- Personal Finance»
- Understanding Finance
About Online Stock Market Trading
About Online Trading
Before the internet, people used to have to go to a brokerage firm to be able to invest in the stock market. Even after the internet came out you still had to go to these firms to make the transactions between broker, firm, and the world market. Now with websites like E-Trade and Scottrade you can cut out some of the broker fees and make trades for seven to ten dollars. Essentially the internet has made our lives easier by providing services that we can attend to from our living room or home office, in our pajamas. Though I enjoy getting out of the house more than I enjoy solitude, I still find a fascination with ease of living through internet sources.
Online stock trading tips
Now about online trading; there are several benefits to online trading through sites like E-Trade. For instance, having instant access and intimate knowledge of your account standing and balance is a far cry better than having to wait for a statement or having to call your broker. I tend to obsess about things so this aspect for me is so much better than having to wait. You never have to talk to a broker if you choose not to and can make all your transactions over the internet.
Like I said earlier fees and commissions with online trading tend to be lower and trading is offered online by many brokerage houses. Although online trading is a good deal, there can be some downsides.
New investors need to be extra careful when looking into the stock market. Self-education is a very important aspect of trading but actually speaking with a broker can be beneficial to you in the long run. This is especially true if you don’t understand how the stock market works. It may or may not surprise you but stocks in the market can fluctuate and turn rapidly, so be careful and take your due diligence. Knowledge is power and with it you can conquer all.
While you’re searching for a broker you may want to pay attention to whether or not you can contact and speak directly with a broker or not. Being able to do this can be helpful in future situations. As far as seeking and finding a brokerage house, I would recommend finding one that has a proven track record and has been around for awhile. The best bet is to find a brokerage firm that now offers online trading. Patience with this will only benefit you in the future so make sure you learn as much as possible before considering going live. You should also consider what your goals are and why you want to invest.
Some additional reading material
Define What Your Investment Goals Are
When starting out, like stated earlier, you’ll want to take your time. Avoid jumping in with both feet into a single stock and only use money you can afford to lose. When you go all out you will have a low chance of success. Being successful is the key and it requires a small amount of skill, skill through which only experience will teach you. You can read everything there is to read about investing but until you do it you’ll learn little practical knowledge. For instance the gut feeling that it is time to get out of a stock comes from experience.
Defining your goals will be the most important thing you’ll do as an investor, aside from learning more about investing and how it works. Your primary goal should be what you want to accomplish with your investments. Do you need this for retirement, college, or just want your money to start working for you? Whatever the case may be, be sure to clearly define these goals before you contact a broker/brokerage house. Knowing your goals will help you make structured decisions with your investment, like where to start, when to get aggressive, or whether or not you should be aggressive.
Just as vital as defining your goals, you should also be realistic with those goals. No one single person, that I am aware of, invested on Monday morning and was rich by Tuesday morning. Becoming rich through investments is absolutely possible, but it takes time and significantly more than 24 hours. However, if getting rich quick is your cup of tea then you will need to define that goal also. There are high yield, short-term investments out there and sometimes they do pay off but, and this is huge, they are extremely risky. Again don’t risk more than you can afford to lose.
In these goals that you have defined previously, there should be something about talking with a financial advisor. Usually the broker will have advice to give you on what investments you should pursue but I would still strongly recommend the advice of a financial planner/advisor. This person will be able to give you an idea of how much will be returned and when, also how long it will take to reach your end state goal with each financial plan.
Investing is a whole lot more than just placing an order for a stock with a broker, it requires time to research and make the best decision possible for your goals. In the end I hope you take your time with the investment process and I also hope you have much financial success with those same investments.
© 2011 by Wesley Cox. All rights reserved. Copying without permission is illegal and will be prosecuted.