Online Trading System – The New Age Business Formula

Online trading system is the trading system which involves internet rather than physical transaction of funds. It is the act of buying/selling orders for financial securities/currencies with the use of brokerage’s internet based proprietary trading platforms. The use of it increased dramatically in the late 90’s when people got to know about computers and various electronic devices. High speed computers and internet connections gave the concept of online trading. The platform for online trading system is provided by internet based brokers and available to everyone who wishes to make money from the market.

Benefits of online trading –

Lower Fees – One of the best advantages of online trading is the reduction in transaction costs and high fees associated with the traditional brick and mortar brokerage firms. If we take a closer look at shares and stocks price, online trading platforms offer cheaper rates as compared to brokerage firms which are physical in form.

More Control and Flexibility – As time is a major factor in the trading system so speed plays an integral role in carrying out the transaction. This is why the online platform is used to trade stocks and derivatives.

Ability to avoid Brokerage Bias – Breaking the brokerage bias by trading online is a simplified way of avoiding brokerage bias.

Accesses to online tools – If we ever look at the stock prices then we will find out that trading online has a cheaper price attached to it.

Monitoring Investments Real Time – The platform gives us an outlook of the daily making and losing of money through real time monitoring. It can make us aware of the stock prices and bonds through email or a call.

Disadvantages of Online Trading –

Easier to invest and in hefty volume – Large volume of stocks are invested through online platform as it is easy to buy and sell shares even while in bed. There is always a risk in investing in poor stocks as this will hamper the investment choice.

No personal relationships with the brokers – Trading on your own would be deterrent as this will lead to making bad investment choices. Brokers help in making the right decision in buying the right share.

Internet Dependent – Risk of losing out on a profit enabled share is really high. It is equivalent to living at the mercy of internet. If the internet is too slow then a worthy share may lose out in price.

Addictive in Nature – Termed as gambling trading, stock trading can be fatal if not supervised properly. A man making a profit at the start may find it substantial and materialistic but at the end of the day might have invested in shares that have zero value attached to them. So professional guidance is utmost required while trading online.