Advantages And Disadvantages of Online Trading

• 24*7 access

Not only is the access provided from a single trading account.

But it is also flexible enough so that you can log in from any location and at any point in time.

More importantly, you can access a trading platform like ours from your internet browsers (on a laptop, desktop PCs, etc).

As well as from applications (on your tablets, smartphones, etc).

Prons and cons of online trading.

Online trading has gained massive popularity and the reasons for that are simple.

Firstly, it is convenient and easy.

And if you are lazy and you do not want to leave the room.

Then, who could have imagined a few years before to trade on stocks while lying on his bed with his laptop in front of him?

But this is how tranquil online trading has become. And who wouldn’t want that extra bit of comfort?

Then there is the advantage of paying significantly less commission on your transactions.

The online trading firms charge a symbolic brokerage which hardly affects your margin.

These firms make their profits by the abrupt volume of trade they do.

With online trading, you can trade at whatever time you feel.

Yes, you can trade beyond actual trading hours of the market.

So now you can come back from your regular work and before you go to bed spend an hour looking at your investments.

But while trading online, there are a few things that you should be careful about.

We will try here to provide you with some basic indicators.

Firstly you need to understand that however fast your internet connection is, and whatever software and hardware you are using there will be some time lag.

Secondly, you must get real-time updates and stock quotes from your service provider.

If it is delayed then you will be placing orders for rates which are long history.

And then it will take further time to process your order.

What you will finally get is something a lot different from what you were expecting.

So the feeds have to be live and real time. There can be no two ways about it.

Advantages

Online trading has the following advantages –

• Faster Transaction.

Online banking is fast and efficient.

Funds can be transferred between accounts almost instantly.

Especially if the two accounts are held at the same banking institution.

It can be bought or sold by a single click of the mouse.

Through this, a quicker exchange can be made which may also ensure quicker earnings.

• It is cheaper.

In online stock trading, the stockbroker fee which you will have to pay is lower when compared to the commission charged by the previous method.

If you trade in a sufficiently large volume of stocks, it is possible for you to be able to negotiate your broker’s fees.

• Convenient.

In Online trading, you only need to open the trading account.

You’re not bound by time and place as long as you have an internet connection.

Hence, online trading is convenient and accessible from anywhere with limited hassle. It also saves time.

• You can monitor your investment as per your need.

Online trading allows you to buy or sell shares as per your convenience.

It offers advanced interfaces and the ability for investors to see how their money is performing throughout the day.

You can use your phone or your computer to evaluate your profit or loss.

• It also estimates the middleman.

Online trading allows you to trade with virtually no direct broker communication.

Apart from reducing the overall trading cost, this benefit also makes the trading hassle-free, making this service much more lucrative.

Disadvantages

• Risk of excessive trading.

Firstly, the biggest disadvantage of online trading is that you may end up doing excessive trading.

That result in a loss which is not the case with offline traders.

Where you ask the broker to put the order at a particular price.

And when the stock reaches that price brokers execute that order and hence the issue of excessive trading never arises.

• No guidance from the broker.

Secondly, an individual will never be able to develop personal relations with the broker who can be of great help.

When you are in doubt as many brokers give advice regarding stocks which can result in profits for both investors as well as a trader.

In other words, if you have good financial knowledge.

and can take a decision on your own then only you should go for online trading.

• Error and connectivity issues.

Now, the next problem is since people are not brokers they can make mistakes in putting orders which can lead to big losses for investor or trader.

Besides, it is dependent on the internet.

And if there is some connectivity problem then you will be in trouble.

Because you will not be able to place the order which is not the case with brokers.

Where you can put orders on the telephone and it does not require any internet.

• Customer Services.

Online brokers have a tilt cost structure, which allows them to offer discounts on commissions.

You might have to wait a long time to have a phone trade, especially during explosive markets, because trained and certified traders cost money.

• Feedback implement.

Online trading means that you are your own investment manager, but this independence comes at a price.

Online brokers typically do not provide buy-sell recommendations.

Conclusion

Thus, the stock market, equity market or share market is the aggregation of buyers and sellers.

A loose network of economic transactions, not a physical facility or discrete entity of stocks (also called shares).

Which represent ownership claims on businesses; these may include securities listed on a public stock exchange.

As well as stock that is only traded privately.

Examples of the latter include shares of private companies which are sold to investors through equity crowdfunding platforms.

Stock exchanges list shares of common equity as well as other security types, e.g. corporate bonds and convertible bonds.

Stocks are categorized in different ways.

Firstly, one way is through the country where the company is domiciled.

For example, Nestlé and Novartis are domiciled in Switzerland.

So they may be considered as part of the Swiss stock market, although their stock may also be traded on exchanges in other countries.

For example, as American depository receipts (ADRs) on U.S. stock markets.

For example, Nestlé and Novartis are domiciled in Switzerland.

So they may be considered as part of the Swiss stock market, although their stock may also be traded on exchanges in other countries.

For example, as American depository receipts (ADRs) on U.S. stock markets.

As one can see from the above that online trading has advantages as well as disadvantages.

And if you are technology savvy as well as financial savvy than you should go for online trading.

And if you lack either of the two qualities that are being financially savvy or technology savvy than you should stick with offline trading.

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