Investing Online

Welcome to the website that will give you an unbiased introduction to investing online.

If you are an investor who is looking to join the millions of online traders, then there are at least five things that you should know upfront. The most important point is to start small. You shouldn't put your entire life-savings online!

The second point to be aware of is the commissions. If you are going to be actively trading, then the total costs will add up. Just be careful to monitor what your trading and investing costs are every month. Bear in mind that there are many types of brokers. The commissions they charge vary greatly, and depend on the quality and range of service that the offer. Also be aware that you might have to pay a capital gains tax on your trading profits. Some well known brokers line E*Trade and Schwab offer quality research reports and tool. But if you are not going to use those services, then you could look for a bare-bones type of service. You can check out the ratings and rankings of online brokerage firms from here. Open your online investing account only after you do your research.

Don't think that online investing and trading on the web are problem free. There are times when I was all too eager to enter the market to buy some stocks, and the internet service was down. Another time, I found that the server at the brokers office was down. Be ready with the broker's phone number so you can call them up if you want to execute a trade immediately.

Do not be misled by all the chatter on the web about hot stocks and tips. Remember that only the insiders know the real story about any company. Even top-notch analysts base their number crunching with the figures provided by the companies. So how can some unknown person offer you a 'tip" in some chat room? If you are an investor with a longer time frame, then check out as much information about the company as you can. Knowledge is money!

Whether you are an investor, or a trader (some don't like the word speculator), the web has made the stock markets accessible at the click of your mouse. At the same time, there are hoards of ruthless people out there who will mislead you into thinking that online investing is the road to easy riches. Be aware of investment frauds and scams.

Now let us turn to what could make you more successful as investors and traders. As an investor, you would look to diversify your holdings across different industries and companies. This will ensure that you don't get "caught" if a particular sector or company does badly in any period.

On the other hand, if you are looking to make trading profits, it is not necessary for you to trade dozens of stocks. Choose a stock that is widely traded and always has a narrow spread between buying and the selling rate. This spread is important because if you trade an illiquid stock, you might suddenly be faced with a situation where your stop-loss is done far away from where you really wanted to get out. I would recommend trading the SPY or the QQQQ. These two stocks are representative of a a large number of companies. The QQQQ represents the top 100 companies in the NASDAQ by one measure. Online investing in QQQQ is easy and you will soon become familiar with this market. To be honest, the QQQQ does not move as rapidly as the price of an individual company stock. But you have to balance between risk and reward.

Whether you are a day trader, or an investor having a longer time horizon, you should not ignore the value of technical analysis. Several hundreds of pages in the web profess to offer trading systems and newsletters. Be careful about what you buy and how much you pay for them. I would recommend that you start your adventure with a service which explains why a certain recommendation is being made. CraftyStox is one service where the costs are under your control, because it is FREE, and the charts are clearly laid out.

Just as an introduction to technical analysis, and to give you a good start to online investing, take a look at the some charts here.

To sum up, welcome to online investing! But be an informed participant in this business. Sure you can make online trading profits. But always bear in mind that there is also a risk of loss. So never expose yourself to more than what you can afford to lose. Do some reading about "pump and dump" artists. They spread a lot of good news about a stock, enticing investors to buy, and then dump whatever shares they hold themselves. It is better for you to know about the fundamental factors that affect the market in general, and the factors that influence the individual companies. Ideally, you should combine this knowledge with  technical factors. Technical analysis of stock markets are important even to the experienced trader. So you will be ignoring this only at a considerable cost. Good luck! Be sure to visit CraftyStox. But before that, you might want to check out some of the links below. See what they have to offer, and then come back to this page to read all of the above again. Then you will be better prepared.