Understanding Online Share Trading

Trading stocks on a computer (Photo credit: ota_photos)

Is there a secret to online share trading? The tools and techniques you use for offline trading are very similar when you trade online. The knowledge and experience comes through when you learn about your market. After many years you learn to develop systems, patience, and to see the world’s markets a lot more clearly.

Continue to learn

If you want to be a good online share trader you must spend time learning your market. Investing the time to learn your market is imperative if you want to be successful with online share trading. With this knowledge you will be able to adapt to any market situation like the Australian share market, or other markets that have their own individual behavior. 

Build a System for Online Share Trading

In any system you need to plan for expected and for the unexpected situations. Build your system and use it when you are trading online. There will be times when your system doesn’t work. But it’s best to stick with it and ride the tide till it’s over. No system works every time. When your system fails you need to find out where the problem is and adjust your strategy.

Wait until it’s ready.

Using patience and waiting for the deal to come to you is just one more habit that a share trader learns about at the start their career. Patience is one of the share trader’s best tools. 

Understand the big picture

Seeing the big picture and knowing the details are how an online share trader understands the markets and trades successfully.

When you see the big picture you understand that just because your equity drops in price there is no need to sell a position. You have learned, through experience, some trades go down but later increase in value. Only a trader who has been working in the business has the discipline to stay invested and not run.

Online share trading has leveled the field so many more people can participate in trading. Today anyone can trade, you do not need to have a pro or have a pro help. The average man or woman can do well trading in the market. All it takes is for the new investor to be educated.

Share trading, can be a risky endeavor, so it is best to be very knowledgeable in all aspects of the trade to avoid losing your hard-earned money.

Investing in Your Future

A great way to boost your bank balance in the build up to your retirement is to invest your money. The advice for mature investors remained the same for many years; focus on assets that will guarantee a safe return, rather than those that offer the biggest capital or growth potential. In recent years however, people have been taking note of the fact that people are living longer; therefore opening up a whole load of other exciting investment opportunities for retired people, as longer investment times mean a better chance of risks eventually paying off. Whether you want to play it safe or take a chance, there are a number of different ways you can invest your money later in life besides just placing it in a savings account. 

Bonds

Purchasing a bond involves the lending of money to a business or government which they will pay back with interest. This is definitely an option for the safety conscious as investing with a well-established, reputable company or official organisation more or less guarantees a return on your money. Profits may be limited but the stability of your money and often quick return times make it a great asset for a mature investor’s portfolio. 

Stocks

Buying stocks (also known as equities) essentially gets you part ownership of a business. You gain the right to vote in shareholders’ meetings and you benefit from shared profits that are distributed amongst owners – referred to as dividends. This is a great option for the more adventurous investor, as stocks are high risk assets with the potential for great rewards. Nothing is guaranteed with the purchase of a stock; its value can fluctuate daily, meaning your investment could flourish and soar just as easily as it could plummet. 

Gold

The value of gold is more stable than most currencies and even increases as the US dollar decreases in purchasing power; acting as a great remedy against inflation. There is a growing level of supply and demand for this precious metal and so your purchase will never be wasted. There are also a number of different ways to buy and sell it, from online brokers to jewellers and government mints, with many others in between. With growing interest and value guaranteed, investing in gold – and digging out any old family heirlooms – can be a great financial opportunity to utilise upon your retirement. 

Online Investments

The internet has made finding suitable investments a much less daunting task. Sites like Nutmeg allow people to invest anything from £1000 upwards and a team of professionals will split your money between assets to reduce risk. This is a great investment opportunity for those who want an easy retirement with a bit of extra cash, as the Nutmeg team monitor and move your money to capitalise on the success of certain areas and avoid weaknesses in others. You can be as distant or involved as you want and there are no fixed terms; your money is yours to withdraw whenever you want.

Gone are the days when the only way for a retired person to boost their money was to stash it away in a savings account. The world of investments has truly opened up and can finally be accessed and utilised easily, regardless of age.

Julie runs financegirl.co.uk, a finance blog which aims to bring the best online finance news into one place as well as offering money advice and tips for savvy consumers. A regular contributor on finance blogs, she can also be found @financegirluk.