Low Cost Futures Trading Brokers That You Can Trust

Your futures trading broker is one of the most important components in your futures trading strategy. There are thousands of online trading brokers out there and they all claim to be the "best". Obviously they can't all be #1 and, in fact, some online brokers provide poor service, outdated technology and still overcharge on their fees and commissions.

Discount Online Broker vs Full Service Brokerage

Since you are going to be trading online, there is no need for you to trade with a so-called "full service broker" when a discount online futures broker can provide the basic services that you require for a lot less money.

There is no doubt that the best way to identify a good discount online broker is to ask other futures traders which online broker they use. Naturally you can expect that successful futures traders are using futures trading brokers that are getting the job done for them.

If you don't have access to anyone who is actively trading futures then you need to begin your online broker search from scratch. Here are some key indicators of whether or not a particular online brokerage firm is reputable and whether or not they are a good trading broker for you:

1. Minimum Portfolio Size

There is no sense selecting an online broker who requires that you keep more money on deposit than you have available to invest. When narrowing down you search for an online discount broker, ask them what minimum deposit is required to open and maintain an online futures trading account.

2. Online Broker Services

You need to know what services are available to you through the online brokerage and what the charges and fees are for each service. Normally a discount online futures broker will offer an array of services on an ala carte or "pay as you use them" basis. It's important that you are not being asked to pay for services which you do not need, yet the services that you will require are not only available but are affordable as well.

3. Discount Online Broker Commission Schedule

Commissions will be the bulk of your trading expense. No matter which futures trading brokers you look at, they will all charge commissions. These commissions are not set in stone and can vary widely among online brokers. Ask to see a copy of their commission schedule or check it out at their online brokerage web site.

4. Check the Online Brokers Reputation

The best fee and commission plan in the world doesn't do you any good at all if your discount online broker has a bad reputation. Reputable futures trading brokers will be happy to provide you with references. Be sure to ask for them.

After you have narrowed your list of futures trading brokers down to a few candidates, you can check their reputation with the National Futures Association (NFA) by calling 312.781.1300. The NFA is a self-regulatory organization that all futures trading brokers are required to be a member of. The NFA keeps a detailed history of each online broker and can tell you whether or not there are any disciplinary actions against the discount online futures broker that you are considering opening an account with. Unfortunately, the NFA can't tell you if an online broker is good, but they certainly can tell you if one is bad.