Why Not Select A Broker Who's
with a Well-Known Discount Firm

Namely, a brokerage firm's use of its own salaried employees is preferable to using "outside" floor brokers. This is dead wrong! It is always preferable to use a brokerage firm that does business with independent pit brokers. The fact that some brokerage firms use its "own people" in the pits is the very reason why I would never open an account with them.

Think about it logically for a minute .... a salaried employee is merely doing a "job" albeit a stressful one. At best, he'll do an adequate job (why should he kill himself to get you an extra tick?) An independent pit broker on the other hand, has a personal and vested interest in giving out good fills. His livelihood depends on having a large deck of customer orders to fill - if he does a lousy job, the brokerage firm can simply pull the deck away from him and give it to another independent pit broker.

Just as with anything in life, there are good independent pit brokers and there are bad independent pit brokers. If you suspect that your firm is using one of the "bad" brokers, put pressure on them to sack the broker (pull his deck away) and use a better one. If they are unwilling to do this, and the fills don't improve ... vote with your feet and move your account. If it's a salaried employee that is giving out the bad fills ... it'll be much more aggravation trying to get anything done about it.

When it comes to choosing a broker, I have two golden rules: 1. The firm must only use (quality) independent pit brokers, never its own salaried employees; 2. The firm must not be one of the well-known/heavily advertised discount firms that cater primarily to small individual retail customers. Find a firm that caters to mainly larger clients (this is not so well-known to the small trader) that may do a bit of retail business "on the side." The difference in fill quality will amaze you. In trading, you have more likelihood of succeeding if you separate yourself from the masses. The same philosophy will serve you well, when finding a brokerage firm!

Advice From A Trader With 30-Years
Commodity Trading Experience

I have tried for 30-years to trade the commodity markets. I have read numerous books on the subject and bought several commodity trading systems and lost at least $300,000! Do you realize what that amount of money would have been worth, if I had been lazy and just bought savings bonds with it? I have felt bad, depressed and worthless because of all of these losses, because otherwise I am a very frugal person.

My problem! I would not use stops. I could not admit to myself that I would be wrong at least 5 times out of 10. I wanted to, and thought it was possible to make pure cash with no expenses. The secret of my enterprise is keeping the losses small, so that you can come back and try again! And guess what! You can only take $3,000 a year of your trading losses off of your income tax! Do you want to pay a similar price to learn how to trade?

Yes, I am still trying. I do not want your sympathy, but I would like to warn the beginners that trading for a living may be impossible for some people. Trading is the toughest game there is. After all, the smartest people in the world are your competitors, and one of them must loose before you can win. Only one person in 20 can make money at any business.

The market is like a conveyor belt, that has $1,000 bells on it, and it is passing right in front of you, but you don't dare try to pick one of them off! Profitable commodity trading is similar to deciding that you will assemble your own TV set, by using component parts that you can buy from the surplus store. Only commodity trading is more elusive, because there is no written or absolutely correct way to trade it and win every time. Profitable trading requires lots of time and discipline.

Successful trading is not achieved by vowing that you will never make a loosing trade. In fact, this could be your reason for failure. In order to succeed, you must be flexible enough to accept a small loss when it occurs and stay with a profitable trade. Sorry, but a positive attitude will not replace knowing what is really going on.