You get what you pay for...
Written: Jul 24 '00
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Product Rating:
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Pros: Usually the trade gets done with no problems
Cons: When there is a problem it is a biggie
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| Sanglikeabird's Full Review: DLJ Direct |
If often find that the complaints I hear about online trading aka investing aka tossing the dice, stem more from a lack of experience on the users part than from anything actually being wrong.
I am so amazed that people spend more time purchasing a $100 dollar tire than they spend trying to learn how to make a $10,000 trade. Before I get into what is wrong with DLJ Direct let me get into what is wrong with the users of all of these systems.
Here is my top list for what users do wrong when trading online.
1. Know how it works! Read all of the directions. Practice on paper! Sounds like a simple thing to do but gosh we always like to give the bike a little ride before tightening all of the bolts don't we? I have been witness to novices not hitting the confirm order button to actually send their order on more than one occasion. I have watched people try to cancel orders which have already been executed. I have watched people place the same order three times and wonder why they now own 30,000 shares of Jacks Widgets Inc.. If there is one time you need to read the directions and follow the rules it is when using an online brokerage.
2. Before you begin know the rules! A market order is just that. It is your order to purchase a security at ANY price the security happens to be trading at when your order hits. If a stock is trading at 5 and you spot it moving to 6 remember 10,000 other people may have also spotted the move. When your order is number 9,999 in line the price may be 8 by the time your order is executed. By the time you get notice that your order was executed at 8 the stock may be back down to 4. When you place any trade write the time down that the trade was placed. If there is any question as to what went on you can check the time of your trade against the tape. Before you trade find out the amount of time your brokerage allows for trades to be executed. I have questioned the execution price on many trades and I have always won because I had the time I placed the trade and had the rules! A trade placed late because your "house" was backed up is different from being number 9,999 in line.
3. Know when to cut losses. I have seen more blood baths because people would not, could not, bring themselves to take a $1,000 loss. Instead they waited until it became a $10,000 loss.
4. Know what kind of account you have. Know what a margin account is and what can be done with it. I have never thought a margin account was a great idea. People forget it is real money until they have to write a big check.
5. Know if they answer the 800 number before you need them! If you cannot get anyone on the phone to help you find another broker.
6. Have two sources of quotes and 2 ways to reach your broker. If you are trading more than 1 trade a day you need 2 sources of quotes at all times. You also need 2 ways to place your trades. I have seen people place buy orders and then unable to place sell orders because their online trading company was down.
OK now that I have all of those things clear I am ready to talk about DLJ Direct.
First their quote system stinks. Their best is a system called market speed which gives you the bid/ask/size in real time. They have no level 2 which is a must for day trading. I have seen more than one time when Market Speed fell off of real time and they gave you no warning that what you were looking at was now delayed quotes. (but I knew that because I had a second source of quotes!)
Their 800 number can be your worst nightmare. I have held for 35 minutes more than once. If you want an answer to a question be prepared to do follow up calls. If you cancel an order you must never assume it has been canceled until you get confirmation from them that it has been canceled.
Now here is the really bad news. From what I have heard and what I have seen they are better than many of the other online brokers. Face it folks you get what you pay for. When you buy and sell securities with a real person and you are paying a few hundred dollars (or more) a trade you are usually going to get a few hundred dollars worth of service. When you are paying 19.99 a trade you get 19.99 worth of service.
Recommended:
Yes
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Epinions.com ID:
Sanglikeabird
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Member: Ms. M
Location: Danbury, CT
Reviews written: 35
Trusted by: 13 members
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