Basic of online stock trading

Internet had brought revolution in all the fields and stock market is not an exception. Once stock market was only for the rich people as it involved lots of formalities and investment, but with the advent of the internet, the stock market has become a boon to people who have lower income. Once the stock market was all about spending lots of time with analysis as all the details were available only in paper and transaction done in person. But after the arrival of the internet, all the activities (Buying and selling shares, analysis) are done with the mouse clicks.

Internet has brought lots of changes within the stock market. Let us see some of the changes and advantages brought by the online stock trading.

1. Brokers: Initially the brokers were one of the most expensive aspect of stock trading. As the stock brokers were completely involved in trading, investors actually had less idea about the stocks and they simply followed what the stock brokers advised. Stock brokers also charged high brokerage due to their command in the stock market. But the scenario has changed with the internet. With more access to the stock market, investors are more involved in the stock market ever before. Even though stock brokers are still an essential part of the market. Stock broking also got expanded with different kinds of brokers as explained in previous article.

2. Electronic stock data: Before the arrival of the internet, all the stock prices were published in the newspaper next day. which means you have to wait almost a day to know the latest share prices. Or you were supposed to call the stock broker to know the latest. But now almost all the investors have access to streaming share price datas and with mobile phone it has got even more easier.

3. share Analysis tools: As i previously said, investors were totally relying on stock brokers for recent developments on share prices. But now with advanced tools like charts, electronic RNS, trading software etc. things have just become easy. Investors can now make their own decision in buying and selling shares. With the advanced charts, you can analyze the past movements of the stocks and with advanced trading softwares, you dont have to be sitting before the computer as the computer would do the job for you.

But with the developments always comes the risk. Here are some of the risks in online stock trading.

1. Data theft: With all the transaction done online, the chances of your money getting to someone’s hand is more likely. As the online transactions are controlled by passwords, its easy for the people who have good knowledge about the systems to take it away without your concern. You might even come across some strange brokerage fee (ie) phone brokerage is more expensive compared to online brokerage. Data theft is one of the reason behind this expensive brokerage.

2. Loosing track: With online softwares, maintaining stock portfolios is easier. So people tend to track lots of stock at the same time instead of tracking one or two. so investors normally loose track of the share prices or recent developments which might be crucial to make profit or prevent loss. So investors should learn to the keep the balance.

3. Stock trading softwares: As the usage of the software is getting more and more everyday, investors might get too dependent on the softwares as the softwares always has the tendencies to commit mistakes which might end up crucial for your investment. So investors must keep in touch with datas from all the corners instead of just one.

Basics of day trading

UK is considered to be one of the world’s strongest economies but the 2008 recession proved that its not immune from the economic ups and downs. No matter what the condition of economy is, people are ready to take risk and one of them is day trading online.

Daytrading is just like stock and share trading but here the trade is done within a short period of time and it is considered to be one of the fastest way to make money in the share market. But remember, with lots of money comes lots of risk. Its been also reported that many traders have lost money is quick succession, so it is advisable to know all the risk and process of trading before even thinking about investing in daytrading.

But thats not where the story ends. If you have a good trading strategy and a strong guidance, making money in stock market is not a big deal at all. Follow the steps to have a better experience in daytrading.

1. Choose a few stocks in any industry or combined. (For eg. Oil and gas, Mining, Bank etc.)
2. Now, please be patient and analyze the stocks you have chosen
3. Analysis includes having a look at the RNS (Regulatory news service), company’s management, and share holders.
4. The next step would be getting inside the chat room, where you can talk to other buyers and sellers.
5. This is a good way to find out what the next big time company might be, but you have to know if the people with whom you are chatting are “share ramping,” which is the process of taking up the shares artificially.
6. These people who are called as “rampers” get inside the chat room, and convince all the other members to invest in a particular stock in which they might have invested already.
7. So you have to take the risk of guessing if this person is correct or not and if the information he provides is authorized or not. With the latest techologies and innovations, daytrading can also be a big trouble because of the nature of trading and could be potentially dangerous. But with your trading knowledge and professionalism in selling and buying shares, making profit from daytrading will be easy in no time.
8. The day trading should not be used by beginners, as the risk of losing money is too high. So start with normal trading stocks where you wait and see the results and get used to profits and losses.