Saturday, June 27, 2009

Online Stock Trading - How to Trade Stocks

The transition of traditional brokerage house to new age online trading system is exceptional. No one had ever thought that a time would come when trading would be so simple and accessible to every individual. But the time has come and today anyone can invest in stocks in just few mouse clicks. Yes, the new age trading system is available for everyone. And for those people who have access to Internet can easily trade stocks right from home.

If you compare the traditional trading system to today's trading system, both are based on the same principle but the process has become much easier than ever before. In addition, the stockbroker today is not a middleman unlike the traditional one and is easily available online. You need not to consult the broker in person. Once you login to your account, you can have access to an online broker. Thanks to the Internet that has made these things so much easier and simple.

It is important to mention the advantages of online stock trading over traditional trading system. Some of the advantages are mentioned below:

• In today's trading system, you need to pay a very minimal commission rate to the broker and he does all online transactions for you. In addition, the stockbroker also helps you in buying and selling of stocks on time.

Rapid trading execution: Unlike traditional trading system, you don't have to wait for your broker to initiate trading. Since, buying and selling of stocks are done online, rapid trade execution can be done online.

Invest as per your financial strength: This is one of the most excellent options that investors get. So, for new investors who want to start with small funds can do so without any difficulty.

Easy and hassle free: Since trading is done online, you can do trading from any corner of the world. The whole process is very simple and traders are not required to have a comprehensive computer or Internet knowledge.

How to start online trading?

As far as trading is concerned, it is somewhat different from traditional method; it is somewhat advanced and easy method of trading. So, if you have any previous experience, you can easily take up the new method. However, for new investors, who do not have any knowledge about stock trading - they need not to worry at all, even it is much easier for them as well.

First of all you need to decide whether you want to invest on a long-term basis or for a short-term basis. If your aim is to earn maximum profits from trading, you can look for day trading option. In this kind of investment option, trading is done on the same day. Since, it requires experience, new investors should opt for long-term trading option.

Once you are done with your planning, you need to open an online account on a trading company website. There are several online trading companies available, but you should always look for the best company website - do some online research and pick the best one. Once your account gets activated, you can start trading online.

Finally, the best thing about Internet based trading is that you can trade online right from home. In addition, you can control and manage your online account in a better and efficient way.

By : Vijay Kumar Sharma
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Sunday, June 21, 2009

Online Trading Advantages and Disadvantages

Online trading, or direct access trading (DAT), of financial instruments has became very popular in the last five years or so. Now almost all financial instruments are available to trade online including stocks, bonds, futures, options, ETFs, forex currencies and mutual funds. Online trading differs in many things from traditional trading practices and different strategies are needed for profiting from the market.

In traditional trading, trades are executed through a broker via phone or via any other communicating method. The broker assist the trader in the whole trading process; and collect and use information for making better trading decisions. In return of this service they charge commissions on traders, which is often very high. The whole process is usually very slow, taking hours to execute a single trade. Long-term investors who do lesser number of trades are the main beneficiaries.

In online trading, trades are executed through an online trading platform (trading software) provided by the online broker. The broker, through their platform offers the trader access to market data, news, charts and alerts. Day traders who want real-time market data are provided level 1.5, level 2 or level 3 market access. All trading decisions are made by the trader himself with regard to the market information he has. Often traders can trade more than one product, one market and/or one ECN with his single account and software. All trades are executed in (near) real-time. In return of their services online brokers charge trading commissions (which is often very low - discount commission schedules) and software usage fees.

Advantages of online trading include, fully automated trading process which is broker independent, informed decision making and access to advanced trading tools, traders have direct control over their trading portfolio, ability to trade multiple markets and/or products, real-time market data, faster trade execution which is crucial in day trading and swing trading, discount commission rates, choice of routing orders to different market makers or specialists, low capital requirements, high leverage offered by brokers for trading on margin, easy to open account and easy to manage account, and no geographical limits. Online trading favors active traders, who want to make quick and frequent trades, who demand lesser commission rates and who trade in bulk on leverage. But online trading is not here for all traders.

