Why You Need to be Trading Online
Written by OnlineLoan on 16:35Why You Need to be Trading Online
By: Jack Green
Despite the growing availability of cheap or free resources for online trading, many investors, particularly older generations, still cling to the notion that they ought to interact directly with a stock broker in order to make a trade. "Call my broker" is the phrase they use. But why? What exactly is it that a live broker gets for you?
It certainly isn't saved money. Trades executed live via a broker cost a great deal more than self-directed trades in just about every context. It isn't speed, either. Executing online trades is much faster than calling, waiting to get a human on the horn, chatting about the weather, then making sure your broker hears your order type, number of shares, and all the other details correctly. It isn't quality of execution, either. Most live brokers use the exact same system to execute their trades that Web trades are executed on.
Some may say that advice and guidance are the primary benefit. They should take care, however. A broker at a full-service house is essentially a sales position. Their income has absolutely nothing to do with your investment success. Rather, they make money primarily based on how often you trade. It always pays to question the advice of one who has a conflict of interests of this sort.
So if it isn't quality, price, speed, or good advice that's keeping you away from online trading, what is it? I think for many it boils down to discomfort with the technology. This can be remedied, however. Most online trading sites offer virtual online trading where you can learn the platform without risk. So ask yourself, why not give virtual online trading a try?
You can start off by mirroring the trades you're making with your live broker. Track the difference in commissions you'd pay with an online trading platform. Many traders are surprised at just how big a difference trading online can make in their overall returns.
If you're still clinging stubbornly to your live brokerage service, you really would be better served taking the plunge and giving online trading a try. It really is a much better value for most investors.
You can find a thorough introduction to online trading at http://www.onlinebrokertrading.com . Jack Green is an attorney and published financial author.
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