Internet trading for beginners and experienced investors
Internet trading for beginners and experienced investors - tips and tricks for investing on the Internet. What is online trading, how to choose a broker.
Internet trading provides potential investors with an order of magnitude more opportunities and benefits than traditional investing through a broker or mutual funds. And it's not just a matter of feeling your own omnipotence at the touch of a button, seeing the market in real time and being able to make dozens of deals a day - instead of turtle speed and phone calls to the broker. A tangible positive is the relatively low commissions and absolute transparency of revenues. After all, the user is responsible for each operation. Therefore, no rumors that the management company underestimated the profitability of the mutual fund when returning the unit are not terrible. And the time of fierce competition gives beginners in investing a lot of opportunities that are a sin not to take advantage of.
Without the first step - do not rush to choose the company of an online broker
Experts recommend starting your investment online not by choosing an online broker, but with the deepest possible acquaintance with the system. The benefits of opportunities in the formation of online trading are such that it is possible to learn all the basic and deeper wisdom, without making a final choice in favor of a particular company, and even without conducting transactions and without losing money.
The first step is to go to seminars
One of the easiest ways to learn more about online trading is to attend seminars held regularly by brokerage firms.
Special training seminars are organized by almost every company that provides online trading services. At the same time, some companies approach training thoroughly and hold seminars of different levels: both for beginners and for those who are already oriented in trade, have their own experience, but are not very happy with their results. Seminars for beginners are usually free and not very meaningful - they give information "in general". Even after attending three different entry-level seminars, it is impossible to start navigating the stock market freely.
In addition to free basic and paid seminars. Variations here are different - from regular classes once a month - to a four-day trip.
In order to go to seminars, it is not necessary to be tied to one company, however, for "their" organizers make discounts. In most cases, by attending seminars of various organizers, you can understand what an online broker is and what to expect from him.
The second step is to try our hand
A nice advantage for those who are beginning to learn the wisdom of online trading is the opportunity to use virtual training trades to help explore the terminal and see how successful personal investing can be. To do this, simply contact one of the companies of online brokers that provide training auctions. Closing of the trading day for students on virtual money does not take place together with the real exchange, but at 22:15, however, real exchange orders are available only until 17-00 (and on Fridays and holidays until 16-00). Of course, the most pleasant thing is that the training auction is absolutely free. In addition, most online brokers that provide access to training trades can advise you for free and help you understand everything. The main thing here is not to be ashamed to ask.
Sometimes the possibilities of virtual bidding are very diverse. For example, some companies even write off the broker's commission and the stock exchange commission for each transaction from the virtual account for the maximum compliance of the real training auction. Others organize rankings between the portfolios of training bidders. The only thing you need to decide who wants to trade virtually - is with which of the two relevant programs on the market is the desire to study. The more common trading platform is Quik or the less common Smart. After all, if you have the time and desire, you can even try both of these programs to choose the most convenient one.
The third step is to look at analytics
Each bidding company provides its customers with analytics. This can be both free access to the news feed of a well-known agency, and a selection of significant, according to experts, events that can affect the stock market. For an additional fee, you can order a more detailed and in-depth analysis of any company. It makes sense to pay attention to the cost of analytics. As for its quality, the rule is the same: in the analysis of information it is better to rely on yourself. And the information itself is almost the same everywhere. In addition, the concept of "best analytics" is very relative. As if the representative of the online broker did not beat himself in the chest and did not say that the analyst of his company - the best - remember: no analyst in any company predicted a fall in 2008 and the financial crisis on the stock exchange.
The fourth step is to study tariffs
Despite the fact that almost all online brokers have the same cost of online trading, the cost of customer service can vary significantly. So it makes sense to get acquainted in detail with the tariffs and commissions, as well as the terms of the service agreement (more on this below).
