Before the internet, trade used to happen in physical exchanges in the U.S. This form of trade was a person-to-person exchange that involved an open outcry. An open-outcry in trading refers to using hand signals and shouts made by brokers in a specific manner and sequence to convey trading intentions, intentions, and agreement of trading in the pits. Changes started in 1971 when the National Association of Securities dealers created Nasdaq. Nasdaq operated electronically using computers, which was the onset of the revolution in trading. With it came matched efficiency, and in 1992, Globex introduced the first trading platform that operated online and reached the market with a wide acceptance. As of now, online trading has taken over, and some of its benefits are:
Availability of endless opportunities
Trading online has endless opportunities. You can choose to trade stocks, indices, commodities, ETF, or forex. You can easily browse all through these markets online by using the eToro practice mode or any demo account that is provided by your broker. In institutions like the forex market, you find that you have many currency pairs to trade, including exotic ones that would be possible to trade without an online platform. Other than that, trading online allows you to trade in different markets since they differ in timezones. For example, when the U.S market is closed, you find the Tokyo session is open or the Sydney one. As long as you know how to convert the timezones, you will have the opportunity to trade.
No middlemen
You don’t need your broker to trade on your behalf by trading online. If you are operating on a budget, this will favor you since you will not pay for the service of the broker. However, it would help if you were careful not to blow your account in such a case. Studying trading before you dip your feet into it would be helpful. Furthermore, you will need to use the trial accounts in areas with virtual currency as you learn how the online trading platform works and how to analyze the signals and statistics that affect stocks and forex.
Convenient
Online trading platforms are available on various portable devices, and you can trade anywhere. Trading online also offers convenience by having multiple ways of funding your account, and the withdrawal process is also straightforward.
Ability to closely monitor your investment
As an investor, you need to know how your trades are faring, and Online trading gives you that option. These online trading platforms have sophisticated tools that you can use to monitor your investments and do your analysis. Other than that, there is also the option of automatically stopping losses to protect you from blowing your account should a trade go against your prediction. The online platforms also show you your loses and gains to help you strategize your trade.
Faster and cheaper
Online trading gives every investor equal opportunity. The other trader also has the same resources as you, and you need to be fast in executing trades. Speed matters in institutions like the forex market, and a second means a lot in a market trend. Luckily, you can keep up with speed provided you have a stable internet connection with online trading. This trading method is also cheap since you won’t need to command brokers to execute trades on your behalf, which you will need to pay for. Online trading has changed the scope of trading, and it allows investors to get in the game without involving brokers who, at times, are expensive to hire. If you are still using brokers, you should try trading yourself online, and you will find it more convenient.
