Trading Stocks Online - How To Do It | SmartGuy

Trading Stocks Online - How To Do It

Financial Plan & Invest

There is a lot of great information on trading stocks online- how to do it.  To simplify the e-trading process you need a bit of basic information.  When trading stock whether it is through a broker or through online stock trading you become a shareholder or part "owner" in the company.  As the company profits it can share those profits with the shareholders, this creates an income.    When purchasing stock through a broker you pay a commission to a person who is licensed to trade stock. You have the ability to speak with the broker and make mutual decisions.  The broker may actually work on the floor of a stock exchange.

The biggest difference with e-trading is the lack of a human broker.  Typically, when trading online you make the decision yourself as to what stock to purchase or sell, you must request the trades yourself as well.  You can sometimes find online brokers who will help you learn how to trade stock online.  If you are new to online stock and trading finding a company with a human resource may be very beneficial.  When looking for an online broker there are some questions you need to ask yourself and qualities to look for.  Especially if you need someone with an online service to help you with online stock trading

Questions to ask Yourself
Decide how much money you plan to invest.  Many firms may require a certain amount of money in investments, or you may not be eligible, or will be charged fees.  You also need to consider how often you want to participate in e-trading.  This is important in deciding how much a site is going to cost you.  While some sites charge per transaction, others may charge a fee for the account becoming inactive.  Make sure you take into account what you know about trading stocks online- how to do it.  If you need more guidance into how to trade stock online, you will end up paying more for the online broker you use since you will need a human contact.

What to Look for in a Broker
First, make sure your online stock trading brokerage has very tight security measures.  There would be nothing worse than the brokerage leaking your financial information.  It would also be important to find a reputable, legitimate brokerage, which is going to have your best interest in mind.  Make sure you have some idea of how to trade stock online the company you decide to use will have questions on your suitability for an account.  The brokerage has the responsibility to keep you investing within your means.   You will have the option to set up a cash account, or a margin account.  The big difference is with a cash account, you must have the money on hand to purchase the stock that interests you.  With a margin account, you have the ability to borrow set amounts from the brokerage.  Marginal accounts definitely present a bigger challenge to manage

When you have your account up and running, and you are familiar with trading stocks online-how to do it, you are ready to start trading.   Make sure you are receiving real time stock quotes, some companies report up to 20 minutes behind the market.  The stock market is very fluid, and constantly changing.  By having the most up to date stock quotes you will be able to make accurate decisions.  You will most likely be researching, purchasing, and selling stock on your own without a broker so be very aware of online stock fraud.