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Online Stock Trading - 4 "Pros" And 5 "Cons" Of Online Stock Trading!

Apr 2, 2008
The advent of the Internet has definitely been a boon where businesses are concerned. People sitting in the comfort of their homes or ensconced in their office chairs find it wonderfully easy to conduct transactions across the globe. Can online stock trading therefore be far behind?

However, as is well-known, no business comes without its risks. And online stock trading also carries its own profits and losses, its advantages and disadvantages.

Let's have a look at what one can gain through online stock trading--

(1) Plenty of top companies find it time-saving to conduct trade via various web sites on the World Web. Also, information is regularly updated on each site. As a result, individuals as well as organizations from across the globe can indulge in trading operations without even seeing each other!

(2) It takes hardly a few seconds to complete each transaction. So it is possible to deal with multiple brokers involved in purchasing and selling shares at one and the same time. All that is required is a single "mouse" click! One saves on time as well as energy. So no customer grudges paying the nominal fee of 5 dollars per transaction (which is the fee for most trades).

(3) There is the option of taking advice from the securities and Exchange Commission for conducting trade. Rates for stocks keep changing based on different market factors, that is, they keep going up and down. The Commission feels that placing limit orders when setting pricing limits instead of creating market orders, will ensure specific rates for one's stocks.

(4) The reason for the above-mentioned suggestion is that market orders cannot determine or control the direction of values, whereas stocks based on limit orders will be traded at values that match the predetermined price or go higher.

Now that the good news is over, coming to the bad news, or rather the risks of online stock trading--

(1) Sure, one can make a lot of money if one invests in the right places! But what if the inexperienced trader does not have much of a clue as to where to invest and ends up making wrong decisions? Think about it!

(2) Online or physical, trading practices and risks remain the same. Just because online stock trading is more rapid, it does not mean that losses cannot happen!

(3) First-timers to this practice may make the mistake of believing that it is all so easy! It isn't really! Careful thought has to be given to each deal since once the mouse is clicked, there is absolutely no turning back! Every trader learns from his mistakes and by exhibiting patience.

(4) Sometimes, there is too much of traffic on the Net; so delays are entirely possible. After all, the World Web can only go this far and no further! At times, there are technical errors; so transactions may not go through. The stock trader has to be mentally prepared for such eventualities.

(5) No technology is perfect. So the technology involved with online stock trading also has its minus points. However, the system has been functioning quite well for several years now and should continue to do so in future, considering the new innovations constantly being introducted.

To conclude, one has to get some prior knowledge from experts before setting out on the adventure of online stock trading. Extra vigilance regarding risks involved, trading practices and the speed at which everything works should go a long way in ensuring wise investment choices.
About the Author
Abhishek has an uncanny insight into Trading! Visit his website www.Trading-Masters.com and download his FREE Trading Report and learn some amazing Trading tips and tricks for FREE. His tips would save you thousands and make you better at Trading! But hurry, only limited Free copies available! www.Trading-Masters.com
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