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For some people, speed is everything when trading online. A person can trade methodically and at her own pace. However, there are more and more people trying to "play" the small movements of the stocks to earn a quick profit. Usually, these are day traders. Even if you are not a day trader, this doesn't mean that once in a while you want to catch the right price at the right time. Sometimes this will call for the speed of an "Express Server". What should you use?
Confirmation Screens
Even though you act as your own broker when you trade online, there are many built-in safe guards to help protect you against making a mistake. One of these safe guards is the use of a confirmation screen.
For most online brokers, your order screen usually consists of a form with a few boxes to fill in such as: buy or sell, # of shares, stock symbol, type of order (market, limit, etc) and length of time for the order to be open (good 'til canceled, good for the day only). After submitting your order, a second screen appears called the confirmation screen. At this point, you must now enter your password on this screen to confirm your order. This allows you the opportunity to cancel your order if you entered your order improperly (you set up a sell when you meant to set up a buy) or you have changed your mind. Once you confirm the order you become responsible for the outcome of the trade. If you made an order entry mistake, this second screen, the confirmation screen, allows you to review your transaction a second time and change it before you submit it. This is a very important safeguard to protect you against any mistakes you make while entering your order. You would not want to buy 1,000 shares of a stock when you only wanted 100 shares.
Express Servers
Some of the online brokers offer an "express server". No, this is not a cute Italian guy who serves lattes. An express server is a direct order (buy and sell) entering system. When submitting an order with an express server, you will not get the confirmation screen to review your order a second time for accuracy. With an express server, you get one opportunity to get it right. Only very experienced traders should use this system. Express servers are usually used by hyperactive traders (people who buy and sell multiple times a day or hour) because of the speed of order execution offered by the system.
One of the advantages to using an express server is in the buying and selling of volatile stocks. These stocks move in price very quickly and a very fast execution could mean the difference in an extra $25 - $100 made or loss on just 100 shares. Sometimes you can try to time the market movements when using an express server.
If you are new to trading online or don't need the speed of execution, you probably don't need to use an express server. Stay in your comfort zone. You will be less likely to submit an order that you made a mistake on while you entered it. However, if you are experienced and looking for more speed of execution, check out an online broker who offers an express server.
Next in our series Learning To Trade Online is
"Go To The Market Or Go To The Limit"
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