The Booming Trend of Online Trading: A Guide For Beginners
Online trading is booming, and the investors are continually embracing the latest technology which allows the investors to trade shares quickly and easily as well as managing their portfolio from their smartphones. Stockbrokers such as the CommSec’ have reported that their latest financial data have increased by about 30 percent and approximately 2000 new accounts opened every week. The major stocks being traded online include Commonwealth Bank, Wesfarmers, Telstra, and Westpac that showed sharp inclines in the past year.
In many countries, over 50 percent of investment traders can buy and sell shares using a tablet or smartphones according to Investment Trends. This demand has prompted many stock traders to introduce new online investment apps that can be download by the investors from a central repository or popular app stores such as Google Play and iTunes for them to quickly and efficiently manage their portfolios and price monitoring.
Social media sites are also becoming another thriving investment tool with stock traders. The social media is today being used as a platform to get real-time information across to their investors. Stock brokers have made stock broking affordable and available to many people. Away from the time when people relied on the services of a stock broker, today, individuals can buy and sell their shares themselves using a computer or smart phones.
Before you start engaging in the new way of stock trading, it is important to become familiar with the tools of trading, involve yourself with the daily reports that drive the stock market shifts and the theory behind it. The stock market works in a system of supply and demand. The strategy is to purchase shares in a company that other investors will be eager to own a share of the enterprise over time. When a particular stock become popular enough, traders usually start competing for it and bid up the sale price.
One of the theories used in stock trading is the fundamental analysis which relies on the utilization of the public statements and company’s financial reports to find out the health of an enterprise. The information you need includes news releases, income statements, balance sheets, and quarterly earnings. For many reputable companies, the reports are easily accessible and searchable online, and it is easy to find out how to read them.
The second school of investing is referred to as technical analysis. The technical analysts believe in the behavior of the swings in stock prices that they follow a particular pattern that can help the traders learn and profit. However, the technical analysis method is not as widely accepted as the fundamental analysis method. However, many of the investors believe both can be critical and a safer strategy than relying only on technical indicators.
You also have to choose the online brokerage because choosing your online brokerage partner is paramount to how you perform in the bottom-line. A broker like CMC Markets has shown impressive growth over the past few years scoring well in a range of markets and offering over 10,000 available products. You should never rely on your guts instincts or tip from a friend anymore. The factors to consider include the costs of each service provided by the brokerage firm and the level of support you may need from them. If you are a beginner, all you want is to start with a company that can give you a personal advice for your investments. The broker you choose should offer an opportunity for growth and offer tools to engage in margin trading, advanced trading and short selling.
While having the information from a source such as financial news website and live podcasts can help you know where to put your money, reading is not supplementary for an experience. If you are looking for a zero-risk way to gather your information, then the online stock simulator such as the MarketWatch, Investopedia, and Wall Street Survivor can be very helpful. You also have to practice trading in the penny stocks market.
Online stock trading may sometimes be complicated, but with the right knowledge and tips to make crucial decisions, it can generate good significant returns. For instance, you should never invest in the money you cannot afford to lose. Always begin you investment life slowly and make intelligent decisions about your money. Another tip is to ensure you diversify your investments, don’t be too attracted to easy money and don’t engage yourself in online trading if you have no time for your research.