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Learning To Trade Online

Online Trading Series

Introduction

This is our series on Learning To Trade Online. We are going to give you the information you need to begin buying and selling stocks online. Although these articles are geared for online trading, this information will be fine if you prefer to use a regular broker. As with all things in life, you trade at your own risk. There are a few situations that you should be familiar with when trading online. We hope to educate you well enough so you can avoid making any mistakes that could possibly cost you some money.

We will focus on trading (buying and selling) stocks versus mutual funds since the price of mutual funds typically does not fluctuate significantly in short periods of time. One of the rules to trading online is that you become your own stockbroker. What this means is that you are responsible for all your actions. If you make a mistake, it is your fault and it is possible that your online broker (the company on the Internet that you place your trades with) will not or cannot help you out of your predicament. This is not to say that trading online is risky. In fact, it is very easy and there are many safeguards to use to reduce your chance of making a mistake. In this series, we are going to lead you through the different ways to set up your trades to minimize the possibility of making a very costly mistake and trade safely online.

One of the challenges and fears with trading online is that you need a dependable computer and a "live" Internet connection to your online broker. If you have a computer problem or you can't get connected to the Internet when you want, then you can't trade online, RIGHT? What if your online broker's web site crashes and you can't access your account? Well, with most online brokers, you can use alternative methods to trade online. You can get on the phone and call them up live to place your order or you can use a touch-tone telephone system to place your order. In the case of calling in live, you will not be able to ask for advice. The people who take your orders are not allowed to advise you on your trade beyond giving you the current stock price. The challenge is if you are using the telephone to call in your trades because of technical problems with the online broker's web site or with your Internet access then probably everyone else is experiencing these same problems also and you better be prepared to wait on hold. There is no need to worry. Online brokers web sites rarely crash and the press really exaggerated the news when it has happened in the past.

Overall, the benefits of using an online broker far outweighs the use of a full service traditional broker if you are comfortable in selecting your own investments. If you need hand holding and specific investment advice, you should consider a full service traditional broker.

Next in our series Learning To Trade Online is
"Is Online Trading For You?"

 

Note: Past results is no indication of future performance. This information is provided to you as a starting point to BEGIN your research and is not to be construed as an offer to sell or a solicitation of an offer to buy. The information presented in this article represents MsFiscallyFit.com's feelings and opinions about a particular stock or mutual fund on the specified date and is not meant to be a specific trading recommendation. Stocks and sector mutual funds tend to be riskier and more volatile and should be considered by investors that have long term investment timeframes, a tolerance for risk and are willing to accept unplanned volatility. Our opinions are based on sources believed to be reliable and written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness or the results obtained by individuals using such information. Readers are urged to consult with their own financial advisors before any investment decision is made and all information contained in this information should be independently verified with other sources. Partners, employees and affiliates of MsFiscallyFit.com may or may not hold positions in any of the stocks or mutual funds included in this information. MsFiscallyFit.com does not receive any compensation of any kind from the companies that we express opinions about. As always, each reader is responsible for the risks and consequences of their own investment activities and in no event, shall MsFiscallyFit.com or its employees, partners or affiliates be liable for any damages, direct or indirect, that may result from the use of this information.
 

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