Best 8 Financial Benefits of Online Trading
Online trading is one of the quickest ways of investing and earning. Although online investment scams are real, there are plenty of legitimate ways to invest your money in the market by using online trading platforms. For instance, you can sign up with brokerage platforms offered by reliable providers like Bernstein bank and trade in commodities, forex, penny stocks, or any other kind of investment.
Despite its popularity, many investors are still skeptical about online trading. If that describes your own point of view, you might want to have a look at these financial benefits and change your mind:
1. It’s cheaper
Online trading is cheaper than traditional trading in several ways. First, you don’t need a broker to execute your trades. Although you do pay fees for online trades, the cost isn’t as high. Second, you can get started even if have a modest amount of capital to invest. Popular brokerages offer trades under $10 without maintaining an account minimum.
2. You have more control
Online trading allows you to trade what you want, when you want. Unlike conventional trading, you don’t have to wait to get in touch with a broker to place an order. Your transactions are almost instant. You can review them by yourself instead of depending on a broker for performance and other trading information.
3. You can monitor your investments in real time
Online brokerage platforms come with advanced interfaces. From your online trading account, you can see how your investments are performing throughout the day. You can log into your account via your smartphone or computer and keep an eye on your financial gains and losses in real time. You won’t miss out on any important changes. Plus, you’ll have access to different tools, financial reports, and the latest news to react to the market changes in a timely fashion.
4. Transactions are faster
Online banking has made online trading even more efficient. Transferring funds between accounts happens almost instantly, and quicker transfers mean quicker earnings. If both accounts are with the same bank, the transaction will be processed even faster, so you can buy and sell stocks with a simple click of the mouse.
5. Markets are open 24×7
It isn’t just your transactions that become seamless – online trading gives you the opportunity to work in the hours that are convenient for you. Extended market hours have created more trading opportunities for investors. Yes, optimal trading hours do exist, but most markets are open 24 hours a day, 5 days a week. You can even trade from home any time you want. You can choose to trade part-time or full-time as and when you want.
6. It’s personalized
Through your online platform, you can place orders with stop loss triggers and place price alerts or volume spurt triggers on specific stocks. In addition to tracking your trading strategies in real time, you can also personalize them. Best of all, you have the ability to immediately adjust your strategy if the market takes a sudden turn.
7. You avoid brokerage bias
Online trading gives you the liberty to take full control of your own trading decisions, which allows you to eliminate brokerage bias altogether. Usually, bias occurs when brokers give financial advice to investors that in fact benefits themselves more than it benefits the investors. Since there are no middle-men involved in online trading, this problem never arises.
8. You enjoy more liquidity and leverage
Online trading has significantly increased market participation. There is now a greater abundance of traders than before that are willing to buy or sell a particular stock at a given price. As a result, bid and ask spreads have become tighter. The process of entering or exiting an open position has also become more streamlined.
Online trading has also increased the availability of financial leverage. Forex brokerage firms let their clients open positions with upwards of 100:1 leverage on their account balance. This has increased traders’ opportunities of making larger returns.
Watch out for the disadvantages, too
Without a doubt, online trading offers investors great potential, but it has some disadvantages, too. It provides you access to a plethora of markets and usually increases your leverage, too. Inexperienced investors might not be able to keep proper checks and balances on their emotional state while making near-instant online trades, so there is a greater chance for fear and greed to affect the outcome of their actions.
Spikes in pricing have grown in frequency and magnitude due to the increase in trading volume and active market participation caused by an influx of online traders. New investors are rapidly entering the market, which has led to higher market volatility. With unpredictable market movements and price swings, you could lose your entire investment because of a single bad move.
Online trading is extremely convenient. You can invest in equities, forex, CFD trading or any other type of market you like. To get started, you simply need to open a trading account and you’re good to go. You don’t even need to make a particularly large investment to get started, either. The list of benefits mentioned above make online trading a very attractive option. However, there are two sides to each coin. To succeed at online trading, you have to watch out for common pitfalls and unexpected changes, stick to your trading plan, and base your decisions on thorough research.
Authored by Harry Miller, a Relationship coach, Content specialist and Blogger.
He write for https://www.bernstein-bank.com/ and try to present his critical take on the latest socio-cultural trends that dominate the blogosphere. He live in Brazoria, TX. His relationship status is single.