Tuesday, November 11, 2008

Is Online Trading For You?

Online stock trading opens the opportunities for stock market investing to anyone. No longer only limited to guys who hang around the brokerage house, online trading is available anytime, anywhere by computer. With so many brokerages offering online trading access, the costs of trading are within the means of any investor. Since online trading increased the competition among brokerages, the do-it-yourself trader benefits.

The novice trader needs to start by learning the basic terms of the stock market. A quick reference guide gives definitions. A beginner to online trading may be smart to pay slightly more in commissions to get assistance and support from a broker or subscribe to a trading information service. Saving commissions with the no-frills online trading firms is only a better deal after you understand more about trading. The low fee trading firms do not give any advice for buying or selling. Novice traders can lose more as a result of poor decisions than they might spend in commissions for support from a full-service brokerage.

The next step is determining a trading strategy for your online trading. A day trader commits hours daily in online trading. Do you have that much time to focus on trading? Or do you want the convenience of online trading but only plan to buy or sell occasionally? Then you have a long term trading strategy.

Online trading is particularly suitable for people who want instant access to the market and the ability to respond to price fluctuations. Whether day trading or longer term investor, online traders can maintain control over their investments whether in town or traveling. As a fail-safe provision against losing connection with a trading site, some online traders keep accounts with two or three online brokerages. Traders who travel frequently improve their connectivity by investing in broadband wireless access card to get instant internet to their laptop computers.

Online traders need to keep accurate records of online transactions since there is no stockbroker in the background keeping records for you. Those records will also be necessary at income tax time. Reviewing your trading records can also help spot mistakes to avoid or strategies to repeat.

With more experience in online trading, you can compare deals that reduce commissions. Some online trading companies offer a membership fee which entitles the trader to lower fees. Others reduce fees if the trader maintains a minimum deposit on account. Like frequent flyers on airlines, frequent traders are rewarded on some trading sites with free trading days based on trading volume. For the day trader this is worth checking out.

Online trading is convenient, inexpensive and easy to access. It’s a great way for novice investors to get their feet wet in stock trading from the comfort of home. Whether finance major, business owner, retiree or homemaker, online trading is for you!

By Mark Crisp

Check Out the Related Article : Global Forex Trading – The Easy Way to Make Money

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