Online trading is the act of buying and selling goods or financial products on the internet. The investor buys and sells using an advanced online trading platform. Online trading includes trading in international currencies, individual stocks, futures and other financial products.
Most investors trade online through online brokers who split into forex and cfd brokers. An online broker is a brokerage firm that offers financial services on the internet. Unlike traditional brokers, the trader is not in contact with the broker. Everything happens on the net.
These brokerage companies offer online trading platforms to all those who want to trade in major financial markets.
In the past who wanted to invest in the financial markets, they had to call their brokers to make the trade for them, making this procedure very long.
Today, thanks to online trading, investors can buy and sell financial securities on their own account, and you can also make multiple transactions at the same time.
More importantly, the modern online trader can do all these things quickly. In fact, almost instantly.
Just open an account on a trading platform, make the purchase of a particular stock and while waiting for this price increase they can already start collecting dividends or attending shareholders’ meetings even though this is a rare thing.
Most of the time the investments that are made are made over the long term perhaps trying to buy securities from companies that distribute substantial dividends to their shareholders over time.
On the stock exchange this type of operation is called “drawer securities”.
In the event that you decide to trade faster then you will have to use derivatives, this is nothing more than a financial instrument whose value depends on another that is called underlying.
Know however that using the derivatives you will not have the right to any corporate dividend and you will not be able to participate in the shareholders’ meetings, however, these give the opportunity to earn both that the stock falls in quotation and that the stock rises, the important thing is to be able to guess the future trend.
Try Trading Online with a Free Demo Account
Today we would like to talk to you about the brokers offering the Demo Account Trading option, trying to deepen the subject in order to make you better understand the importance that this option offers to all users who want to take the path into the exciting world of online trading.
This leads most traders to increase their profits because they are able to optimize and refine their techniques and in a short time they become true experts in financial investment.
Calculate that online trading has been continuously expanding for many years now, and more and more traders decide to take advantage of this market, which is not surprising given that it is considered the best business to engage in online.
There are no other activities that allow you to reach certain profit thresholds that online trading offers, not even a traditional job can do it.
Calculate that a neophyte, choosing the right platform can get to earn immediately on 500/600 euros per month with the possibility of increasing these earnings day after day, earning more than a thousand in a very short time.
Of course it’s not as simple as you might think, especially in the first months of activity that are the most difficult to manage.
In the early stages you have to be very careful about any disappointments you might encounter and try to learn from the best.
Everything can be done completely free of charge through the use of a demo account that does not require any kind of capital investment but offers the opportunity to experience without risk.
Advantages of Online Trading
The arrival of online trading has brought several benefits, including reduced costs for both investors and brokers. This has done nothing but encourage people to make their own investments on brokers who have set lower fees for online transactions compared to those traded over the phone with a representative. Usually, in the past, investors used to have to call their brokerage firms that handled their investments. They would request a purchase order. The broker was responsible for making the market price known and confirming the purchase order.
When the investor wanted to transfer some of his money from the trading account to the current account, or vice versa, he always had to call to make that transaction request. But today, thanks to the advent of the internet, more and more investors are using online trading platforms to make investments in complete autonomy. This system has made the rates lower, and as a result more people have been able to access the financial markets.
Once this could not have happened because many people were not able to afford the high fees of a personal advisor or a telephone transaction. With online trading brokers have saved, for example, on personnel costs.
Another of the advantages of online trading is the optimization of the speed with which transactions are executed and resolved, this is because, compared to the past, it is no longer necessary to copy, store and insert paper documents in electronic format. Nowadays, transactions take place within seconds, compared to a phone call that had to go through different confirmation steps before the representative could place the order.
Each online platform provides different securities, so not all of them are available to be traded online, depending on the broker. For this reason it is important that the Trader, before registering with the trading platform, inquires about what a broker offers.
How Online Trading Works
In our country is already present for a long time the online trading market (also known by the acronym TOL), is carried out via the internet and gives everyone the opportunity to earn money by making transactions of various types by making a simple purchase and sale of assets.
Users will be able to make trading operations while sitting comfortably in front of their home computer.
You can trade on various instruments such as government securities, bonds, shares and much more.
Obviously, being operations carried out via the internet, the cost of commissions is drastically reduced and the investor has at his disposal much more suitable means to carry out the study of the various securities.
In fact, online trading is accompanied by various illustrative charts on the market trend to use to make your forecasts giving much more security to your investments.
Most of the time we turn to companies that deal specifically with providing this type of service.
There is no specific guide to study the basic techniques even if online there are many tutorials on the subject, use those to learn because they are still very good since they were drawn up by people with some experience.
Online Trading Platforms or Brokers
On the web you will find a lot of brokers offering online trading services and each of them has common and different features.
The first thing to check when choosing a broker is that of legality, you will have to check that it is registered and regulated by the control bodies such as CySEC for Europe and CONSOB for our country.
This is the only way you can be sure that the broker you are going to choose will respect the rules and constantly receive the necessary controls to ensure greater protection and security for investors.
Checking which brokers are regulated and which are not is very simple, either you can find out which ones are regulated and which are not, or you can go directly to the portals in charge of control and check the presence of the company we are interested in.
Another thing to check will be the various levels of spreads available and whether there are any commissions on deposits, withdrawals and every single trade.
Also the educational side is very important, a serious broker must have a section dedicated to education with specific sections, e-books, video courses that logically must be provided to newbies in a completely free way.
Financial Leverage In Online Trading
Leverage is a type of instrument that is offered by the various online trading platforms, through their use the trader has the possibility to have a much higher capital than he really uses.
There are various values of leverage and are as follows:
Among these, the most used leverage is 1:100, in a nutshell it means that if a trader decides to invest 100 euros, using the 1:100 leverage he will actually have 1,000.
Leverage offers the possibility of receiving much higher gains but be careful because it will also increase the risk factor with higher loss rates.
To date, although there is a very high risk, most traders use it very often.
Of course, the trader will have the chance to earn much more money and much faster but this is closely related to the fact that the forecast that will be made is accurate.