Everything you need to know about online stock trading.

Online Stock Trading Guide

Guide To Online Stock Trading and Investments

The Internet revolution has affected almost every part of the fabric of our lives including online stock trading. Although it may seem fast and easy, there are some dangers to trade online. Chief of these is the fact that it is almost too easy to execute a trade. Like casino chips, the numbers up on the screen do not seem like "real money" but it is. Nothing can make it plainer than checking your account balance and seeing it empty.

Getting started

Learning to use the new online trading tools provided by your broker doesn't take very long. In a couple of mouse clicks you can make a decision that can cost, or make, you many thousands of dollars.


Brokerage fees vary among the different companies. Brokerage houses such as Ameritrade, DLJdirect, SureTrade, Datek, Charles Schwab, E-Trade, and others seem to be regularly engaged in price wars to lure new online investors. WHile the average fee ranges from US$7 to US$9.99, there are others offering fees as low as US$1.99 per trade if you are a heavy trader. Keep in mind that fees alone are not a good reason for selecting a broker. Other issues such as speed of execution, ability to contact a real broker when you need one, and other service issues play just as important a role.

What does it take?

Well, all you really need is an online brokerage house, a computer, internet connection, and some money to invest. In reality, you need a lot more however. You need to understand the rules and laws of investing, the psychological conflicts that affect traders, and general knowledge of economics and how it affects the stock market. If you don't take the time to get some basic investments education, then it is likely that you will end up being part of the statistics that say more than 80% of all online investors lose money right form the start.

If you want to be part of that other 20%, the ones who make money, then you need to exercise judgment and become disciplined in the art of online trading.

Your investing style determines, to a great degree, whether you will be a winner or loser in the game. Will you be a long-term investors who buy stocks and holds them for a year or two? Or maybe you will be a mid-term investors who turns over a stock in anywhere from thirty days to six months. Short-term traders trade on a weekly basis, and day traders buy and sell every day.

Experienced investors study stock charts, review company announcements, look at the profit and loss statements, and examine other financial indicators. It work just like anything else that makes you money, looking for hidden trading signals that may reveal a major opportunity.

The Pros And Cons To Online Stock Trading

The ability to trade stocks online, via the Internet, is a fairly new phenomenon that has provided the opportunity for literally millions of new investors to diversify their investment strategy, both long-term and short-term, and have the chance of investing in stocks listed on almost every single stock exchange around the world.  It has not, however, been without both its detractors and its failings.  Indeed, many of the positive aspects of trading stock online can equally be seen as a failing of the system.  In the following articles we try to set out what some of the pros and cons to stock trading online are, along with a brief 10 step-list of how you should conduct your online stock trading if you wish to avoid some of the failings in the system.

Be sure that you are prepared and only invest money that you can afford to lose. Online trading can become your worst nightmare if you start betting the mortgage money. Otherwise, with patience and a goal towards ongoing education, you may find that this is a good way to add to your wealth.

Recommended Resources ...

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