Steadfast FinancesA Short Guide On Trading Online - Steadfast Finances

A Short Guide On Trading Online

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Trading online is a form of investing online and it is the process by which individual traders buy or sell the assets like stocks, Forex, commodities etc. over an electronic network with the use of a Forex broker. Since late 1990s this form of financial trading has become a norm for the individual traders with a number of brokers offering services worldwide through the online trading platforms.

Before the arrival of trading online methods, investors needed to call up a physical broker who placed an order over a telephone. The broker’s firm then executed the order and their system was linked to exchanges and trading floors. In US the online brokers are referred as discount brokers. The popularity of trading online is attributed to the fact of speed and ease of order entry online. The fees and commissions are also lower than the full service brokerage firms and this adds a lot to the popularity of trading online.

What are the tools and platforms used in online trading?


A trading platform operating online is provided to the traders by the online brokerage firms. This platform acts as a hub where investors can buy or sell assets and perform other activities related to trading, all online. There are many additional things which can be added to the platform including tools to track and monitor the orders, research tools, real time quotes, up-to-date news releases and much more. Often many other things like back-testing strategies, signals, full in-depth reports and other tools are provided in advanced platforms. The platform for trading online is robust and it brings the entire trading world within the reach of a trader in just a single place. These platforms are provided for free by the brokers or sometimes they may be charged due to advanced features offered to the users.

Benefits

  • You can manage your entire asset portfolio from a one single place
  • You have more control over the type of transaction you want.
  • The commission costs of trading are significantly less than those taken by physical brokers.
  • A big number of tools is provided to the traders through online brokerage firms like financial tools, news, live quotes, high quality research reports etc.
  • The access to the online accounts is offered 24X7 to the online traders
  • It helps to manage your account from any part of the world through online trading system. It does not matter where you are. You just need a computer device and an internet connection.

Disadvantages

  • The first time investors may be overwhelmed with the technology experience.
  • There is no mentoring relationship which used to be there with a trader and a physical broker
  • The novice traders can make mistakes if they are not well adapted to the technology
  • There are risks of internet frauds when you perform trading online

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Posted by CJ   @   14 March 2016 0 comments

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