Online Trading - Part-Time Hobby or Full-Time Job; It's Your Choice! Just a few short years ago, the financial markets were completely inaccessible to the vast majority of Americans. Only elites traded on Wall Street, or could afford the heavy commissions that stockbrokers charged. Most of all, average Americans just had no way of ever learning about stocks in the first place. Fortunately, the internet and online trading have changed all of that! Online trading experienced its heyday in the mid to late 1990's, during the age of the dot-com boom and bust.
For this reason, some people view online trading negatively. The truth is that the internet and online trading have been the greatest democratizing forces in the history of capitalism. No longer is stock ownership limited to a small group of men in the financial capitals of the world - online trading has turned millions of Americans into shareholders. And the best thing about online trading is that you can do it part-time with a modest sum of money, or you can make a full-time career out of it. It's your choice! Getting Started In Online Trading Before you begin online trading you need to ask yourself a few questions.
What is your ultimate goal or objective? What is the investment style most appropriate for your level of risk tolerance? Do you want to limit your online trading to stocks, or will bonds, mutual funds, exchange traded funds, commodities, futures, options, and other financial products be part of your online trading strategies? Develop a plan and stick to it - discipline is the primary key to trading success. Next, you need to open an online trading account. The industry leaders are E-Trade and Ameritrade, but others like ScottTrade, FirstTrade, Fidelity, Charles Schwab, and OptionsXpress should also be considered. If you're planning on trading large sums per transaction, then the trading fees will not be as important as the web site's overall features and platform. However, if you plan to begin your online trading career with just a few thousand dollars, then you may want to consider the online brokers with the lowest commissions.
FirstTrade offers trades for $6.95 with no minimum account balance. Online Trading - You're In The Driver's Seat You can spend as much or as little time online trading as you want, and make just as much money either way. For example, if you open an account with $100,000, and you only want to spend a few hours a day researching stocks and making trades, you can! The great investor Warren Buffett always said that he was most comfortable putting all of his eggs in one basket and then watching that basket very carefully.
While the patient Mr. Buffett is probably not a fan of fast-paced online trading, you can take his wisdom to heart by thoroughly investigating your chosen stock (or commodity, options play, etc.) and then using a substantial portion of your capital (i.e. 50 percent or more) in a single trade.
Conversely, if you wanted to be more of a full-time investor, you could spread that same $100,000 across 10-20 investments. If you're starting with just a few thousand dollars, online trading can still be lucrative. Many online brokers offer several free trades to people who open new accounts, and the minimum threshold to receive these free trades is usually a beginning account balance of only $2,000 or so. Use these free trades to your advantage! Hopefully, you'll build the assets in your account, but at the very least, you'll get your feet wet. With commissions as low as $7 per trade, online trading is affordable even to part-timers with modest startup funds.
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