Friday, December 13, 2013

Three Tips and Benefits For You - Online Trading

Use these cheap online trading tips and you'll stretch your trading a lot further. Trading costs are like termites; they slowly eat up your account without you even knowing. Get the benefits I discuss at the bottom by using these simple tips.

The Three Tips

1. Trading Commissions - A lot of brokers compete on price and in trading that means lower trading commissions. Online transactions can be as low as $0 to about $15 for larger orders. The commission range depends on the broker, number of shares, and type of order. If you are paying even $10 a trade I would look for another broker.

2. Free Trades - Look out for offers of free trades. Many times you will only trade a few times a month as trading is our second profession. Usually the broker will want a minimum account balance but you could be trading every month for free.

3. Get Some Leverage - Big leverage is scary but a little leverage is ok. The two easiest ways to get leverage is:

Margin Accounts - This can be a great way to increase your trade size without having to ante up more Cash.     Just check that the broker has a reasonable interest rate on margin balances.

Options - Options can be a great way as they say in the UK to "take a punt" and options commissions should be equally low as stocks. Warning! Do not trade options unless you know how they work.

A good online discount broker should offer both of these.

Three Benefits of Cheap Online Trading

If you use these three tips you'll get these three benefits.

1. Trade more often and take better advantage of your signals.

2. Trade larger size and reap larger gains on trades.

3. Put on more positions at once and not have to exit positions early for other signals.

So start cheap online trading by reviewing trading commissions, getting free trades, and using a little leverage.

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