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Online Stock Trading

Once upon a time: Buy shares via bank advisors! Shares are securities and are traded on the various stock exchanges. Very famous is the stock exchange in Frankfurt, as well as the stock exchange on Wall Street. If you wanted to buy shares 20 years ago, you went to the bank. There one told its bank adviser, which share and much piece one would like to buy.

Or the bank advisor made suggestions himself. After that, a maximum purchase price was agreed upon, and the bank official bought the shares. This procedure was not only time-consuming, but also very expensive. In any case, 40 euros had to be paid for each purchase. In addition, one had little influence if the share had fallen or risen in the meantime – i.e. between the decision to buy and the trip to the bank. The system was sluggish and not very elastic.

Since 2000: Online platforms to buy a share

Since the Internet age, however, many online platforms have specialized in online stock trading. Many banks also offer such services. The advantage of online trading lies in the close-to-second trading and the lower price.

Low bank charges when buying a share

The bank charges when buying online are only a fraction of what the bank charges when carried out by a bank employee. It is therefore easier to make a profit.

Timely trading

By quickly buying and selling the stock is sometimes a hold only for a few seconds also possible. The information is immediately on the stock market. Although this tactic of trading is more likely to derivatives, which have a high leverage, but stock trading is also possible in seconds settlement. Depending upon expenses, profits result also in such a way.

Set stops, yes or no?

The stop setting is a question of philosophy. Some traders do without the stops, and rather sit out the losses in value. Others set consistent stops and do not let a loss become too large. With the stop setting it can come straight shortly after the purchase to a Ausstoppen of the share, and one remains often on the expenses. It is not said that overnight the share keeps the same value.

It is possible that in the evening, when the Frankfurt Stock Exchange has already closed, but trading is still going on on Wall Street, the share price is massively dragged down. If no precautionary measures have been taken, the share is stopped out, even though nothing can be seen of it early the next morning. What happened there? It is always decisive on which trading place the share is traded and how long this trading place is open. So if you set your stops, you should look into it and keep an eye on these facts.

Entering a limit when buying shares

In order to buy a share more cheaply, it is recommended to enter a limit. Usually, the limit is then picked up at some point, even if it is not much below the current market price. If one enters only the market price, i.e. a purchase without “conditions”, it can already happen that the share was suddenly bought above the market price.

Do not buy shares at any time

Shares are once cheaper and then again more expensive. It is a price wave movement that every stock goes through. The wave movements are present during the day, as well as weekly and monthly. The question of a favorable entrance is to be examined thus. It is usually bad to enter only on a whim, when your grandmother has just entrusted you with her money from her pillow. It is much better to observe the stock market for a while. If various indicators, such as Slow Stochastic or RSI signal a favorable time, then strike first. Of course, you are never immune to bad investments, but the right entry does not let the emotions immediately rush into the basement, if it then goes downhill again a bit. As a rule, it is always the case that the wave movement also swings back in the opposite direction.

Panic in stock trading

The worst trades are made when there is panic.
Shares relatively safe in contrast to derivatives
In contrast to derivatives, shares are real company shares.
If the stock market collapses, the shares still represent a company share – at least that’s what the experts say. With derivatives, all may be lost.

Which fees on which stock exchanges?

Different exchanges charge different fees. This is also the case in online trading.
Often there are cooperations between the trading platform and individual exchanges.
So the fees can be very different from provider to provider.
A comparison is worthwhile to find out the right provider.

Percentage fees or flat rate?

Fees can be charged as a lump sum for a trade (purchase or sale), or as a percentage of the purchase price, or both. Foreign exchanges are usually more expensive than domestic ones. Different platforms offer different trading venues.

Trading shares for free

Sometimes there are promotions of online platforms and trading costs nothing. It mainly involves derivatives and you have to invest a certain minimum amount, such as 1,000.- euros. Stocks are less likely to be traded for free. But it is worth looking out for it, because with free trading you are in profit faster and thus have less risk.

Online trading with shares – the tools & practice account

buy sharesEvery system is a little different. You should definitely familiarize yourself with online trading on a platform before it starts for real. It goes so fast that the layman does not even keep up, and already the money is gone. Often there are therefore practice opportunities. A practice account promises a more professional approach to the circumstances. After all, if you’re nervous about real trading because you don’t know the tools, and you don’t know where to click now so you can sell again, you’re more of a roulette player than a trader. Knowing the tools and mechanisms is inevitable!

Money should not be used immediately

Another tip concerns the invested money: if you need the money again tomorrow to pay the leasing rate, you will be on pins and needles during the trade and will not have a quiet minute. Any small upheaval will cause this person to panic, and at the end of the day, the trade will end in a loss, with a much higher probability, because patience and nerves are simply missing.

Online trading tempts to invest the money quickly and withdraw it just as quickly. But if there is only one day, and the next day all the money is needed, there is no room for maneuver. This also makes itself felt in the psyche and tempts to make rash decisions.

Conclusion: good opportunities when you buy a share

Overall, it should be noted that online trading offers really good opportunities and the banks can no longer charge such high fees. A lightning fast buying and selling can lead to profits just as much as holding the stock for a long time. Online trading is indispensable nowadays. The sooner you become familiar with this tool, the more you will understand the global financial markets, the world economy and the current financial crisis.

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Risk Warning

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trading with financial products (CFDs, Forex, Stocks, Cryptocurrencies, etc.) in general and with leveraged products especially is highly speculative and not suitable for all investors! The loss of your entire investment is possible. Never invest money you can`t risk losing! Decentralized and not regulated cryptocurrency markets are also a high risk and may lead to a significant loss.

Disclaimer

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