If you are new to the forex trading world, we can understand the dilemma you are in. The dynamic market can be overwhelming. However, if you know the right tools and have the right guidance, you will be able to produce effective and efficient results.
If you have opted for online trading, you need to be aware of different factors. For instance, in online trading, you will be the online one making the decision. However, if you use a stockbroker, the broker will give advice and input in order to aid your decision-making process. If you opt for online trading, you can take advantage of different tools such as forex alerts, trading signals, online trading charts and much more.
Merits of Online Trading
Lower Fees: Online trading allows you to pay less when it comes to fees and transaction costs. In the traditional trading way, you might have to pay $5 to $10 in order to exchange-traded funds and sell stocks.
Offers More Flexibility: Since time is of an essence when it comes to effective forex trading. Therefore, online trading makes it possible for you to execute a trade almost immediately.
Eliminate Brokerage Bias: When you do online trading i.e. take trading into your hands, you have the ability to eliminate the brokerage bias. Bias happens when a broker tends to give an advice that profits him.
Demerits of Online Trading
Overinvesting: Since online trading is efficient and easy, therefore there is also the risk of over investing or making poor investment decisions.
Lack of personal relationship with brokers: Online traders tend to make all the decisions by themselves. May it be creating an investment strategy, understanding the effect of feedback market and much more.
Addictive nature: Studies have shown that online traders tend to experience a similar high that people who do gambling does. This means their decisions can be clouded and they might end up losing more than what they can afford.