Alright, so today we are going to talk a little bit about conventional brokers. Conventional brokers are brokers like Scottrade, E*Trade, Schwab, Fidelity. These brokers are geared towards the retail trader who doesn’t have a lot of sophistication for the most part. There is nothing wrong with these brokers. They offer a lot more service than the direct access brokers do. They offer a lot more tools for research and they are more geared towards longer term swing traders rather than active day traders. So, if you are a swing trader or if you trade a lot of shares every trade, then these type of brokers might be a better deal for you.
So, if you are a swing trader or a long term trader and you aren’t making that many trades. Or you’re making let’s say, you know, 1 or 2 trades a week, 3 trades a week maybe, then sometimes these retail traders are a better fit for you. Certainly their platforms are a lot more user-friendly. Generally speaking they are more fun to look at and to use. They offer a lot of support and material on their site. They offer a lot of research materials for longer term trading.
But, if you are trying to do short term trading, then a lot of times the software that they provide isn’t really up to the task. Even the more recently developed active trader platforms don’t really do as good of a job for active traders as the direct access brokers’ software does. In addition to which there aren’t that many third party softwares that can link into these retail trader platforms and provide you with extra capability that an active trader might want. There’s a whole industry of third party software that links to the more active trading platform from direct access brokers.