"Is he worth it?" Have you ever asked yourself this question after doing a transaction with a full service broker? If you could make a list of things he must do to earn your business, what would they be? There certainly IS a point where he is worth his salt. See if these ideas make sense for you.


Another thing to consider is trade order entry errors. A full-service broker's job is to become familiar with you and your account. The chance of putting through an order error is greatly reduced when two people are involved. For example, a common error is when short, someone will try to liquidate by selling. I've seen this mistake over and over. They end up with a double short position. (When short, we liquidate by buying)


The bottom line is we can wipe out years of discount commission savings with one big error. It has happened to me when using a discount desk as you will read about in my articles. I have never had an error go through when trading full-service. Much depends on the skill of your broker, of course.


There's another important reason to have a good broker. He should teach the client courage. We need to embrace risk in order to get an edge in the market. A broker should show a client how to hold a naked futures contract or sell naked options with confidence. It's like showing someone how to climb a tower. It's scary, but it can be done with proper guidance.

By advising a client to buy and hold "safe" options until they erode worthless is not earning his commissions. He needs to teach the client strategies to take on risk and still survive the bad times. This is a risk business with no guarantees. Learn how to balance opportunity and risk to your own liking with guidance.

Let's discuss one more subject before we close. We need to eliminate potential trading mistakes that are personal and habitual to us. We must slay our own dragons. This means staying out of futures markets where we usually lose, regardless of current price action.

For example, one broker friend mentioned a successful day trading client who does well in the day. However, he just loves to enter the financial markets himself at night, trading the currencies and the E-mini. At night, a high percentage of the time he makes losing trades. Many times he could have gotten a far better price by entering on the open the next morning. My friend felt if this commodity client could just eliminate these overnight emotional trades in favor of daytime trading, he would be very profitable. But the client just loves the night action and continues.

Regularly we need to clean out the stuff that pulls us down. Take a look at your own futures and options trading habits and decide which ones feel good to do, but are costing you money. You need to find your own best techniques and kick out the bad ones. Also, things that work for others may not work for you. Ask your broker if he sees a trading problem or pattern you need to correct. It pays to feel comfortable with your commodity futures broker's opinion and his method of selecting trades. Having this edge is obtainable and puts you above the other futures traders that trade with conflicts.

Having a distinct bullish or bearish opinion or scenario of every market you follow is a sign of the weather vane syndrome. It's OK to be uncertain and stay away until your favorite set up takes place. Be very selective and have good reasons for identifying a high probability, low risk market entry to increase your market edge on the competition.

There are many trading areas we need master. Remember, in every area, we don't have to be perfect, just better than most! Just thinking about it puts you in the public minority, believe me.

Good Trading!


There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.