online stock market investing
TRANSCRIPT
By www.CandleStickForums.com
Online stock market investing has replaced much of traditional investing directly through a stock broker.
Online investing through a discount broker can greatly reduce the cost of investing in stocks but comes with its own unique set of risks.
Bypassing a stock broker saves money and foregoing the advice of a professional with years of experience can make online investment very costly.
To avoid making costly mistakes it is important that the investor start by researching online brokers to make sure that they are licensed within their state of operation.
Then the investor needs to learn about the basics of stock investing and gain familiarity with the research tools that come with the online broker•trading platform.
Whether the investor trades through a broker or trades online, fundamental analysis of stocks and market sectors still applies.
Online stock market investing makes buying and selling faster.
It also requires that the investor know more than was necessary when he called his stock broker for advice before buying or selling.
Online stock market investing uses electronic communications networks to connect the investor or trader to the stock exchange.
Nevertheless some online orders still are routed through agents of the discount broker to approve trades.
This step helps prevent potentially unlawful trades.
Instead of making phone calls the online stock investor uses a trading platform.
This is a computer program that helps the investor in picking stocks, review pertinent information, run investment scenarios, and follow the stock market news.
Such trading platforms have built in technical analysis that helps the investor or trader to make rapid decisions for real time buy and sell orders.
In some ways the psychology of investing and, especially, the psychology of trading can be more important and more dangerous in online stock market investing.
To a degree working at a computer with a trading platform is like a big video game.
Trading in Forex, for example, has addictive components.
Not having to go through the ritual of calling a stock broker can lead to bad trading decisions made in an instant and regretted forever.
The amount of leverage available in online trading can lead to fantastic gains if the investor is prepared and buys a call in options investing in a timely manner.
The same degree of leverage can wipe out an investor capital in a few minutes as well.
One of the especially useful trading tools that often comes with a trading platform for online stock market investing is the ability to •get back test•h investment strategies.
The investor makes a number of hypothetical investments and then tests them during different sets of market conditions in different time frames.
There are a large number of online brokers. Fees differ and services differ.
Depending upon the individual investment strategy a given broker may or may not fit.
Picking a broker is like buying stock. One does not have to go with a broker unless the services and price are right just like one does not need to buy stock unless the conditions are right.
Online stock market investing allows the investor to engage in after hours trading, engage in commodities trading, and any other market investing.
The only limit is how hard and long the investor wants to work.