Four Simple Steps to Online Stock Market Investing

Online stock market trading is an interesting concept — you can use an electronic broker to make trades, and track them from anywhere you can access a computer.  However, online stockmarket investing is not the holy grail.  There are some pitfalls for those who are not market savvy.  In this article, I’ll give you four steps to making the most out of online investing.

First, you must understand the basics of how the stock market works.  Many people who use brokers, use full service brokers because in addition to being able to make trades, they also get expert advice.  Their broker will give them suggestions on how to better manage their money, and also offer additional tips on how to employ things like stop losses, to protect your investment.

If you’re unsure about how the stock market works, I would recommend you educate yourself first, or use a brokerage firm before you start investing on your own online. 

Second, familiarize yourself with the process.  Online stock market investing involves not only the ability to pick good stocks, but the ability to use software and interfacing.  Make sure you are aware of the technology involved with the online service you use.  Most people like to go online because it saves them in commission fees, compared to a face-to-face broker.  However, make sure it’s not costing you time and stress as you try to figure out how to place an order.

Third, use a well-known online brokerage firm.  Otherwise, your information may be at risk.  Not only could your portfolio be hacked, and orders made without your approval by someone else, but you could suffer from identity theft as well.

Fourth, don’t get seduced by online stock market investing.  Some people who use online investing often begin checking it every five minutes, seven days a week.  The fact that their portfolio is at their fingertips is too hard for them to resist.  Often times if you try to micromanage your investments, and you’re not a professional trader, you will end up costing yourself money.  Oh, and you’ll have no life either.

Keep these four tips in mind when doing online stock market investing.  If done right, online investing offers a great way for you to save money on commissions, be able to have more freedom with your trades and buy and sell shares of stock in the comfort of your own home.