I remember the first time I started to trade online. It was
just before the tech bubble of the late 1990's and the internet
was still something new for most people. Purchasing the now
forgotten company was easy, and I made a few dollars on that
trade. It was so excitingly simple.
Flash forward a couple of years and I have made and lost my
share of money. While still ahead of the game, I learned a few
things about online stock trading. Freedom is great, but it comes
at a cost. Lets have a look at the benefits and the trade offs of
online stock trading:
The Benefits of Online Stock Trading
Low commissions - for most people, this is the number 1
benefit of investing online. For $9.99 or less, you can buy and
sell your favorite stock. Full service brokerage fees are usually
over $100. If you are an active trader, that can start to eat up
your profits very quickly. For every $10 000 you invest, you have
to make 2% ($200 - $100 to buy and $100 to sell) just to break
even.
Quickly act on price moves - another great benefit of online
stock trading is being able to quickly act on price moves. With
the click of a couple of buttons, you are able to take advantage.
With a full service brokerage, you'll have to call first, explain
what and why you want to trade that stock and then wait to see
what price you were filled it. Odds are, you may have missed the
best entry point, and paid 10x the commission for that
privilege.
No middle men - No justifying why you want to trade, no having
to have someone suggest that a stock might be too risky. You call
the shots.
Information - at your fingertips online stock trading can
bring much needed and real time info that can help you when to
buy and when to sell. Technical charts, real time prices and
information sharing can be easily accessed online.
The Drawbacks of Online Stock Trading
No middle men - while I just listed this as a benefit, its
also a drawback. The majority of my losses were from stocks that
did not meet my investment plan but were simple stocks that were
being pumped and hyped up. Often, you end up buying a stock that
is moving higher, and end up having to sell at a loss. When you
trade at a discount broker, there is no stopping you from making
a mistake. With a full service brokerage, your financial planner
can help filter out the bad plays from the smart ones. This
advice alone can more than make up for commission fees.
Investment Plans - online stock trading doesn't automatically
come with an Investment Plan. Why are you buying a stock? What is
your exit plan if things don't go right? Will you use margin?
Will you buy penny stocks (and if so, what percentage of your
portfolio will be at risk)? A full service broker can help create
an investment plan. Trading outside of your risk tolerance is one
of the biggest risks your portfolio will face.
The best suggestion I can make for you is to look at a
combination of both. Trade stocks online, but talk to an
investment planner, develop an investment and trading plan first.
While you may have to pay for his time, your trading plan will
help you to avoid unnecessary risk when you on online stock
trading.
1source4stocks.com provides traders with online trading and
investment startegies and tips. Free stock picks for subscribers
to the Leading Source - http://www.1source4stocks.com
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India Eases Currency Trading Limits for Some Banks Wall Street Journal By SUDEEP JAIN MUMBAI -- India's central bank has asked banks to approach it individually for relaxing some foreign currency trading limits and has already eased restrictions for some banks, a top official said Monday. "Some limits, based on their ...
iFOREX Adds Oil to its list of Tradable Commodities MarketWatch (press release) ROAD TOWN, Tortola, Feb 09, 2012 (BUSINESS WIRE) -- Leading currency trading company, iFOREX, has recently expanded its services, giving all Forex trading accounts direct access to oil CFDs. Targeting an audience that has little or no experience with ...
This January Azerbaijan's exchange currency trading totaled $82.5 million Azerbaijan Business Center Baku, Fineko/abc.az. The Baku Interbank Stock Exchange (BBVB) has renewed statistics of its operations. BBVB reports that in January 2012 the nine participating banks concluded 28 deals in 36 trading sessions in e-trading system (BEST).
FOCUS: Technology Buoys Retail Currency Trading, Reshapes Old Models Wall Street Journal By Eva Szalay Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Retail foreign-exchange trading is emerging as one of the biggest growth areas in the currencies space, and some of the trading firms that facilitate these flows are building up a whole new ...
Morgan Stanley Currency-Trading Head Stephen Mettler Leaves Bank BusinessWeek By Michael J. Moore Jan. 26 (Bloomberg) -- Stephen Mettler, who oversaw Morgan Stanley's interest rates and foreign-exchange trading businesses, has left the bank. Mettler, who joined the firm in 1997, retired, according to an internal memo obtained by ...
Bank of England and ECB Hold Steady, Indonesia Cuts CNBC.com [CNBC] ----------------------- MULTI CURRENCIES VS THE DOLLAR Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm. Learn more: The essential vocabulary for currency trading is on Key Currency ...
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Long term traders will work from end of day data
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I read on a bulletin board a traders comment that on his
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Everyone trades a little differently. The trading method
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A Fools Game
I received an email this week with a question (below) which
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Your Mother Could Make
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Risk and Stock Trading
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Trade Exit - How To Cut
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Cut your losses short and let your profits run. This is the
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MORE RESOURCES updated Thu. February / 09 / 2012