The last step - do not be tempted
Although the income you can get from online trading can be compared to the income of the business - ie 50-60% per annum, remember that to play on the stock exchange requires not only money but also time and talent. The market is still too underdeveloped to count on the integrity of its work. Moreover, the stock market is an unpredictable phenomenon. Just as no one could have predicted his downfall, so no one can predict the moment of his rise. Here's what will happen tomorrow, no one will give you accurate information. However, in order to be a successful trader, you may not know how much the stock will cost tomorrow. The main thing, as investment meters say, is to “limit your losses, let your profits flow and not take too many risks.
Internet trading: choosing a broker for successful trading
We would advise you to start looking for your broker among the many companies on the market not by comparing tariffs, but by studying the services provided by the organization.
First of all, find out if it is possible to connect remotely to the online brokerage service, or to visit the office.
It is also worth clarifying which exchanges the company works with. If you want to trade not only company stocks but also futures, find out if the company has access to futures trading.
After that, you should find out whether the broker has requirements for the minimum amount to open an account, or it is determined at your discretion. Another important aspect is how the funds are credited and withdrawn from the account. And if the enrollment is more or less clear (usually you just deposit money through the bank to the broker's account), then you need to clarify some details about the withdrawal. For example, how long this procedure takes. Some companies charge a fee for each such transaction. Ideally, it is desirable to communicate with any of the company's customers who have already withdrawn funds from the account. But if this is not possible - ask the company about all the details.
Also find out what software the broker offers. Internet traders are most often offered SmartTrade or Quik programs. The second is much more common. So in this sense, it is better to immediately learn to work with Quik, because it is possible that in the future you will want to change the broker. However, there can be no unambiguous recommendations - each trader chooses the most convenient tools.
In addition to the basic points, a beginner trader will benefit from a number of additional services.
Find out what information the broker provides to its clients. As a novice trader, you will need industry and macroeconomic statistics with relevant comments from company experts, information and comments on changes in legislation, company news, information on issuers' reporting and changes in their management, analysis of trading dynamics on global stock exchanges, key financial news.
All this information can be provided to you free of charge or for a fee, which is also desirable to immediately clarify with the broker.
Consultations of experts
Even the most complete market information will not be enough if you do not yet have significant experience in stock trading. In this case, you may need to consult an experienced professional. Ask if the broker provides expert advice, ie whether you can call the broker and consult if you have difficulty making a trading decision. This service can be paid or free. Also, find out if you can seek advice as often as you need to, and how much help you can count on.
Even if your broker provides excellent free advice on your first request, to make money you need to learn how to trade yourself. It is faster and easier to do this not on your own mistakes, but on special courses and trainings. Brokers often hold seminars for private investors. Find out what training programs are available in the company of your choice - paid courses, free seminars, training video tutorials, webinars and so on.
If you have time - it will not be superfluous to go to free classes from several brokers to "look closely" and talk to experts. It will also help you get an idea of the company.
We study tariffs
The main costs of paying for the services of a broker consist of a commission on turnover. Of the total amount of Depending on its tariff policy, the broker receives 0.05% -0.15%. Most often, the commission decreases when you increase the amount of transactions or when you increase the amount in your account. In addition to the commission, which is set as a percentage of turnover, the broker may set a fixed fee - monthly or for each trading session when you have traded in securities. In addition, a minimum commission amount may be entered.
The tariff of broker services on the futures market differs. It sets a fixed fee for each transaction, a scalper transaction (buying and selling during one trading session) or arranging a futures contract, as well as for forcibly closing a position.
In addition, you may incur additional costs, including payment for custody services. Some brokers immediately include it in the subscription fee, while others pay for the custodian's services separately. There may also be an exchange fee, a fee for blocking / unlocking funds for trading on the exchange, for using a trading terminal, for processing documents to connect to the system, and so on. As mentioned above, crediting / withdrawing transactions and related services may be charged. Also, be prepared for the fact that you will need to pay for an electronic digital signature key, which must be used for online transactions.