On both the fronts, the investors and brokers, the count has increased substantially due to the internet revolution. One sees tremendous boost to online trading in shares. The number of listed companies is in thousands. The investor has choices but the problem is in exercising choices. The increase in the number of online brokers has created competition in this profession which works out to the advantage of the investors. You find brokers are willing to discount the trades at unbelievingly low prices. In this situation, the issue before the investor is to get the finest service level without any overpayment.

To be eligible to do trades as a broker, in the U.S., one must complete two licensing examinations called Series 7 and series 63. Then one is legally eligible to solicit business from you, advise you and execute transactions on your behalf.

Notwithstanding this legal eligibility to carry on the trading in shares, an investor needs to know that a broker does business to earn profits. The stock brokerage house has to maintain an establishment and bear all the expenses that go with the set up of a modern office. The broker's job is to carry out your instructions and do transactions whether they end up in profit or loss. He is paid commission for each trade.

Life is not easy for brokers as they deal with human beings who always have expectations of profits from trades. Human tendency is to blame the other for one's failures. There are two types of stock brokers. The full service share broker and the discount share broker. The former offers you advice and hand holding and the later executes your trade orders and constantly makes efforts to solicit more business from you.

Apart from the best credentials of a broker, you as an investor need to take the basic precautions that one must take while doing the business. The constant endeavor of any broker is to increase the volume of business. It is natural for one to employ innovative ideas to promote one's sales. As an investor you should be in a position to distinguish between the normal sales operations and a ?boiler room? sales operation. In the former case, your broker introduces you to shares of certain companies which he considers good. In the later case, the tone of the communication is more persuasive and emphatic. These operations are meant to fleece the gullible investors by pressurizing them to buy the shares that have little intrinsic merit. Once they persuade the investors to buy in and push the price of the share up, they sell their position at the opportune time and you are left with the share that is worthless. They are experts in subverting the provisions of law, close down offices and open another with a different name and legal entity.

The main criterion for choosing a stock broker depends upon the level of services required by you. If you are a passive investor?one who is not willing to do homework for selecting investments and do trade?you need to go for a full service share broker. If you go for long term investment plans, in which case the broker has limited role to play, discount broker is suitable for you. Take advice from your friends and acquaintances as for the suitability of engaging a particular broker. Word-of-mouth recommendations are more credible than the researched findings through the internet etc.

Some day traders set up more than one account, to put through their voluminous transactions. If they have problems in dealing with the broker for whatever reasons they have the backup plan ready. Speed is the watchword in day trading, and some brokers waive the brokerage if the order takes more than 60 seconds to execute.

Take stock of your investment requirements before engaging a broker. You can always switch to another broker if you are not satisfied with the services.