Recent changes in Internet technology affords regular people the opportunity to trade online without having to necessarily give their broker minimum buy/sell orders, nor do they have to pay large amounts of their trade profits to the broker in commission fees. However, with evidence showing that approximately 80 per. cent. of new online traders losing money from the offset, making sure you understand the fundamentals of online trading is essential.
Trading strategy
Put simply, your career online trading is going to be made or broken depending upon the trading strategy that you select. Chose wisely, your strategy will take advantage of the most opportune moments of when to buy and sell stock and, thus, will protect your profits. On the other hand, chose poorly and you could find yourself losing thousands, if not tens of thousands, of dollars in a few minutes. Here, your trading strategy is going to be dependent on which one (or even all) of the four types of online stock traders you are going to be, namely a:
(1) long-term trader who keeps hold of his stock for one or more years
(2) medium-term trader who keeps hold of his stock anywhere from 1 month to six months
(3) a short-term trader who keeps hold of his stock anywhere from a week to a month
(4) a day trader who buys and sells stock in the same day.
Without over emphasising it, in most cases the longer you keep hold of the stock, the more chance there is that you will make a profit from your online trading. However, there are very real possibilities that you can make lots of profits day trading online � if you know what you are doing.
Online trading software
If nothing else, the Information Age should have shown you that having access to information at the right time will mean the difference between making a profit and making a loss. To assist you with all your online trading information needs, you should give serious consideration to purchasing an online stock trading software program, which can provide you with technical charts, real time stock prices and historical data about stock that you can then use to analyse whether or not to buy/sell the stock in question.
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