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Shares: How to choose a stock broker and use direct market access
- Created:
- 23 April 2008
- Updated:
- 24 April 2008
- Written by:
- Dominic Picarda
If you want to trade shares, you'll need to choose a stock broker or set yourself up with direct market access (DMA), which allows you to plug straight into the stock market's trading system. Be aware that DMA is only really suitable for experienced investors who trade frequently.
For the buy-and-hold investor, using a stock broker is likely to be more cost effective. But which one? Our annual guide to UK stock brokers
compares the cost and service of dozens of brokers, whether you want an online stock broker, a stock broker who offers advice, or a broker who will still trade share certificates. Access the Investors Chronicle stockbroker survey.
Direct market access is hugely powerful, but you need to know what you're doing.
The first thing to understand is the difference between market makers, level 1 and 2 pricing and how DMA works.
Then you can look at how to make sense of market dynamics and use different order types to take advantage of them.
You can also try out DMA using the London Stock Exchange DMA simulator (opens in new window).
MORE ON TRADING SHARES:
: Using stock screens, how to read financial statements and how economic events affect stock markets.
: All about the Alternative Investment Market, trading international shares and unusual products such as Pibs and Culs.