The first thing you need to do before you begin trading is select a broker. The terrible thing is, this is one of the most confusing things you will ever do. Here are some guidelines that will help determine what factors are important and how to make the correct selection.

The most commonly used Internet services are 'discount' brokers. They are designed for do-it-yourself investors that manage their own money without guidance from a professional financial advisor. These brokers will make trades for you at a lower price because they provide very little in the way of service. In the past, an investor could expect almost no additional information from these low-cost brokerages but companies like E*trade have changed the industry by providing research tools, analyst reports and the latest in on-line trading technology. They also offer access to IPO's ('initial public offerings'), a product that previously was unavailable to the average investor.

Most of these Internet trading services require a minimum deposit of $2000 to open an account and they are generally insured by the same agency as full-service brokers. (The government-sponsored Securities Investor Protection Corporation covers accounts up to $100,000 in cash and $400,000 in assets.) Discount brokers trade in all stocks that are listed on the major exchanges and they also offer mutual funds, foreign stocks, bonds and options.

The primary complaint with discount brokerages is their lack of service. The best 'buy' and 'sell' decisions are useless unless you are able to act on them and cheap commissions are meaningless if you can't close a trade or speak to a representative when the need arises. Another area of concern is 'efficient' order execution and many investors say this is the most important quality necessary in trading.

One way to find out how well a broker performs these functions is to ask other traders. Most financial websites have message boards where people can relate their past experiences and attitudes in regard to a particular subject. Use these chat sites to narrow the field before completing the final research on a prospective company.

The ultimate goal is to find a broker that gives you everything you need at the lowest possible cost.