Online stock trading is a regular system of buying and selling of stocks of various companies traded at the Stock Exchanges through the medium of Internet technology, telephone and other communication systems.

Summary:

1. Online stock trade and its meaning.

2. Importance of Online stock trade

3. Methods of doing stock trade

4. Advantages of Online stock trade

Online stock trading is performed with computers with Internet. It is important to logon to a stock exchange online broker code and password, and give details of companys shares which are to be sold or purchased and at what price. Just within no time, trading takes place at the click of a mouse. It is also important to take note of all the instructions and an understanding of software systems in order to participate in online trading. Online stock trading is a global business that is expanding with the advantage of Internet technology.

There is so much of information available on the internet to guide an investor about online stock trading, stock market news, market conditions, which stocks to buy or sell, the low and high of stock prices, technical analysis of stocks and to understand how to make profits through online stock trading.

This valuable information can be turned into profits only with appropriate knowledge level without which extreme losses of money may occur to an investor. Online stock trading has emerged as a powerful tool of buying and selling of stocks which is the only possible means of making quick and speedy money in a corporate and legal manner. This is also one of the most risky areas where large amounts of money can be lost. It is very important to keep a proper education of online stock trading, knowledge of stocks and a constant follow-up with the stock market which will bring experience to an investor. Also seeking an assistance of an online broker is also helpful for timely advice and to know about the trend of stock market.

Online stock trading does not involve physical presence of an investor for the purpose of buying or selling of stocks. The accuracy must be maintained while providing details of stocks which will be taken on record for online stock trading. The system of online stock trading is fast and accurate which will deliver profits to investor without any difficulties. Long term traders, short term traders, stock consultants, stock and finance consultants, online stock brokers are all the people who assist investors to buy and sell stocks through online stock trading.

There is every possibility for a stock to trade up and down due to several market reasons. Resistance and supportive measures have to be considered in rolling stocks or in channel stocks. There are also possibilities of bouncing back of a particular stock after a short period of recession.

A stock can be purchased through online stock trading by placing an order to an online stock broker. There are four types of orders viz., market order, limit order, stop order and stop-limit order. It is always good for an investor to place day orders which gives protection until it is cancelled. There are number of online brokerage services who offer and advice investors on payment of brokerage fee for buying and selling of stocks. The Online broker would deliver the services of online stock trading to an investor via the medium of internet technology and software systems. It is important for an investor to own a computer system for the purpose of online stock trading which makes the trading easy and comfortable.

There are some important points to be noted by an investor while doing online stock trading. To understand the trend of market, decision making when to buy and when to sell, proper logic and reasoning, planning every buy and sell, choose one particular of trading i.e. whether floor trading or online stock trading in order to avoid risky system and choose an easy trading which is obviously online stock trading. Educate and keep proper knowledge of stocks, measurement of risks and earn profits.

The biggest advantage of online stock trading is, even a small amounts of investments also are encouraged by a new and less experienced investor. The system of online stock trading is easy to operate which is with a log-in account which will be opened with an online broker. The entire account information of complete transactions taken place within a period of time are recorded which will be made available to an investor on logging into an account. An investor can plan, discuss, and negotiate with online broker before executing any orders. Detection of fraud is very easy to identify as every transaction is transparent. Also a full time investor can truly concentrate on online stock trading through a thorough analysis of stocks and become a professional investor. Online stock trading, with full expertise level of knowledge and an awareness of risks, if handled properly, can result in making profits easily on investments. The system functioning of online stock trading is basically at low cost, while the returns are effective and rewarding.

An investor must make a proper assessment of profits and investments before entering online stock trading, whether a short term investment or long term investment, calculation of return on investment, companies financial status, payment of dividends and a appropriate timing of selling or buying of stocks. Safe investments are those which are invested in long standing companies which return regular payment of dividends to investors whereas profits are derived from stocks which are regularly traded in midcap, smallcap market which has to be monitored by investor and accordingly instruct online broker to buy or sell through online stock trading. A moderate and a competent level of knowledge of technical analysis of stocks are benefiting in order to become proficient in online stock trading.