What are the Pros and Cons of Online Trading

In this generation of technology, the most convenient medium of any transaction is definitely online or via the internet. The benefits are limitless. It has been widely used even in the field of trading. Because of it, a lot of people have tried trading and succeeded without the need of a personal broker. But of course, like any other mediums of the transaction, all the benefits you can get from online trading comes with a risk. Here are some of the advantages and disadvantages of online trading:

Trade12- Advantages of Online Trading

Advantages:

  • Convenience of access

    The most evident difference of online trading versus traditional trading is its convenience of access. In online trading, you can do transactions straight from your smartphones, laptops, tablets, or any other gadget that has an access to the internet and a browser. It also made rise to platforms that are specialized in making trades. With these, you can be updated with every transaction anywhere and anytime you like.

  • Lower fees

    Traditional trading involves personal meeting with a broker, or over making transactions over a telephone call. Of course, all of those have equivalent costs. Transportation fee, accommodation, telephone bill, and other necessities are just some of the expenses which you have to cover, not to mention the commission charges and other fees required by the broker. In online trading, however, since it only involves online transactions, most brokerage sites charge smaller fees for commissions or spreads. Thus, giving you an opportunity to save a lot especially if you are the type to trade frequently.

  • Speed and real time updates

    Another advantage of online trading is the speed of which you can transact since with just a few clicks, you can be able to make a trade. Another good thing about it is the capability for real time updates. There are a lot of brokerage sites that offer the viewing of the market trend in real time. You can also monitor your investments and all your transactions in real time through online trading.

  • Availability of online tools

    Most brokerage sites offer several online tools as a package with their accounts. These vary from trading platforms, online courses, performance assessment tools, market trend viewer, and other tools that can help traders make better decisions. All within reach by making a few clicks.

Trade12- Disadvantages of Online Trading

Disadvantages:

  • Tendency to splurge invest

    Having access to all these great technologies and being able to make transactions with very few processes needed can result to a tendency to splurge invest. A lot of people tend to be carried away by seeing how much money they can make (or lose) without having to make too much effort that they end up forgetting their set limits. This results to addictive trading where they don’t stop investing while they still can since it is very easy for them to do even at the comforts of their homes.

  • Internet connection dependent

    Online trading means it has to be over the internet. Thus, all your trades and transactions depend on your internet connection. No matter how reliable your ISP is, there will surely be a time that you will experience fluctuations or loss of connection. Even just the smallest problem with your internet connection can make a huge difference because every split second counts in trading.

  • Prone to mechanical errors

    Since you are using gadgets to have access to your trading accounts, any problem with these gadgets can also cause a lot of discrepancies on your transactions. You also have no control on system failures from your brokers so make sure to take note of the usual down times of their system and avoid trading during those times.

  • Lack of professional guidance

    Since you are using gadgets to have access to your trading accounts, any problem with these gadgets can also cause a lot of discrepancies on your transactions. You also have no control on system failures from your brokers so make sure to take note of the usual down times of their system and avoid trading during those times.

Trade12 Website

Read more about the things you need know about an online broker.

No matter which medium you choose in trading, it always comes with advantages as well as disadvantages. Just make sure that you have enough preparation for both. If you ever want to try online trading, it could help a lot if you choose only the best. Trade12 is a reputable online trading brokerage site with years of professional experience in the field of trading. A lot of clients have already attested to the trustworthiness of the site through online trading reviews and feedback. Open an account now and be one of those who took a step towards success with Trade12!


6 thoughts on “What are the Pros and Cons of Online Trading

  1. despite the disadvantages mentioned here, im still intrested in opening an online trading account. Can you help me with that?

    1. Hi Chelsea!
      It depends on your preference. If you are a beginner in trading and you think you still need full guidance, then a traditional full-time broker is for you.
      If you have some knowledge on trading or you want the convenience of trading at your fingertips, then an online discount broker is for you.
      Hope that helps!

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