pay
commissions on the losses as well. |
Using
a discount service, you increase your probability to profit, by simply
reducing your costs. Add our monthly fee for access to our system and
your costs are still far less than with the high paid broker, but more
importantly, you remove the conflict of interest. |
This
savings alone can increase your bottom line! |
Rather than depending upon
a full service broker to make your decisions, using an outside source like Floyd
Upperman & Associates to teach you how to follow the markets on your own,
you eliminate the very real conflict of interest which exists between a commission
paid full-service broker and yourself. Think about it. Your objective should
be to learn what makes the markets tick and to learn how to become independent
in your own analysis, decision making process and placing orders. Full service
brokers don't want to teach you this out of fear they will be out of a job!
If you are serious about
trading and really want to know what it takes to be successful,
then we challenge you to read through our web site and learn what
we have to offer.
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NO
TRADING SYSTEM CAN GUARANTEE PROFITS
No guarantees can be made for success. Past performance is not a
guarantee of future profits.
Futures trading is NOT our only means of income. We also invest
in stocks, real estate as well as
generate income from other businesses. We have both winning trades
and losing trades. We trade professionally, but not daily. We wait
for what we believe to be ideal trading opportunities.
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