Are There Any Drawbacks to Online Trading?

There are things that can make online trading dangerous, but the dangers can be avoided with some care. One thing that is different is that you are not actually talking with a live person every time you are making a trade. This means that you might be missing out on some of the advice that you would normally be getting from your broker. You could end up buying the shares of a shipping line whose flagship vessel just went to the bottom of the ocean. While that is not likely, you can get the point. This is not a big deal for the seasoned investors, but if you are new to the game it might be nice to get some advice when you set out to buy or sell penny stocks.

Sometimes technology is not without its frustrations. When you are dealing with a broker personally you simply instruct them on what to do and they do it. How they do it is not your problem, that is their job and they will figure it out. There are times when you get everything set up and installed as it should be and it just plain doesn’t work. Computers aren’t like bicycles. You often can’t tell what is wrong and you need to get someone under the age of 18 to come in and fix it for you. That can be frustrating. Computers crash, power goes out and your kids can download a virus. Beware that there can be barriers to trading online to go along with the conveniences.

While you have the convenience of using your computer to trade, keep in mind that if you are using a desktop, you probably have the software installed on it to do your trades. If you plan to go away to the cottage for the weekend or on vacation, that means no trades unless you pick up the phone and instruct your broker the old fashioned way. It might be a good idea to try this at least once before you go away just to make sure that you can do it and there won’t be any barriers to making a trade. You can probably go online somewhere else to get information but to execute the trade you will need to know how to contact your broker.

A laptop is a better way to go if you have not already bought a system to use for your online trading. Buy one that is powerful as you don’t want to be back in the market in a year or two because the hardware is dated. Think about getting a voice-over-internet-protocol phone number. You will pay much less for phone calls from anywhere in the world and you can use your laptop to do it. Get a headset that is made for just that purpose and you have a traveling office that will save you money.

You will probably agree that the benefits of online trading far outweigh the drawbacks, just take the time to get set up correctly and educate yourself and you will do just fine.


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