Basics of Stock Trading Online

by : Abhishek Agarwal

You feel their presence every minute. When we speak about business or trading ,what comes to mind is the idea of people in costumes engaged in a telephone conversation. They work tirelessly from one end to another, often call to each other. You see all these figures and symbols on monitor screen They install data terminals. What you imagine is in fact the stock exchange.

A stock is fundamentally shares of a company. An exchange is where bonds, stocks and other securities are traded. That's where officers respond. The image that we have mentioned earlier, these are securities dealers.

So how does it really work?

Firstly, we must hire a broker. Then you ask your broker to purchase stocks that you think will make you a profit. The order is in turn given to the brokers floor clerk. The clerk now looks for another clerk willing to trade the shares you are interested in.

The news is sent back to your broker and then the broker gives you the news and you decide finally if the price is right. If so, then the case is settled. which gives you clues on the goings-on of the market .

But in todays world stocks can be traded over the internet. You may have heard about the NASDAQ engaged in stock trading over net. Now you needn't deal with people who are busy in the market place. When you trade over the net the computer replaces the need of both the broker as well as the floor clerk.

The systems over the net use a network system which helps connect a buyer and a seller. Now rather than call your broker,all you need to do is log into your network and place your bid electronically. The network helps you connect with the buyer or seller. At times using the net as a means to trade with takes things to a whole new league. It makes your whole transaction much faster.

Working online gets rid of the need to call a broker.

Many large corporations traders, like pension funds,and mutual funds and others, in fact the choice of the more traditional method of exchange floor.

So how does all this help you? As a free lancer you often get suggestions from the system that you use. Working online allows you to stay in direct connection with the stock exchange

Still if you completely new on the stock exchange scene it just might do you some good if you work through a brokerage firm. The firm would call you at critical times with tips on when to invest and when to sell. However, the final word is always yours.