The disadvantages of online trading include, need to fulfill specific activity and account minimums as demanded by the broker, greater risk if trades are done extensively on margin, monthly software usage fees, chances of trading loss because of mechanical/platform failures and need of active speedy internet connection. Online traders are fully responsible for their trading decisions and there will be often no one to help them in this process. The fees involved in trading vary considerably with broker, market, ECN and type of trading account and software. Some online brokers may also charge inactivity fees on traders.

By : Dan Pipitone
NobleTrading Online Stock Trading Broker share information on online trading strategies, tips, patterns, indicators and more through their Online Stock Trading Blog. Start reading it and be a subscriber.

Friday, June 19, 2009

Are There Benefits Of Online Stock Trading?

The first stock exchange in late 1700's Philadelphia in United States Of America created a new way in the market of finance and economy which further led to the discovery of New York Stock Exchange (NYSE). Now with the discovery of latest technology, a turning point has come in the method of stock trade through a network of computers.

This new method has given rise to a new level of convenient and liberty to trade stock at your own comfort. Trading stock online has been becoming popular tremendously as a large percentage of population is having an access to the computers.

How To Trade Stock Online

The method of trading stock online starts by building a business relation with an online trading brokerage firm but it is always recommended that you should build up a bond with a highly reputable and renowned company. You should always gain the knowledge about the company by making researches via internet before getting into a business relation with it.

After finding an apt and appropriate brokerage firm, an online account is created in order to trade through it. This online account plays a significant role in trading stock online as it keeps on giving the updates regarding the financial portfolio so that the investor can proceed accordingly to hit the financial targets.

Benefits Of Online Stock Trading

The online trading of stock has brought a twist in the methods of trading in the market of finance and economy. There are numerous advantages of trading stock online.

1 - It has given a level of convenience to the investors as they can easily buy and sell the financial products from the comfort of their home.

2 - There are many stock trading companies that offer low charges of membership, trading, and commission because of the great competition in the finance market. There are so many companies which do not take any cent to start trading through them.

3 - It proffers the level of freedom to the investors where they can make investments in the finance market according to their interest.

4 - The online stock trading companies help in providing the information like NASDAQ quotes, real-time charts, latest news and information of the market without charging a single penny.

There is also a facility of downloading your investment's performance on regular basis to have a proper track of your investment. Also there is a facility offered by many online companies to listen to the audio and video conferences of the topmost professionals of the finance market, and to go through the latest market editorials.

5 - There are many alluring proposals, which are proffered by different online stock trading companies. For example, many companies provide minimum $25 free for just signing in, if you create an account with them and deposit certain amount then you will be given a commission free trade worth $100, and if you are maintaining specific amount in your account then there is no need to pay for IRA money market fund trades.

There is also an offer of getting 20 free days for trading online every month if you are a resident of US and are into online stock trading since last two years.

The above-mentioned points have proved to be very much beneficial to the investors to grab large amount of profits in the thrilling market of finance.

By : J. Lloyd
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Getting Into the Online Trading Game

To the layman on the street, the foreign exchange market is often referred to as an online trading game. This reference arises given the fact that foreign exchange trading takes place over the internet where orders can be placed with merely a few clicks of the mouse. Unlike what most people think, getting into the online trading game is actually a relatively easy process.

Getting Started In Online Trading Tip #1

The first step to getting into the online trading game would be to search for a credible online broker with which to open your online foreign exchange trading account. As trades often involve large sums of money, it is important to be sure that your broker has a credible reputation.

Typically, the broker should be a registered FCM (Futures Commission Merchant) with the CFTC (Commodity Futures Trading Commission). Read online reviews if you're not sure where to start. Also, your online broker should typically be an established firm, with years of experience in the foreign exchange market.

Getting Started In Online Trading Tip #2

The next step would involve determining how much money you would wish to put inside your online foreign exchange trading account. Most online brokers offer a variety of accounts, catering to different needs. A mini account usually requires a few hundred dollars while a standard account could involve amounts between $1,000 and $2,500 or more.

