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Investing in Online Trading

Online trading is the most viable alternative available as opposed to using a traditional full-service brokerage firm. It is not only convenient but also allows you to invest in a wide variety of securities. With online trading, you can buy and sell stocks from the comfort of your home. Online trading is generally done through discount brokers. Their approach differs from traditional stockbrokers in that they merely provide the platform for execution of trades without any additional services of financial advice. However, this means that online trading with a discount broker is considerably less expensive than investing with a traditional broker who levies huge brokerage fees.
Benefits of Online Trading

It always helps to know exactly what the benefits to online trading are before making the decision to go ahead and do the same. Understanding the advantages to be made makes it easy to determine how good of an investment strategy it could turn out to be. The main advantages are as given below:

  • Lower Fees
There is a reduction in the amount of transaction fees that is generally paid. Moreover, you no longer need to pay heavy brokerage charges since discount brokers charge a flat fee (as low as Rs.20) per trade. This is as opposed to traditional brokers who levy a fee of 0.3-0.5% on the total transaction made.
  • Increase in Flexibility and Control
One of the most important requirements of a trading portal is its speed. Not only do discount brokers provide you with access to their own trading portal, there is also a guarantee of performing trades at high speed. In trading, time is of the essence. This means that being able to execute a trade almost immediately, as is the case with online trading, proves to be a great advantage. There is no danger of increasing costs due to the inconvenience caused in the course of offline trading.
  • Avoiding Brokerage Bias
There is always the possibility that the financial advice given to you by a stockbroker is due to their own bias. They could give advice benefiting themselves in the form of a commission for selling certain products or mutual funds. Receiving biased advice always opens up the possibility of a situation which is good for the broker but extremely bad for the investor. By using discount brokers, you eliminate this possibility of getting unethical and biased broker advice.
  • Online Tools
There are various tools offered by discount brokers in addition to their trading portal that allow a customer to make better trades that are optimized to get the maximum benefit. These could include interactive investment performance charts, for instance. The tools are designed to provide valuable information to any customer.
  • Real-Time Monitoring
Through online trading sites, you can generally access information such as streaming data that gives you an idea of how your investments are performing in real time. This one-stop solution for looking at how your investments are performing can prove to be very helpful in making decisions about how and where to invest in the future as well.
Investing in Online Trading Investing in Online Trading Reviewed by Lokesh kumar on 9:41 AM Rating: 5