Trading Shares Online - How and Why Trade On-line
As a result of improving online technologies and the widespread overhaul of web-based trading platforms, trading shares online is now the done thing amongst consumer investors worldwide. The days of phoning the broker with your orders are largely, although not totally, forgotten, with many new traders opting to trading exclusively online and to more actively manage their trading portfolios through an online brokerage interface. But how does trading shares online stand up against trading shares over the phone, and do the advantages merit the rise of the tech-trading era?
Why Trade Shares Online?
Cost of Trading
The first key advantage of trading shares online versus going through a 'real life' broker is the cost. Trading online is invariably the cheaper option, with transaction fees being considerably less than those with bricks and mortar brokers. Because the online platform executes the trade directly, rather than having to go through a human broker, the marginal costs of providing the service are cheaper with online brokers, and the saving that generates is passed on to traders in lower transaction fees. While it might not seem like much of a saving, transaction fees will apply across every trade you make, and for more active traders a saving on these costs will have a significantly positive effect on your earnings.
Control of your Portfolio
Another strong advantage to trading online is the greater degree of control you can exercise over your trading account. Unlike going through traditional offline brokers, their online trading platforms provide all the relevant data and orders to enable you to execute your trading decisions directly. Rather than having to bear the cost of any delays in placing orders via the traditional channels, the execution takes place when the trader decides to execute - thus, trading online allows a closer control on your trading account, and affords more dynamic trading decisions.
Managing Your Trading Account
Similarly, the online functionality of most brokers gives you access to a wealth of data and information relating to your account, from charts and graphs through to running balances for each of your open positions. By having access to all this information in the same panel as your trading screen, and by enabling you to take full responsibility for executing your own trades, online trading cuts out the middle man in order to make managing and running a successful trading account easier.
Tracking your Positions
With online trading platforms, you have the ability to track each of your open stock positions, and to see how each is performing over set periods of time. Rather than manually having to check performance data, you have access to real time figures, and are able to track both stocks you own and stocks you've chosen to follow ahead of an investment. Tools of this kind are invaluable for traders looking to build and trade a substantial portfolio, and is a far more straightforward mechanism for managing an investment portfolio than through traditional offline brokers.
While offline brokers are by no means redundant, there are a number of valid reasons for new traders opting to invest exclusively online. With ever improving technologies, and a cheaper, more efficient and more active trading environment, dealing shares online looks set to continue to grow in popularity amongst traders new and old.