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Stick with blogs to get the scoop on what commodity futures brokers are trading

One of the best ways to learn what commodities futures brokers are trading is to look at blogs. A future broker blog might not have articles that focus on the futures market as a whole. Instead, you can read why these online futures brokers are buying certain commodities and why they're ignoring others. Then you can post your own comments and read what others are saying.

I recommend: Ira Epstein and Company Futures, which is a registered commodity brokerage firm, has a blog that focuses on the commodities that it likes. The commodity broker blog doesn’t feature articles. However, you can read posts from other users. Cannon Trading also features analyses that commodity brokers post. You’ll likely read about trading ranges or study charts of futures.

Read about futures brokerage firms in magazines

You don't want to overlook online magazines. Not only do they feature stories on the commodity industry, but you can read about Chicago futures brokers, for example, including executives' profiles or how many employees work in the offices. In addition, magazines will have advertisements of discount futures brokers.

I recommend: Futures Mag is one of the leading magazines that cover stories on the industry. Here, you can also read about top ranking commodity brokers. Stocks, Futures and Options Magazine also focuses on the futures industry.

Read about trading brokers in newsletters

Newsletters are likely to focus on specific areas that you won't find in magazines or blogs. You can read about the trading brokers' trading systems. If you need to improve on developing trading ideas or trading methodologies, newsletters by commodity brokers can provide this insight.

I recommend: The Joss Report produces a newsletter that many futures brokers use to come up with their own trading ideas; it is designed to help you come up with a plan for the trading week or month. You’ll have to subscribe to the Joss Report. Odom & Frey is another newsletter to consider; it is the product of a veteran commodity broker. Like the Joss Report, you’ll have to subscribe to this newsletter.

Helpful advice for making the most of this Guide

• •  Use the Internet to find seminars on futures brokers. This is another great avenue for getting the latest news and trends.

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Find out what trading platforms the futures brokers use

When it comes to deciding on trading platforms, you want flexibility. Does the commodity broker offer wireless or online trading? If it's online trading, for example, does the futures brokerage firm allow you to execute a trade from any computer? Does it offer real-time prices? Does the commodity broker offer financial and technical analysis? Perhaps you don't want to execute a trade, but instead you want to perform a simulation trade. A good commodity broker should offer this feature. After all, you'll be risking a significant amount of money. One factor you'll need to consider is that prices will vary depending on the features you want.

I recommend: Look at Lind-Waldock’s website. Lind-Waldock is a Chicago futures brokers firm that offers 3 pricing levels: Lite, Standard, and Professional. Choose one that will fit your budget and trading needs. Like Lind-Wald, ExpressFutures.com, a discount futures brokerage firm, offers 3 trading platforms that you can use.

Ask futures brokers how quickly they will execute your trades

Timing is everything. Futures prices can change in just a second. If you use a trading system that is based on buy-and-sell signals, you need a reliable futures brokerage firm that will execute your trade immediately. You will need to have access to real-time futures prices. That way, you can time your buy or sell decisions. You will want to ask the futures brokers how they route their trades. Another question you'll want to ask is their percentage rate on executed trades.

I recommend: Look at both ClearTrade Commodities and Interactive Brokers LLC. ClearTrade’s MTRADE PRO gives you real-time trading access. You can also trade on multiple exchanges. Interactive Brokers uses IB SmartRouting that searches for the best price and dynamically routes your order to find the best execution.

Ask commodity brokers about commission structure

You need to check a future broker's commission structure. Some commodity brokers can charge you higher rates because you've decided to hold trades overnight. Commissions vary at different futures brokerage firms. Some charge flat rates. Depending on how frequently you trade and your account balance, futures brokers will charge you less.

I recommend: NobleTrading Inc’s website has a breakdown of the commission for futures. Heritage West Futures Inc. gives a good explanation of how its commission structures work.

Helpful advice for making the most of this Guide

• •  Make a list of services of what futures brokers will offer. Don't just base your decision on discount commissions.

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Scrutinize what the profession of a futures broker entails

Before investing time and money into training, it's imperative that you under the industry process, occupational outlook and the various steps to launching your futures career. All these factors should play an important role in deciding how to allocate your company's training and education budget.

I recommend: Evaluate the occupational outlook that's available at the Bureau of Labor Statistics. Review the tutorial on how to become a futures broker from the AAA Learning Institute. Assess the industry requirements for a futures broker at the National Futures Association.

Enroll in futures commodity brokerage training courses

The basis of any good financial education is the crucible of classroom learning. In this environment, you test theories and expand your industry knowledge without putting you or your company's money at risk. These classes are requirements for certification and a virtual must to keep expanding your future brokerage knowledge base.

I recommend: Inspect the course offering at Alaron Futures & Options, National Futures Association, and Chicago Board of Trade. The Chicago futures brokers is a training curriculum specifically for trading on that futures exchange.

Speak to a representative at each of the commodity futures brokers industry agencies

When you trade futures, it is an obligation to deliver an equity or commodity on a certain date. Because of this obligation, the licensing is an essential part of this profession. These institutions also offer training in the trading brokers industry. In addition, they are excellent resources to connect with other futures brokers within the industry to attain knowledge specific to the profession that you may not learn in textbooks.

I recommend: Examine the training and educational resources available at the Financial Industry Regulatory Authority, Institute for Financial Markets and the Commodity Futures Trading Commission.

Helpful advice for making the most of this Guide

• •  Be sure to verify that any futures broker training entity has the proper certification before you enroll in any course. While most are reputable, some unlicensed companies out there would not be a wise educational investment.

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Broker

A broker is the person who is paid a fee for buying or selling orders for their customer. There are three types of brokers in the futures markets: Floor Brokers, Associated Persons and the Futures Commission Merchant.

I recommend: Take a visit to MF Global Ltd to read more on brokers and other basic futures terminology.

Futures commission merchant

A futures commission merchant, or FCM, is a person or a group that either solicits or takes orders to buy or sell futures while taking money or assets from customers in direct relation to the orders. To be a futures commission merchant, you must be registered with the Commodity Futures Trading Commission.

I recommend: At RJO Futures, you can get additional information on futures commission merchants and other future brokers key terms.

Commodity Futures Trading Commission

The Commodity Futures Trading Commission, or CFTC, is an agency that was formed in 1974. The CFTC watches over the futures and options on all U.S. futures markets. The CFTS is an independent commission that is made up of five Presidential nominated members who were subject to Senate confirmation.

I recommend: Go directly to the source, the U.S. Commodity Futures Trading Commission, for more information on this key term.

Spread

The spread is the difference in price between two closely related markets or futures commodities.

I recommend: Read more about spread at the University of Missouri site that offers some free commodity futures terminology.

Associated person

The associated person, or AP, is the person that takes or solicits orders on behalf of the futures commission merchant. They can also supervise people who are taking or soliciting orders.

I recommend: At the website for the Texas Cooperative Extension at the Texas A&M University System, you can find additional information on associated person.

Floor broker

The floor broker, or pit broker, is the person who is in charge of executing the orders on the floor of the exchange. The reason they are also called pit brokers is because of the area where the brokers stand to execute orders. It resembles a pit because there are steps that lead down into it.

I recommend: At the Center for Futures Education, you can read more about the role of the floor broker, as well as many other futures broker key terms.