Steps
1
Know the fees that brokers charge:
* Inactivity fees: (e.g. a £20 charge if no trades were placed during a 30 day period.) Brokers will often charge you for not trading. These are normally brokers that have very low trading fees, they rely on regular trades so need to charge if trades aren't placed. If you just want to place a low number of trades month (less than 10) then avoid broker accounts with inactivity fees.
* Data fees: (e.g. $15 a month to receive UK stock market data.) If you are going to be trading stocks from multiple countries make sure you choose a broker that has cheap (or no) fees for foreign stock market data.
* Trading fees: (e.g. $6 flat fee per trade.) To buy and sell a stock you will be charged a fee per lot. If you are going to be trading regularly then you will need an account with the lowest trading fees possible.
* Withdrawal fees: (e.g. $15 charge if more than 1 withdrawal a month is made.) People that will be trading for a regular wage will need to look out for withdrawal fees as they could be charged for regular withdrawals.
* Interest rates paid: (e.g. 3.5% paid a year to your unused capital.) This is a very important aspect of a brokerage account. Some brokers pay hardly any interest to the money not being used in your account and some brokers pay as much as 0.25% under the base interest rate. If you will be using a large % of your capital then interest rates aren't that important. However, if you have a large deposit and think you will have money regularly sitting in your account, and not being invested in a stock, then choose the broker with the highest interest rates.
* What platform the brokerage account uses: (This applies to online traders.) How will you be buying your stocks? Through a website or a java based application? Make sure you are comfortable using the brokers platform, the last thing you want is to incorrectly place a trade because you are confused by the layout of the platform. This may sound hard to believe but I simply can't stress enough the difference in complexity I’ve seen in broker platforms. Some are easy to use and other seem like you need a rocket science degree to use.
Tips
* Make yourself aware of all the fees a broker will charge.
* Compare brokers.
* Know roughly how many trades you are likely to place a month and choose a broker that will be best value for your style of trading.
source : wikihow
