Through online trading, you can easily buy or sell thousands of stocks. Orders are routed through the brokers online system to the particular stock exchange and executed within a few seconds, usually without any manual intervention.

Online investing is different from day trading. In day trading, an individual buys and sells shares in a very short period of time, within the same day in most of the cases, in order to gain from marginal movement in the securities.

Risks of Online Trading

If you are a new investor, you should be aware of the principles of investing, your investment goals and risk tolerance before entering into online trading. Being an online trader you may tempt you to trade very frequently or to be involved in over trading, which would result in increase in trading costs, complication in your tax related conditions and large losses.

Despite some limitations, online trading has improved the way stocks and other investment instruments, such as, bonds, mutual funds and currencies, are being traded, substantially, in the fast moving capital markets. So, should you should be a trader or an investor?

Being a Trader

Normally, short-term traders including day traders, who are also called market timers, do not gain profits from their investments consistently, since their investments are not based on the companies