4 Things You Didn’t Know About Online Investing

At this juncture in the 21st century, people from all walks of life are using the Internet to deal with a wide range of different types of personal and business matters. A growing number of people are utilizing the Internet for the purposes of online investing. Four significant advantages are realized through online investing.
Savings on Investment Fees and Costs

One of the things many people did not realize is that online investing permits a person to save a good deal of money on transaction fees and costs. Indeed, the savings is larger than what is even available through discount brokers in the brick and mortar world.

Highly Personalized Investing

Another of the benefits that can be realized through online investing is that an account can be highly personalized. Even though real world investment firms, including discount brokers, frequently advertise that they provide highly personalized service, this customization simply cannot compare to what an investor is able to do through an online account and brokerage.

Quick, Reliable Information Resources

One of the keys to successful investing, to making money through the investment process, is having ready access to reliable information and data. This represents another of the primary advantages a person realizes through online investing. The typical online investment options provides a person with a plethora of resources through which a wealth of vital information and data can be accessed with ease.

As an aside, online investing options today provide their clients or customers with useful apps. Through these apps, a person is able to obtain alerts which necessary information becomes available about the market or a specific investment — alerts that allow a person being better informed and educated when it comes to investment decisions.

Convenient and Well Controlled Investing

Finally, on of the four most significant advantages of online investing is found in its convenience and its ability to provide a person a great deal of control over the investment process. Through online investing, a person can initiate buy-sell transactions from the comfort of his or her own home — or anywhere, thanks to mobile devices. Moreover, an investor can maintain direct and effective control over his or her entire investment portfolio.

 

The Basics of Forex Trading

The rise of technology in the last two decades has led to an explosion of investing choices for “regular” folks. Almost anyone can open a brokerage account online and begin investing. But investing opportunities go beyond just stocks and bonds through online discount brokers. It’s also possible to gain exposure to the forex market and get involved with currency trading.

Before you begin forex trading, though, it helps to understand the basics. As with any investing decision, you need to know what you are getting into before you start. You’ll have better results.

What is Forex Trading?

First of all, it’s important to understand that, in most cases, you won’t actually trade currencies when you get involved with the forex market. Most of the time, you are making a “bet” that one currency will rise or fall in relation to another. So, rather than actually trading in your U.S. dollars for euros, you instead bet on the relative value of the dollar as compared to the euro.

You make your bet through dealers, who, rather than charging commissions, make money on the “spread”, which is the difference between the bidding price and the asking price on a currency. The nice thing about forex trading is that whenever you close a trade, you have already paid the spread; it’s built in.

Trading is always done in terms of pairs. If you trade the euro/dollar pair (EUR/USD), the quote you receive is given in terms of the first currency listed. So, if EUR/USD is at 1.3693 that means that the euro is worth more than the dollar. If you think that the euro will go higher, you “buy” the currency pair. If you are right, and EUR/USD does gain, you receive a profit. The profit is based on the difference between when you entered the trade and when you exited the trade, as well as how much money you risked.

Likewise, you can make money when a currency pair goes lower. If you decide to short EUR/USD, betting that the euro will lose value relative to the dollar, and you are right, your profit is based on how much money you risk and how much lower EUR/USD is when you exit the position. Remember that each currency pair is treated differently. EUR/USD might be higher, meaning that the dollar is losing ground to the euro, but at the same time the dollar might be gaining ground against the pound. So, it’s possible to simultaneously bet that the dollar will gain and lose, and win, depending on which currencies the dollar is paired with.

Getting Started

In many cases, you have to trade in “lots” of 100,000 units. This can get expensive, and many forex dealers require you to have at least $10,000 to get started. However, there are some dealers that offer “mini” accounts. The lots are smaller — usually 10,000 units — and you can usually start with $2,500.

It makes sense to practice first, though. Most dealers offer demo accounts that let you learn the platform and get used to how forex trading works. You can try out strategies, and get to know the process before risking your own money. It’s a good idea to use a demo account before you actually get started. Most forex trading involves leverage, which means that your losses are magnified as well as your gains, so you need to make sure you can handle the risk.