Online Stock Trading: Freedom of Trade

I remember the first time I started to trade online. It was just before the tech bubble of the late 1990's and the internet was still something new for most people. Purchasing the now forgotten company was easy, and I made a few dollars on that trade. It was so excitingly simple.

Flash forward a couple of years and I have made and lost my share of money. While still ahead of the game, I learned a few things about online stock trading. Freedom is great, but it comes at a cost. Lets have a look at the benefits and the trade offs of online stock trading:

The Benefits of Online Stock Trading

Low commissions ? for most people, this is the number 1 benefit of investing online. For $9.99 or less, you can buy and sell your favorite stock. Full service brokerage fees are usually over $100. If you are an active trader, that can start to eat up your profits very quickly. For every $10 000 you invest, you have to make 2% ($200 - $100 to buy and $100 to sell) just to break even.

Quickly act on price moves ? another great benefit of online stock trading is being able to quickly act on price moves. With the click of a couple of buttons, you are able to take advantage. With a full service brokerage, you'll have to call first, explain what and why you want to trade that stock and then wait to see what price you were filled it. Odds are, you may have missed the best entry point, and paid 10x the commission for that privilege.

No middle men ? No justifying why you want to trade, no having to have someone suggest that a stock might be too risky. You call the shots.

Information ? at your fingertips online stock trading can bring much needed and real time info that can help you when to buy and when to sell. Technical charts, real time prices and information sharing can be easily accessed online.

The Drawbacks of Online Stock Trading

No middle men ? while I just listed this as a benefit, its also a drawback. The majority of my losses were from stocks that did not meet my investment plan but were simple stocks that were being pumped and hyped up. Often, you end up buying a stock that is moving higher, and end up having to sell at a loss. When you trade at a discount broker, there is no stopping you from making a mistake. With a full service brokerage, your financial planner can help filter out the bad plays from the smart ones. This advice alone can more than make up for commission fees.

Investment Plans ? online stock trading doesn't automatically come with an Investment Plan. Why are you buying a stock? What is your exit plan if things don't go right? Will you use margin? Will you buy penny stocks (and if so, what percentage of your portfolio will be at risk)? A full service broker can help create an investment plan. Trading outside of your risk tolerance is one of the biggest risks your portfolio will face.

The best suggestion I can make for you is to look at a combination of both. Trade stocks online, but talk to an investment planner, develop an investment and trading plan first. While you may have to pay for his time, your trading plan will help you to avoid unnecessary risk when you on online stock trading.

investment strategies for trading penny stocks.

1source4stocks.com provides traders with online trading and investment startegies and tips. Free stock picks for subscribers to the Leading Source - http://www.1source4stocks.com

---

A Short Introduction To FOREX

FOREX is the world's largest and most liquid trading market.... Read More

Trade Exit - How To Cut Losses And Let Profits Run

Cut your losses short and let your profits run. This... Read More

Crisis of Confidence in the EU

The European Union (EU) constitution was dealt a double blow,... Read More

Where is the Market Going?

If you ask me whether the market will have moved... Read More

Intrenet Marketing VS Forex Currency Trading

Have you noticed that when someone's trying to sell you... Read More

Chinas New Currency Regime

The base unit for the renminbi is the yuan, which... Read More

FOREX - Where Fortunes Are Made Everyday

The Foreign Exchange Market ? better known as FOREX -... Read More

Online Forex Trading

Foreign exchange currency trading is also known as Forex trading,... Read More

Commodity Trading - Advantages and Disadvantages

What Is Commodity Trading?Commodity futures markets allow commercial producers and... Read More

Options Trading - Advantages and Disadvantages

What is Options Trading?An option is simply granting someone the... Read More

Day Trading Training ... You need more than just going to a free stock market workshop to learn

Day trading is all about making buy and sell decisions.... Read More

10 Steps To Professional Day Trading

Everyone trades a little differently. The trading method outlined below... Read More

ISO 4217 in Forex Trading

ISO 4217 is an international standard describing three letter codes... Read More

Trading Timeframes

Long TermLong term traders will work from end of day... Read More

A Beginner?s Guide to FOREX

FOREX is the abbreviation for the Foreign Exchange market. FOREX... Read More

Day Trading the Index Futures - How to Judge Good Entries

QUESTION: If the SP futures fall through support and go... Read More

Your Mother Could Make Money In Forex Trading

The question would be not whether she could but rather... Read More

Writing A Trading Plan

All professional traders have a trading plan. Trading futures is... Read More

The Major Players in the Foreign Currency Exchange Market - FOREX

Since the US dollar is the centerpiece of the market,... Read More

Sending Signals for Trading in Forex

Forex signals are sent by a forex firm to their... Read More

The Miracle of Forex

My father, who owns a small parts store and garage... Read More

Forex Trading Online - 7 Reasons Why You Should!

Forex trading online is a fast way to use your... Read More

An Evaluation of the Devaluation

A Minister of Finance is morally right to lie about... Read More

Forex Brokers - Helping to Maximize Your Success

A Forex broker is a broker dealing in foreign exchange,... Read More

Option Arbitrage in the Forex Market

What is arbitrage? Arbitrage is the simultaneous buying and selling... Read More

Psychology Of Trading

The psychological aspect of trading is usually underestimated by those... Read More

Reality of Online Forex Trading

Foreign exchange trading is the trading of currencies. Most currencies... Read More

Dont Deny Reality

If you want to be a successful trader, you must... Read More

The Yin and the Yang of Markets

I am reading a fantastic book on trading, first published... Read More

Adaptation to the Realities of the Market

Do you think adaptation to the realities of the market... Read More

The Nature of the Trading Business

Consider the following: As a trader you are in a... Read More

Forex Trading Systems

The foreign exchange currency market is the largest market in... Read More

Stopping Yourself

I read on a bulletin board a traders comment that... Read More