Hello; I'm a novice daytrader and i want to get away from my generic online broker. I researched a little and found out that I can use one of any number of platforms that connect directly to markets / ecns. What I am not fully understanding is whether or not I still use a broker of some sort? and, if i'm not using a broker at all then does my trading platform / software have some bank account information programmed into it to automatically move money back and forth from an account when i buy and sell? or do i wire money to a 'market' account of some sort and the $ amount is displayed in my trading platform? thanks for your help
Direct access is available on many brokerages platforms. It allows you to submit your order through several ECN's of choice rather than going through the brokers market maker who will either fill you with shares he owns at a discount to your order, or attempt to purchase shares at a discount to your order and sell them to you with a small profit. You need to get on a per-share pricing if you want to trade with direct access because you sometimes will get a partial fill and if you are on a flat rate you will get charged for each segment of the fill. For example if you were using Schwab with a flat rate of $10.00 and route through an ECN to buy 100 shares of company XYZ and the order is split three ways. 10 then 40 and 50 then you would pay near $30.00 in commissions. If you are new to trading you really should get some training before you start using direct access, or day trade 4:1 margin. Using leverage can blow up your portfolio in no time. I have heard that the Trend fund guys actually mentor new traders through web school or something like that. Hope I helped