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Online Trading

Introduction to Online Trading

The internet is changing the way investors trade stock enabling them to conduct online trading from nearly anywhere in the world, at any location, and now independent of a brokerage firmís fees and limitations. If you are interested in trading stock online, there is a lot of information regarding trading and investing that you need to know. Online trading is changing the way the investor will practice stock trading, and is also changing the financial industry.  This article offers a sneak peek into how to get started with online trading in the stock market, including various investment strategies, and tips for selecting an online brokerage firm.

Before you get started in online trading, you must select and online broker.  The stock broker is responsible for executing your trades and storing your money and stock in an account. There are different levels of services available by brokerage firms, and you will probably want to go with a discount broker. Most investors prefer online discount brokers rather than a full-service broker. When you are looking for a broker you should keep many things in mind. You first must decide how much money you plan to invest. Most firms require a minimum amount of money to set up an account to conduct online trading. You will also need to decide on your level of trading experience in relation to how much guidance you will need. Be sure your broker is licensed and do research on the firm before committing. You will also need to determine how frequently you plan to make trades and what other types of services you will want. Different firms charge different fees per trade for online trading.

Online trading requires that you develop an investing strategy that works for you. There are long-term investors who buy stocks to hold for one to two years, and then there are mid-term investors who may buy and hold stocks anywhere from 30 days to 6-months.  There are also short-term traders who trade very frequently on a weekly basis, and there is the concept of day trading, in which the trader buys and sells stock every day. Online trading follows the principals of technical analysis and the development of technical analysis tools by the investor is crucial to successful trading

There are other online trading investment options available in addition to buying stock and selling stock. It is of course dependent on the services that your brokerage firm offers, but several firms allow investors to participate in trading options, mutual fund investingstocks and bonds, and in trading futures. To each type of online trading listed above requires an abundance of knowledge that takes many, many hours of investing experience and education.

Online trading may give you an overwhelming, possibly frustrated feeling. Donít worry you are most certainly not alone!  Each investor goes through the same feelings of greed and fear and must learn to overcome those feelings in order to be among the successful traders. Keep up to speed on stock research and investing techniques and strategies.


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