In today’s fast paced electronic world it is possible to access information, make decisions and take action in the blink of an eye. Electronic trading has provided the home investor and trader with the same opportunity to quickly buy and sell stock that previously was the province of large institutional investors. Learning how to trade stocks online gives the average investor the opportunity to do minute by minute technical analysis of stocks in order to profit from the short term inefficiencies that the markets produce. How to trade stocks online involves learning about stocks first of all. If you have never bought or sold stock or followed the markets you will need to learn how stocks and markets work before learning specifically how to trade stocks online. Once you understand stocks and markets you will need to learn about the hardware and software that allows online trading. After that you will look into the strategies and tactics of how to trade stocks online.
In the pre electronic trading days you read the morning paper and saw that XYZ Corporation was selling for only $17 a share and had a PE ratio of only 7. You called your broker and told him to buy 100 shares of XYZ Corporation because the price and PE ratio were attractive. If you were smart you placed a limit order so that you did not buy at over $17.25 a share. Once you placed the order you went drove to a luncheon meeting and on the radio you heard that XYZ was a takeover target of the ZYX conglomerate and that the price just passed $30 a share. You were happy that you bought early until you called your broker.He apologized for the fact that you order was not processed promptly enough and that the limit on the order precluded its being processed as the stock passed $20 a share. You went into a slow burn when your broker said that XYZ was now $65 a share but maybe you still wanted to buy in case it went up more. You started wondering how to become a day trader and how to trade stocks online.
If you are like the fictitious person in our example you know about stocks and markets. You just want to know how to trade online in order to take advantage of opportunities as they happen. You will need to research and purchase trading software as well as a computer with fast processing speed and an internet connection with substantial bandwidth. You will need a brokerage account with an online broker. Much of the information you will need about computer and internet specs will be available from the broker. Specifically you will need a trading platform (software) that is compatible with the broker’s. Once you learn how to trade stocks online a whole new world will open up as you will be able to response rapidly to the technical cues that are seen in stock price patterns. You will see news events unfolding on the trading screen an be able to react instead of reading about the trading news in tomorrow’s paper or getting a belated call from your broker after a stock has already made it move. How to become a successful stock trader takes patience, practice, and dedication. However, learning how to trade stocks online is a good first step to entering the potentially profitable electronic trading age.
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