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Online Trading Versus Traditional Trading

By Expert Author: Cassie Smith

If you are even remotely interested in the trading game, then you have heard in all likelihood of online trading. Online trading is nothing more than the action of playing the stock market by placing an order through your broker using the internet. If you have an account with a broker, there is a great chance your trades are being made online. However, the process may not be as streamlined as you think since there can be intermediaries in the online stock trading game. In this case, your trade can be considered offline. Online trading and offline trading can be confusing so its important to make the distinction between the two.

Benefits of Online Trading

If you are not placing a trade via an online trading platform installed on your PC, phone or tablet, then you are not trading online. If you are calling anyone to place trades on the stock market, then you are an offline trader.

Online stock trading is cheaper than its offline counterpart. Offline brokers assign relationship managers to their clients. The relationship manager has both an administrative and advisory role, but they also take a percentage of your winnings on the stock market. By advising you on your online stock trading strategies, the relationship manager earns a commission of the brokerage paid by the customer.

Online trading brokers do not generally offer relationship managers. Instead, customers can call their broker directly to seek advice regarding the stock market and online stock trading. When it comes to actually placing a trade, they log on to the online trading platform of their choice and the customers do it themselves.

Getting Started in Online Stock Trading

In order to begin online trading, you need to find an online broker who is reliable and with low brokerage costs. Ensure that the broker is a registered member with all major stock market exchanges and relevant organizations; that they spell out all the rules, regulations and costs in written form; that they record their business phone calls so you can have proof of your verbal authorization concerning any of your online stock trading actions; that they need your express verbal agreement to perform any type of action on your behalf on the stock market.

From here on, you will be self-empowered to make your own stock market decisions and you will become savvier in the area of online stock trading.

If you take the more traditional route of stock market trading, the relationship manager you are provided with will promise you unbeatable brokerage rates. In reality, the more trades you make on the stock market, the lower you can negotiate your brokerage rate down with your relationship manager. This is unfortunate as an average investor who might trade a few times a month will have to pay the same rate to their broker.

Online stock trading brokers charge much lower brokerage rates. If you are serious about online trading, stick to a broker with little to no overhead costs.

So if you are not happy with your current broker, look into online stock trading and make the best of what the stock market has to offer! Online stock trading has never been easier, safer and more comfortable!

Cassie Smith is a professional copywriter for more than 10 years. She has been writing various articles and blogs on Seo services, Internet marketing strategies and online stock trading. In this article, she carries out comperative study between online stock market and traditional trading process.

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