Basic online trading

Basic online trading

Earlier share trading used to take place on the "floor" through a process known as "open outcry". But with changing times and technology, the way in which you have to invest in shares has also undergone a sea change. Online trading is a faster, easier and a cheaper alternative to its predecessor (i.e. floor trading)

What are the basic few things you need to know before going for online trading of shares, commodities and other financial instruments?

* You need to have a computer or a laptop with internet connection.
* You must open an account with one of the online broker.

People are always plagues with the thought of investing online. They feel that they might be cheated in the transaction or somebody would misuse their account details. As an investor you must have a certain degree of trust on your online broker. So its vital that you scrutinize the various online brokers on all possible parameters and then register with one.

Now online trading is not a cakewalk. It requires intelligence, presence of mind and over all precision in whatever you do (i.e. buy or sell). Delay in decision making may put you under heavy financial losses. It has also been observed that persons gut feeling about a stock or an industry also comes into play when you are about to invest or divest.

What kind of money do I need to get started with?

Firstly, you have to open an account with a broker which you can do for as little as 250$. For beginners, it is advised that you first select your own portfolio and track how your stock is doing. You must be judicious in deciding when to buy or sell. In this way you can have a feel of the stock market. But the real deal is when you invest your own hard earned money. It is not important if you start investing with 100$ or 100000$, the important thing is you have to start investing.

What else do I need to know about Online Trading?

Frankly speaking, internet is full of information about stocks, commodities, futures, options etc. if you think of mastering all these information and then entering into the market then there is possibility that you won't be entering the market at all. You would be getting tips and advices from your friends, your financial advisor etc. the most important thing is to know which advise to take and when. Investing in any company won't do you much good. You must be first able to understand about the fundamentals of the company and the industry you are investing your money. Flukes work in stock market. But in long term its better to make an informed decision rather than a hasty one.

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