Dangers of online stock trading

Dangers of online stock trading

Author: Webmark Date of post: 24.05.2017

Online Trading Academy has its roots in the largest trading floor in the Western US, founded in by Eyal Shahar.

Day-Trading Dangers -- The Motley Fool

Independent traders needed training to be successful in their investments, and soon a teaching model was born. Enriching lives worldwide through exceptional financial education. I understand that this course is not preparation to be a Licensed Broker in the financial industry and will not help me get a job. Online Trading Academy Training Program should not be construed as a recommendation or an offer to buy or sell any security or the suitability of any investment strategy for Student.

Neither Online Trading Academy nor its representatives are licensed to make such advisements. Online Trading Academy training centers are independently owned and operated and each location may set its own fees for classes. As used on this Website and in our communications, the word "professional" or "Professional" is used as an adjective to describe the exceptional quality of our education and the high standards we require of our instructors and personnel in all our Centers.

None of our courses will provide education to become a Licensed Broker in the financial industry, or licensing in any other profession, and no course of instruction will lead to any job, employment or professional certification. As used on this Website and in our communications, the word "Graduate" or "graduate" means any person who has experienced our Core Strategy Courses previously called Professional Trader Part 1 and Part 2 and any person who has experienced any other combination of classes which total at least seven full days of our trading and investing education.

At Online Trading Academy, we understand the risks involved in short term trading and emphasize risk management in our classes. Enroll in one of our free seminars to find out more! Electronic active trading involves special risks and may not be suitable for everyone. Electronic active trading may also involve a high volume of trading activity.

Each trade generates a commission and the total daily commission on such a high volume of trading can be considerable. Electronic active trading accounts should be considered speculative in nature with the objective being to generate short-term profits.

MB Trading

An electronic active trader should understand the operation of a margin account under various market conditions and review his or her investment objectives, financial resources and risk tolerances to determine whether margin trading is appropriate for them.

Chairman Arthur Levitt today issued the following statement to investors: The Internet and other new technologies are in many ways transforming how our capital markets operate. There are clear benefits to these changes including lower costs and faster access to the market for investors. I believe that investors need to remember the investment basics, and not allow the ease and speed with which they can trade to lull them either into a false sense of security or encourage them to trade too quickly or too often.

Over the last two years, particularly in recent months, the SEC has been hearing concerns about retail, on-line Internet investing. In fact, the number of complaints concerning on-line investing has increased percent in the last year. Some of the issues raised specifically relate to on-line trading, others are generic to all investing.

The majority of them can be addressed through better education and investors ensuring that they have done their homework. Every day, more and more Americans are investing in the stock market, and many of them are doing so through the Internet.

On-line brokerage accounts account for approximately 25 percent of all retail stock trades. And, the number of on-line brokerage accounts is expected to exceed 10 million by the end of the year. While the manner in which orders are executed may be changing, the time-honored principles of evaluating a stock have not. Investing in the stock market-however you do it and however easy it may be-will always entail risk. I would be very concerned if investors allow the ease with which they can make trades to shortcut or bypass the three golden rules for all investors: On-line investors should remember that it is just as easy, if not more, to lose money through the click of a button as it is to make it.

In recent months, we have begun to identify a number of issues every on-line investor should be aware of. First, investors must understand the issues and limitations of on-line investing.

You may occasionally experience delays on these new systems. Demand has grown so quickly that many firms are racing to keep pace with it. In the meantime, you may have trouble getting on-line or receiving timely confirmations of trade executions. You should not always expect "instantaneous" execution and reporting.

There can and will be delays in electronic systems. You should investigate and understand options and alternatives to executing and confirming your orders if you encounter on-line problems.

Second, investors may sometimes be surprised at how quickly stock prices actually move. For example, many technology stocks have recently had dramatic and rapid price movements.

When many investors attempt to purchase or sell the same stock at the same time, the price can move very quickly. Just because you see a price on your computer screen doesn't mean that you will always be able to get that price in a rapidly changing market. You should take precautions to ensure that you do not end up paying much more for a stock than you intended or can afford.

One way to do this is to use limit orders rather than market orders when submitting a trade in a "hot" stock. The result for investors that do not limit their risk can be quite surprising.

Investors should understand the risk associated with trading in a rapidly moving market and make sure that they take all possible actions to control their risk. Third, I am concerned that investors buying securities on margin may not fully understand the risks involved. In volatile markets, investors who have put up an initial margin payment for a stock may find themselves being required to provide additional cash maintenance margin if the price of the stock subsequently falls.

If the funds are not paid in a timely manner, the brokerage firm has the right to sell the securities and charge any loss to the investor. When you buy stock on margin, you are borrowing money. And as the stock price changes, you may be required to increase the cash investment. Simply put, you should make sure that you do not over-extend.

Scams in Trading Penny Stocks

Fourth, while new technology available to retail investors may resemble that of professional traders, retail investors should exercise caution before imitating the style of trading and risks undertaken by market professionals. For most individuals, the stock market should be used for investment not trading.

dangers of online stock trading

Strategies such as day trading can be highly risky, and retail investors engaging in such activities should do so with funds they can afford to lose.

I am very concerned when I hear of stories of student loan money, second mortgages or retirement funds being used to engage in this type of activity. Investment should be for the long-run, not for minutes or hours.

dangers of online stock trading

Millions of new investors have taken advantage of the unprecedented access and individual control the Internet provides. But, new opportunities present all of us with new responsibilities, challenges and risks. The SEC will do everything it can to protect and inform investors during this time of great innovation and change.

But, investor protection-at its most basic and effective level-starts with the investor. I say to all investors-whether you invest on-line, on the phone, or in-person-know what you are buying, what the ground rules are, and what level of risk you are assuming.

Trading foreign exchange is not for everyone. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors.

The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.

The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Your browser Internet Explorer 8 or below is outdated and no longer supported. Please upgrade your browser to improve your experience. Celebrating 20 Years Transforming Lives for Two Decades Online Trading Academy has its roots in the largest trading floor in the Western US, founded in by Eyal Shahar. Learn Programs Core Strategy Extended Learning Track Mastermind Community Specialty Courses Assets Stocks Forex Futures Options. Lessons from the Pros Calculators Financial Education Center Power Trading Radio Free Online Trading Courses.

Our Company Instructors Reviews News Join Our Team. A Note About Terminology Used on our Website As used on this Website and in our communications, the word "professional" or "Professional" is used as an adjective to describe the exceptional quality of our education and the high standards we require of our instructors and personnel in all our Centers.

We Help You Minimize Trading Risk At Online Trading Academy, we understand the risks involved in short term trading and emphasize risk management in our classes.

Understanding Trading Risks Electronic active trading involves special risks and may not be suitable for everyone. Important Information about trading Foreign Exchange. Subscribe to our award-winning newsletter Over , Lessons from the Pros readers.

Check out last week's issue. Network My OTA OTA Real Estate OTA Tax Pros.

Error Page

Company Careers Franchising Reviews Staff. Legal Privacy Policy Risk Disclosure. Support Contact Us Site Map.

Rating 4,2 stars - 523 reviews
inserted by FC2 system