Trading online has become very
popular in today’s time when you just need a trading account and after
that you can trade comfortably while sitting at your home. Apart from comfort
of trade it provides various facilities like:
• Ease of
buying and selling of shares.
• Online receipt of contract notes/ trade statement for the transactions.
• Direct deposits of dividends/ bonus amount etc to account.
• Various trading tools for ease of making investment decision.
One
click of mouse button is of ample importance while trading online because
sometimes it is what that draws a line between your winning or loosing the
game. Trading online is
very interesting but you have to be a bit careful as well. The
process of trading is very easy but making money is a
bit tricky. All you need is a trading account and a little bit of caution to
operate the same. Below are some
do’s and don’ts while trading online:
Prices
change at the blink of eye and the transactions are not always in real time. Moreover the speed of your
internet might cause delay. So always make sure not to change your decision
until the last moment. Take time examining the stock and make decision ahead of
time so that you don’t loose while in panic.
An
important feature of stock
markets is volatility. So if
you don’t keep a close eye on how your stocks move while placing an order, you
might land up in losses.
Online
trading is a matter of trust between you and your broker because there is no in-person
contact. But you can’t leave everything on trust. Make sure your broker provides you detailed email statements
and contract notes of executed trades.
Online
trading provides facility to place limit orders. If you don’t have sufficient time
to keep track of the stock prices, fix up a buy/sell price based on your
judgement and go for limit orders. Moreover limit orders help you take ample
advantage of volatile session during the day.
In
addition to the brokerage rate being paid, prudent investor should always be
well aware of the various
Fees and commissions charged by the broker for various
services offered like Mobile services, buy sell alerts, reporting, chart and
other tools to facilitate easy trade as they really affect your net earnings.
For
novice traders, it’s a suggestion to always trade with stop losses. Set your stop loss to level to avoid
the risks associated.
Even
though chances of default by a good brokerage firm are nil but a smart investor
should always keep track of credit/debit of money in their bank accounts or
transfer of shares to/from the demat account accordingly for each trade executed
because technical reasons might lead to discrepancy which cannot be avoided.
Prevention
is always better than cure.
Security is another important factor for online traders. It is advisable always
to follow security
measures related to passwords and other personal information
while login into the websites to eliminate chances of theft of identity and
information.