Get to Know about Online stock trading

Stock trading can be a pretty useful thing to do with your extra money that you are not using right now. Investing your money in the right place can make you financially sound. Trading can be a pretty intimidating thing when you are just starting out with it. We advise new investors to play safe. It is wise not to be greedy and not to mess things up. Making money isn’t easy and you are going to need a lot of experience before you hit your jackpot. A lot of people will blame luck for not being able to get good returns on investment but if you study the market well and play cautiously you might be able to predict the future. No, it will not happen in a day or in a week; it will take months probably years to actually able to predict the market.

 

When you are first starting out with online stock trading, go slow and analyse and decode the patterns of the market. Some will say that No risk No gain. And yes, this proverb is particularly true for stock market but it will be foolish to gamble millions of dollars in your first investment.

 

Online stock trading is buying and selling stocks through brokers via the internet. Online stock trading is also called electronic trading or Etrading. It is basically a way of trading securities electronically. Electronic trading is done via an Electronic Communication Network which is basically a virtual market place for trading securities and stocks. Most trading is done online to save time, money and resources. There are quite some set of rules that one needs to follow while trading stocks online and those rules are usually drafted by the country’s constitution or a certified board or committee.

Online traders get a certain edge over the normal traditional traders. All online traders need is a computer and enough money to open up an account. He or she also needs to have a board certified licence to practise online trading. Online traders also face less transaction cost and thus in return you have to pay a less of a brokerage. Their stocks also have higher liquidity levels and higher transparency. Only legally certified brokers can trade in stocks. Online trading makes the market more accessible. You do not need to go to an investment firm and buy stocks of different companies.

Market order- A market order is one of the simplest and easiest ways of online trading. Say if someone wants to buy or sell 200 stocks they will be directly referred to an exchange and they will fill out the current price.

 

Limit orders- In this case investors can set the minimum and maximum price before the stock trade gets converted to a market order. These kinds of orders are very useful to new traders as they can set the bar as they like.

 

Stop order- This order can help an investor to avoid further losses or to protect the profit if the price of a stock falls below a certain level.