In the course of learning how to trade stocks online, you've probably come across lots of different websites and promises of vast riches.

Nonsense.

Trading, like any other small business, takes work. There are, however, several things you can do to gain an edge in your trading. The trading strategies used by successful traders are varied. No two wealthy traders approach the markets the exact same way.

The best way to build your own trading style is to listen to how other traders have been successful in the past and take something from each of them to form your own trading methods.

There are several important traits every successful trader develops:

1) Patience. Most traders when they begin trading full-time, treat it like their previous career where just working - doing anything, actually, is the goal. Not so in trading. You will sometimes need to wait for hours for the right trade to come along. Overtrading is a common pitfall for new traders and one that must be avoided. Never trade out of boredom or because you sense that other people are making money while you wait on the sidelines. Write down your rules and enter a trade only when the market matches your trading plan.

2) Trade Only With Your Comfort Level. For many traders, 100 shares is too large to start stock trading. I know of several successful traders who began with only 5 shares at a time. Only when you have started making consistent (albeit small) gains with 5 shares of stock should you begin to increase your trade size.

3) Always use stop-losses. Stop losses are orders you enter with your broker to sell your stock position if it goes down to a specific price. Initially you want to set your stop loss relatively close to your buy price so that if the stock price goes against you, you only lose a small amount of money. Risk management and limiting your losses early will keep you from losing all of the money in your account too quickly. Remember, the purpose of starting small is to learn how the markets behave in various situations. Only then will you be able to use wider stop-loss orders and give your trade time to be profitable.

There are two major ways traders look at the markets.

1) Technical Analysis. Traders who monitor price charts are called market technicians.  Many believe that everything that is known about a stock is in the chart, so there is no need to monitor P/E ratios, earnings reports or news.  The most simple way to employ technical analysis is to look for trending stocks.  Stocks that have been consistently going up or down in price are "trending."  Lines can be drawn above and below these trends to form channels. This is oversimplifying things, but many traders simply look for stocks in a channel and then buy the stock when it reaches the bottom part of the channel, hoping it will bounce off that line and continue its upward move.

Other traders use Fibonacci levels, Stochastics, and MACD as indicators of where future price may be headed.

2) Fundamental Analysis. Traders who monitor the news, earnings reports and other non-chart-based information are using fundamental analysis.  These traders will often scour annual reports, news sites and other information sources to determine the future profits and losses of a company and determine if it is a good buy at the current price level.

For many traders, a combination of the two methods, both technical and fundamental analysis, offers the best way to trade stocks online.