Online trading: advantages and disadvantages

What are the main advantages and disadvantages of using an online trading service for your investments? Let’s find out together

Online trading has been a rapidly growing phenomenon in recent years, with some trading apps such as eToro or Robinhood having forever changed the world of trading – remember the GameStop stock case where a group of enthusiasts got together on Reddit to manipulate the stock market? Well with the advent of such applications, trading has become something much more democratic than in the past where financial operations were relegated only to professionals in the sector. But this exposes less experienced users to important risks. Let’s try to clarify.

Online trading: the advantages …

Surely the first advantage is comfort and responsiveness. With online trading we can manage investments from the comfort of home, without having to go to the bank or contact an agent. This is not only convenient, but also allows us to act at the moment we deem most appropriate: timing is important when investing in the stock market. Even a few hours or minutes sometimes make a difference.

Another plus is associated with costs. In fact, online brokers have much more advantageous rates than banks. This is because the management costs are lower. However, even if the costs are lower, the assistance service is available 24 hours a day. Furthermore, online trading is generally subject to a lower tax.

We continue to list the advantages talking about theamount of investment. With an online broker it is generally possible to invest even a few tens or hundreds of euros, which is impossible or inconvenient if we turn to banks or professional brokers. Furthermore, you can make extensive use of tools such as CFDs or financial leverages to be able to earn even from small investments. Not to mention that the offer of operations and markets in which to operate is much wider.

… and the disadvantages

Of course, there are also many risks associated with it. Knowing how to invest in online trading correctly requires time and training. If you think you can make money simply by betting your money as if you were in a casino, you are wrong and you will lose a lot of money. Obviously luck can favor or disadvantage you, but careful planning of your investments is always the key to bringing something home. This is why even today it is not wrong to turn to banks and professionals, especially if we are inexperienced and have important figures available.

Secondly, don’t think that online trading is an activity to be done in the evening to relax instead of watching TV or reading a book. On the contrary trading can be a stressful activity, which takes a long time to bear fruit. Of course there are ways to invest and earn something in a few hours, taking advantage of market fluctuations. But to make a real profit it takes patience and coolness. If you do not possess these qualities, entrust yourself to a professional or a bank.

If, on the other hand, you are ready to invest time and effort in this activity, first of all start training yourself. Sites like www.tradingmania.it can help you in this regard. That’s all from the web and social section, keep following us!