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Most entry level traders would hire online brokers to handle their day trading tasks. Online brokers, after all, are accessible and less expensive. All you need is a credit card and an internet connection to hire online brokers The only problem with online brokers is the inherent fact that order execution can become relatively slow through them. Speed is of the essence in trading. A trader should have a system that can order and place trades on the dot if he or she wants to succeed. Upon recognizing this fact, an experience trader would usually turn to direct access trading systems instead of ordering through online brokers. Direct access trading can make things a lot easier when you are getting into the stock market for beginners.

Immediate execution of orders is the key factor for day trading success. Direct access trading eliminates the need for a middleman, which in this case is the online broker. Once the middleman is out of the picture, traders can save up to several minutes of their precious time. This is because direct access trading, as the term implies, allow traders to order directly from a client or a market maker who is actually working on the floor of the stock exchange. Traders can save time since the orders are no longer executed by online brokers. One you’ve mastered the stock market basics things get easier quickly, then you can move onto things like beginners forex trading.

It is also important to consider the fact that online brokers might also work directly for market makers. This means that online brokers do not choose their market makers in terms of the price that they offer when executing orders. Instead, they would trade with their clients to earn commission. This is a practice termed as “payment for order flow” wherein online brokers earn rebates from routing trades to a certain market maker. With direct access trading, the trader can choose the market maker that provides the best price.

Direct access trading is relatively more expensive to online brokers due to the probability that online brokers are receiving payment for order flow from the market maker which ensures hefty commission rates. Consequently, they can afford to offer rock-bottom rates to traders. On the other hand, commissions from direct access traders are scaled depending on the number of trades a trader execute for a specific time period. Commission rates for each trade may fall within $15 to $35. In addition, most direct access trading system providers would charge for the use of their software. This additional payment falls within $250 to $300 per month. Some companies waive the software charges if the traders executed 50 to 3 trades per month.

Direct access trading systems available in the market vary based on commission rates, accuracy and speed of order execution. Professional traders have to be vigilant in choosing the perfect trading system based on these key factors.