It wasn't that long ago that average people like you and I simply weren't allowed to trade stocks. You had to have a middle man in place who was licensed to trade stocks on exchanges all around the world, and while most people would agree that having a middle man in place is still the safest and least risky way of doing it, the Internet has allowed pretty much everyone to become their own stock broker who can execute trade after trade all day long. Many people don't realize that there is a third way to trade stocks, too. Let's take a look at the three most popular ways people trade stocks in today's financial world.

Perhaps the most secretive way people trade stocks in today's financial world is directly with the companies themselves, bypassing stock brokers, online trading websites and even stock markets. Not every company that offers stock allows the direct purchase of stock from them, and as a matter of fact, the overwhelming majority of companies don't. For those that do, however, it can be a hassle free and extremely simple way to get the stock you want without overhead or trading fees. Most people are familiar with this sort of stock purchasing done via employees, and that is the most common method used; however, some companies allow those that already own stock in their company to purchase more directly through them instead of through a third party broker. While this is likely the most affordable way to purchase stock, it can be difficult to manage separate investment accounts with each individual company that you hold stock in. It can be an affordable way to invest, but it isn't very organized.

The most common way that most people buy stocks is the same way your father bought stock and the same way your grandfather bought stock: through a traditional full service stock broker. Today, many people believe that they don't need full service stock brokers since they can now open up an E*Trade account and do it themselves. They say that the fees are less than a traditional stock broker (they usually are) and that they don't have anyone telling them that their stock trade ideas are going to turn south (there isn't.) But it is exactly those reasons why you should use a traditional stock broker and not an online trading account.

While it is safe to say that stock research information is much easier to come by today than it was 50 years ago, unless you have made stock research your full time job, your broker knows more about what's going on than you do, and they can tell you when you're about to make a big mistake. Not only does a full service broker help you manage your stock trades, they also help you manage your stock portfolio so you can stay on the straight and narrow when it comes to your long term investments. They understand how impulsive most of us are and they can help remind us that our long term goals are the most important thing, even when we want to dump our life savings into the latest uber-fashionable tech stock.

Using an online stock trading company is the newest way to trade stocks. While online trading is a hassle free stock trading method, it doesn't give you a chance to really analyze the decisions that you're making. Online stock trading is only recommended for people who have years, or even decades of investing experience. Most of these sites simply don't give investors enough information on each trade they propose, so many traders are flying blind.