Introduction to Online Trading
article by TradeTrek.com

The Internet revolution has been changing the fundamentals of our society. It shapes the way we communicate and the way we do business. It brings us closer and closer to vital sources of information. It provides us with means to directly interact with service-oriented computer systems tailored to our specific needs; therefore, we can serve ourselves better by making our own decisions. This prevailing shift of the business paradigm is reshaping the financial industry and transforming the way people invest.

In the following discussion, we will briefly explain how the Internet has been changing the way people trade stocks, and we will introduce some of the pros and cons of using online brokerage companies. Then we will look at some of the trading styles people practice and introduce an important trading technique that a lot of professional traders have been using with great success. Finally, you will learn how Tradetrek.com can help you apply these trading techniques online with trading tools that make online trading easy, fun, profitable, and understandable!

In the old days, because of the limitations of communications technology, Wall Street was the center for most of the Stock Exchange and Brokerage firms. Today, at this millennial transition, investors can use revolutionary Internet Client-Server technology to trade stocks nearly anywhere, anytime, independent of brokers' fees and service limitations.

This new access by the trading public to low-cost transactions and cutting-edge, real-time market information that formerly belonged only to brokers has opened up extraordinary new investment opportunities as well as a crucial need for state-of-the-art information. It is exactly these new-market investment services that Tradetrek.com specializes in satisfying.

Jumping In

Learning to use the new online trading tools provided by brokerage houses may take very little time. In only a couple of mouse clicks, you can make thousand-dollar transactions in a matter of seconds. Modern technology in hand, you have total control over the money you are investing, which really gives you the tools and confidence to beat the S&P Index!

There are a number of brokerage.coms out there, such as Ameritrade, DLJdirect, SureTrade, Datek, Charles Schwab, E-Trade, just to name a few. As a result of a price war between these companies, the commissions that these companies charge per trade have dropped significantly. For example, Datek charges $9.99 per trade, Ameritrade $8, and SureTrade only $7.95. But you need to keep in mind that price is not the only factor in choosing a service. You also have to consider how frequently you trade, what other services you might be interested in, how reliable the trading system is, whether it is hard to log on when the market is active, and quite a few other variables.

In order to attract more users, many online brokers continually upgrade their systems to allow more log-ons simultaneously; they may also offer new value-added services such as company news releases, earning reports, and market commentary.

The Market Moment of Truth

Okay, then. Imagine that now you know exactly what to do: Buy a computer. Sign up with AOL. Find an online broker. Deposit an initial sum of money. Now you're in! And at the brink of your first trading moment, your hands sweating, heart racing, you hear yourself asking, "Am I really ready?"

The Need to Know

Wait, then: you might not be quite ready. Not yet! Estimates show that more than 80% of all online investors lose money at the outset. While you know that a great number of portfolio holders have realized great profit--for some of them, even fortunes--you realize that to be a winner you first need to exercise prudent judgment to join that 20% who really are successful. Perhaps you haven't yet realized quite what you are facing now that you've gotten rid of the commission-swallowing middlemen (Wall Street brokers and expensive financial advisers). You are on your own. And sorting through hundreds of websites for stock tips, market updates, and company profiles, who wouldn't feel overwhelmed! Perhaps in this vast universe of digital feed, you realize more sharply than ever that you lack clear strategies for evaluating market possibilities of the thousands of stocks out there. You constantly hear stories of stocks that break the trading range, reach an all-time high, and then, before you have time to act, slide 30 points in two days. By the time you get the news you are too late to capitalize!

Information Tools Make All the Difference!

While you sense the promise and enjoy the excitement of modern technology, like so many others, you probably feel overwhelmed, frustrated, even lost at the prospect of putting your savings online, on the line. Certainly none of the skills crucial to sizing up the market are intuitive; therefore, in order to see what is really going on, and to become a successful investor, you are going to have to learn about the market's state-of-the-art trading techniques and strategies.

Investing Styles

Different people trade in different styles. There are long-term investors who buy stocks and hold for a year or two. Mid-term investors may buy and hold stocks from thirty days to six months. Short-term traders trade frequently, on a weekly basis. And finally, day traders buy and sell every day. Now, assuming you make good decisions, the more frequently you trade, the more profit you gain. But what style is right for you? Which stocks should you choose and how long should you hold them? Some investors like companies with strongest earnings. Those who like to invest in big blue-chip companies are not willing to bet on startups. Other players examine company financial statements and balance sheets, picking only those with low debt ratio, high cash flow, and high profit margin.

More sophisticated players (this brings us closer to Tradetrek.com!) behave differently. They scrutinize stock charts, looking for hidden trading signals that may reveal a major opportunity. They understand a cardinal element in how to make money in the stock market: Buy the right stock at the right time! Of course, this is more easily said than done. Capturing the right moment to buy and sell requires certain techniques called technical analysis (TA). To put it simply, TA is a set of techniques analysts use to spot revealing stock patterns in advance. The principles underlying technical analysis have proven successful in dealing with all financial markets. Applying these techniques in online trading, then, is essential to discovering a winning investment position, whether you are a long-term, mid-term, or short-term trader.

Technical Analysis is so important that almost no investor can trade successfully without it. Fortunately, Tradetrek.com has now come up with an innovative paradigm to put real-time technical analysis tools online. Scientists at Tradetrek are now applying newly developed artificial intelligence, neural network, and pattern-recognition technologies to real-time technical analysis among hundreds of stocks. By taking advantage of Tradetrek's IntelliChart, you won't have to spend hours upon hours going through thousands stocks in hopes of finding a sound and promising performance pattern. IntelliChart conducts real-time searches for more than a dozen technical analysis patterns and presents you with the most profitable stocks among thousands of stocks being traded. Under each chart, a detailed explanation generated automatically by Artificial Intelligence helps advise you on what course of trading action to take.

Article by TradeTrek.com, creator of some of the most innovative real-time technical analysis tools available anywhere. Find out how you can receive real-time quotes and charts, live stock picks, neural network artificial intelligence stock forecasts, personalized portfolios and just about everything else you could need for your trading or investing needs by visiting TradeTrek.com today!