Many brokers today offer advance brokerage system by saying they will reduce the brokerage.
Today I had talks with ventura securites. The guy said He will offer a trading platform on which he charges Rs750/- as advance brokerage which will be adjusted for commissions for every 3 months.
I do not understand how can we pay brokerage in advance without ever trading in the market. Also these type of advance brokerage systems forcibly commit individual for trading no matter whatever the market conditions are. He will be forced to trade just to recover his brokerage. Though brokerage houses claim large volume trades can gain this brokerage back, they dont even mention the real fact that large volume trades equally increases the risk account. In trendless market conditions this risk further gets magnified. Brokerages hide these real facts and they just try to induce to the trade. Brokerage houses know the fact that heavy volume trades attract high risk. Small loss on such a high volume trades can be fatal- wiping of your trade account. Some time you may also end up using their exposure which ultimatley settles for intrest penalties and so on. Brokerages survive and safe guard their brokerages in these ways saying and inducing to trade all the time-even if market conditions do not give the opportunity. It is the market that is giving opportunity to trade not the broking house.
These appear to be tricks of brokers who do not want their quote feed to be offered free for people. They try to collect their maintenance expenses through these advanced brokerages.
Never fall in these traps- Give brokerage only to what you trade, that too after the trade. Never commit for volumes.
good luck- Happy trading
Today I had talks with ventura securites. The guy said He will offer a trading platform on which he charges Rs750/- as advance brokerage which will be adjusted for commissions for every 3 months.
I do not understand how can we pay brokerage in advance without ever trading in the market. Also these type of advance brokerage systems forcibly commit individual for trading no matter whatever the market conditions are. He will be forced to trade just to recover his brokerage. Though brokerage houses claim large volume trades can gain this brokerage back, they dont even mention the real fact that large volume trades equally increases the risk account. In trendless market conditions this risk further gets magnified. Brokerages hide these real facts and they just try to induce to the trade. Brokerage houses know the fact that heavy volume trades attract high risk. Small loss on such a high volume trades can be fatal- wiping of your trade account. Some time you may also end up using their exposure which ultimatley settles for intrest penalties and so on. Brokerages survive and safe guard their brokerages in these ways saying and inducing to trade all the time-even if market conditions do not give the opportunity. It is the market that is giving opportunity to trade not the broking house.
These appear to be tricks of brokers who do not want their quote feed to be offered free for people. They try to collect their maintenance expenses through these advanced brokerages.
Never fall in these traps- Give brokerage only to what you trade, that too after the trade. Never commit for volumes.
good luck- Happy trading
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