At times, your broker might need you to come to terms with a margin agreement, which allows them to step in should they consider the trade you are making to be too risky. Most brokers also provide the service of linking your bank account to your online trading account, allowing you to top up on your investments from time to time.

Getting Started In Online Trading Tip #3

Now that you have your account, do you begin trading right away? The answer is no.

Doing your market analysis homework is extremely important especially if you are new to the world of trading. Remember, the foreign exchange market is not a Las Vegas casino, and should never be treated as one. Look out for various resources pertaining to foreign exchange trading. The internet is a very good source of such reads. Understand the basics underlying a foreign exchange trade.

It would also be helpful for you to borrow or purchase books covering topics relevant on technical analysis. Foreign exchange traders study a whole list of charts to search for buy-sell signals in guiding their trading decisions. Some of the indicators you might want to look into would include the Moving Average, MACD and the Stochastic Oscillator. Charting software can be easily downloaded from the internet to guide your next trade as you put the methods used in technical analysis to make your next trading decision.

Getting Started In Online Trading Tip #4

Upon completion of your market analysis homework, it is time to put what you've learnt into practice. Most online brokers offer practice accounts, where you use "paper credits" to make real time trades. Take such practice sessions seriously by learning from whatever mistakes which you might have committed along the way, while constantly seeking the advice of well-informed professionals to further refine and hone your investment skills. Developing yourself into a sophisticated, well-informed investor is by no means easy and is often the product of hard work, experience and critical evaluation of past failures.

To round things up, it is easy to get into the online trading game. However, it is necessary to put in hard work and commitment in order for you to succeed at the online trading game and to get the most out of online foreign exchange trading.

By : John J Callingham
John Callingham is an authority on Forex Trading, providing valuable advice on how you can learn about forex currency trading
Click Here to gain FREE access to his Forex Trading secrets when you sign up for his Forex Trading newsletter.

How to Start Online Stock Trading?

How can this be done?

Online stock trading allows you to buy and sell stocks from the comfort of your home or office without having the hassle of having to call your broker every time you want to trade. For doing online stock trading you need to have a computer with a sufficiently good internet connection and an online broker, through whom you would make all such trades. It allows you to trade stocks at your discretion and also saves you a lot of commissions.

Choosing an online broker

The internet has spawned a lot of online brokers who would be happy to get your business and take care of your funds for the stock trades. Most of these brokers would only be eager to give you all the information you need before you enlist with them for their services.

You need to know the minimum investment necessary to make for starting in online trading. Make sure that there are no fees if there is no activity on their site for whatever reasons. Get their full list of commissions/fees which you would need to factor in every time you make a trade. Some online brokers also help you out with your online stock trading by offering you tips and suggestions, and their own outlook on the market and its prospects.

Open an account

Opening of the account can quite often be managed online from the comfort of your home. The online stock trading broker may however require you to provide some sort of paperwork and also open an account with the stock exchanges so trades on your behalf can be done electronically. He may in turn have his own fees for enrolment and other services which you would have to pay, so that you can access his trading network for shares. Your bank account should be linked up to the online stock trading broker so that you can easily transfer funds to the broker or away from him when you want to cash in on your profits.

Some of them may require that you deposit funds with them before you start the online stock trading. Initially you may be allowed to conduct online stock trading only in stocks, and would be unable to indulge in trading in futures and options, foreign exchange or commodities, as these may require you to register separately. Margin trading may require additional funds depending on the limits you are looking for.

Online stock trading can be risky

Online trading can be as risky as any other and you would have to approach it with care and caution. Now that you are on your own and the actions are instantaneous you would require to tread carefully. See that you constantly monitor your portfolio through the tools that most online stock trading brokers provide. Your portfolio will be updated constantly and this will allow you to take decisions on a real time basis. Take advantage also of their services to make in depth analysis of the stocks you are planning to buy or sell, so that you make your trades with the right information available.

By : Asoka S
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