Online Share Trading

Online share trading has revolutionized how shares are being bought and sold. Back in the day (which is not that long ago) the only way to buy and sell shares was through a broker. This broker would “manually” execute your trade and apart from being slow it was damn expensive.

Today, online share trading happens in seconds and instead of having a broker, you have the internet. Traditional over the phone brokers have been replaced with online brokers where you can buy and sell shares at will. Not only did this open the doors to anyone, but it slashed the costs of trades significantly. Today, most online brokers only charge a nominal fee and for 5 bucks you can execute any trade.

Online share trading opened the doors to us “small guys” who can now sit in the comfort of our own homes and trade on the major exchanges like the NYSE and the NASAQ. It’s almost like the playing field has leveled out and we all have an equal chance.

Unfortunately having the ability to instantly buy and sell shares online does not make it easier to actually pick stocks and profit from them. There is still a huge learning curve involved and making money from the stock market can be a steep learning curve.

Here are 3 golden rules that you need to stick to at all times:

1. Never Trade On Emotion
Share trading is as much a mental game as it is a skills game. More than anything you need to learn the right mindset. Learning to distance yourself from your emotions is crucial in having success on the stock market. Never trade on emotion. You will make bad decisions. Instead, learn to trust the facts and the figures and trade on that data.

2. Set Your Rules And Stick To Them
When you are trading online you definitely don’t want to “go wit the flow” and see what happens. You need to set yourself very strict entry and exit points on every trade you make and then STICK to them at all costs. This is vitally important in locking in profits and minimizing losses.

3. Protect The Principal
Never trade more than 50% of your trading capital on a single trade. The challenge is when that “juicy” opportunity comes along and it’s a trade that “cannot lose” we tend to get over excited. This is a recipe for failure. Always keep your emotions in check and never bank on one stock to make you rich.

Online share trading is about learning how money flows and then riding the wave. It’s as much a game of learning the mindset and the psychology as it is about learning how to read trends and evaluating a stock. The most important thing is to keep learning and to keep refining your skills as a trader.