The invention of Internet has brought about many changes in the way we conduct our lives and our personal business. We can pay our bills online, shop online, bank online, and even date online!
We can even buy and sell stocks online. Traders love having the ability to look at their accounts whenever they want, and brokers have the ability to take orders over the internet, unlike phones.
Most brokers and brokerage houses now offer online trading to their clients. Another great thing about online trading is that fees and commissions are often lower. While online trading is great, has some drawbacks.
If you are new to investing, having the ability to actually speak with a broker can be very useful. Brokers work for brokerage houses and have the ability to buy and sell shares on the stock market. You May wonder if you really need a broker. The answer is yes, if you intend to buy or sell shares on the stock market.
Stock brokers are required to pass two different tests to get their license. These tests are very difficult, and most brokers have a background in business or finance, with a Bachelors and Masters degrees.
is very important to understand the difference between brokers and stock analysts. An analyst literally analyzes the stock market, and predicts what will or will not do, or how specific stocks will perform. stock broker is only there to follow your instructions to either buy or sell stocks, and not to analyze stocks.
In most cases, the brokers earn their money from commissions on sales. When you instruct your broker to buy or sell stocks, they earn a set percentage of the transaction. Many brokers charge a flat fee per transaction.
There are two types of brokers: Full service brokers and discount brokers. Full service brokers can usually offer more types of investments, can provide you with investment advice, and usually paid in commissions.
Discount brokers typically do not offer any advice and do no research - they just do not like to ask them to do, without all the bells and whistles
.Many people who trade exclusively over the Internet will often use the services of discount brokers.
If you are not stock market savvy, online trading can be a very dangerous thing for you. If so, make sure you learn as much as you can about trading stocks before the start of trading online.
You should also be aware that you do not have a computer with Internet access attached to you. You will not always have the ability to get online to trade. You need to make sure that you can call and talk to the broker, if applicable, using online brokers. This is true whether you are an advanced trader or a beginner.
is also a good idea to go with an online brokerage company that has been around for awhile. You will not find one that has been in business for fifty years, of course, but you can find a company that has been in business that long and now offers online trading.
Again, online trading can be exciting and profitable - but that's not for everyone. Think carefully before you decide to do your trading online, and make sure you really know what you are doing!
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