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Opening Online Trading Account

With the availability of high speed internet technology life is becoming easier. Apart from placing order for groceries or paying bills stocks, forex currencies and bonds can also be purchased using internet. Online trading is a very simple process that saves traders from the clutches of brokers. Lack of basic knowledge of online trading is keeping many of the trading enthusiasts away from this simple trading process. Here is an overview of requirements for online trading and the benefits of online trading.

The Online Trading Process

Online trading is not just limited to trading of shares. Other activities like investing in post office shares, mutual funds, commodity trading and investment in insurance services can also be done.

Opening Online Trading Account

Opening an online trading account is the major requisite for online trading. Using the account, traders can purchase the desired shares and bonds. To open an online trading account with a particular provider follow the below given guidelines.

  • View their online trading demo to obtain an overview of the trading process.
  • Check the brokerage charges, accuracy of the trading tips provided, minimum requirements for opening an account like the minimum deposit, fees for using their trading software and the security measures the provider takes to safeguard the provided financial and personal details before signing in. 
  • Decide on the type of account to be opened - joint account, individual account, custodial account or a retirement account.
  • Always open an account with reputed trading service providers by giving all the requisite details like the email address, residence proof and employment details.

After giving all the details approval for the account will be given by the provider within a short period of time after completion of the verification process. Once the online trading account is approved traders can start trading.

Purchasing the Shares or Bonds

  • Choose the share to be purchased and find out the current price of the stock. The price of the stock can be obtained from the provider. Always get the real time price because a delayed quote of just twenty minutes can bring a lot of difference in the share price if the market moves rapidly.
  • Place an order for the stock. It is always recommended trading in the trading hours. Even if an order is placed after trading hours it gets processed only in the next trading session.

Pros

  • Simple process that can be handled very easily by every computer savvy.
  • Provides control of the trading process.
  • Allows to view the price of the stocks and decide whether to continue or not with a particular stock trading without calling the broker.
  • Change the trading plan depending on the available balance in the account and the existing market circumstances.
  • Trading can be done right from the comfort of the home.
  • Access to market research reports.

Cons

  • Poor knowledge of trading software can result in serious mistakes.

Inactivity fee has to be paid if the account is left unused for a long time.

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