Self directed trading is well suited for the discount broker in that such trading is not reliant on live broker assistance.
High competition means better online trading tools for you
Discount broker online trading platforms, tools and services keep improving; yet, prices you are charged remain constant, or or actually decrease!
All this benefits traders and investors who do their own research.
The high competition among stock broker firms is creating these advances among discount brokers.
Great Services - but still mainly Self Directed Trading
While its true that discount brokers offer ever greater online trading tools services as mentioned, it's still up to the trader or investor to do the screening, research and investing on his own - which is the meaning of "self-directed trading."
Since this is the case, you are expected to know how to trade stocks and limit risks before ever opening a discount broker account. The extraordinaryinvestor.com site is preparing you to be that wise and cautious trader.
Discount Brokers are for more experienced traders
In other words, the discount stock broker offers you a complete set of trading tools and the information required to use those tools.
Even so, the discount broker will not hold your hand, explaining everything to you, and helping you pick stocks to trade, as with full service brokers and higher end discount brokers.
So discount brokers cater to the seasoned trader... the trader who is comfortable making good trading decisions by himself, which is the meaning of self-directed trading.
Discount Brokers - Trend toward more assistance to the Newer Trader
An increasing number of discount brokers are actually offering ever more assistance for newer traders.
Many discount brokers are even offering educational tools and paper-trading accounts so you can practice trading on your account before placing actual trades.
Discount brokers are becoming more available to answer your questions by phone and/or by online chat - sometimes even for free! YES, some discount brokers have free phone assistance and free broker assisted trades. Try to get that with most full-service brokers!
Where discount brokers really shine are the cheap commissions and the quality online trading tools they offer to the self-directed trader.
You have completed this lesson on Self-Directed Trading.
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