In this era where trading seems to be a universal concept, we can’t help but wonder what’s in it that makes it very attractive. Trading seems to be the promiscuous woman who cuts you off just before you approach the beautiful lady in the bar. It’s alluring and many fall for its promise of high income. But like any other thing in the world, there are advantages and disadvantages of internet trading.
As you know, and I probably stressed this before, trading is surrounded with a very high-risk environment. Volatility is the name of the game. You should know how to swim on its tides to avoid drowning on it and losing your assets.
Despite the glitz and glam that trading has at first glance, it also shares some ugly truths. No one tells you this but the trading world is clouded with stories of failures and massive losses. What trading blogs would only tell you is that you have to trade or trading is all glamor. It might seem true at some point, but it’s important that we set realistic expectations.
How trading changed in the past years
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From the desks of the Forex offices to the virtual space of the internet, trading has gone a long way. It is becoming a profession and not just mere business for the majority of traders. Those who put their money on the trading industry gets younger and younger, with 18-34 years old braving the stocks and other assets. Previous traders aged 45 years and up tend to shy away from the business already. Probably, the result of knowing the advantages and disadvantages of internet trading.
Most of the young traders are no longer stuck in stocks trading alone. They have discovered a wide array of opportunities in cryptocurrency, FIFA, and more platforms.
According to the BrokerNotes research, women are getting more and more active and represented in the trading industry. In fact, 1 out of 10 traders are female with men being inferior due to their hyperactivity in the market.
As volatile yet lucrative as ever
One thing that amazes people about trading is that it’s volatile but still highly profitable. The activity in the market makes the buying and selling on top demand. This is one thing that traders exploit to earn an honest income.
But before you achieve this, you have to master some skills and learn some techniques. Before you dive in, here are some advantages and some brutal disadvantages that you have to know.
The Advantages
1. Low trading fees
Gone are the days when brick and mortar brokerage firms are the go-to place of traders. Right now, prices of transactions are at its all-time low which makes more and more traders hop into the boat. For as low as $5, you can buy and sell stocks right away. Of course, the price will differ on the asset that you’re trading in which is a normal part of the advantages and disadvantages of internet trading.
There are more cheaper trading platforms that you can find to save more money and trade more. Even if you’re using brokerage firm services, the fees are considerably low too.
2. Tons of online tools
Internet trading is on its boom, thanks to online tools and apps that make things easier. Trading platforms accessible in the internet are easy to use together with the downloadable software. Someone who had been trading FIFA items would know of trading bots that work in autopilot. All these are available in just a small price per month.
Low cost doesn’t always mean dud tools. Companies nowadays are coming up with useful tools for their users even at the fraction of the cost. Trading has never been this easier these days.
3. Control and flexibility
When you practice online trading, you have the ability to control your to access online portals whenever it suits you. It is in your own hands to execute trades without the need to personally meet brokers and visit different exchange offices. You can also perform trades via phone calls and held meetings through online means. One of the advantages and disadvantages of internet trading.
This isn’t just about control in the placement of trades. You also get to control the price of the trades and the operation of your side hustle. The time you save from every trade converts to savings in the long run.
4. Real-time monitoring
Gone are the days when you have to wait for the day’s paper just to check the stock exchange updates. Right now, you can access every detail in just a few clicks. All the updates are real-time so you can monitor market changes as it pops up in the system. There are even systems that offer a price updater so you won’t be left behind with the latest pricing even if you’re away from your computer.
From stock quotes to trades or simple player chemistry style in FIFA, you can always find tools to make things easy.
5. Low capital
Trading nowadays can have a newbie started for as low as $1,000 or even less which is one of the advantages and disadvantages of internet trading. This low-capital start makes trading more attractive than investing where one has to shell out a bigger amount of money and wait patiently until it yields income.
Even though trading is mired with high risk levels, you have the freedom to invest the smallest amount possible and still gain income. This way, you get to cut the risk of losing large sums of money if you’re a newbie. You get to start with a small capital and grow from there once you earn more and more income.
6. Easy market access
Just join some trading platforms, start trading, and you’re good to go. Although the process of trading is more intricate than that, the market that was difficult to access is now within the tips of everyone’s fingers. You no longer have to be an expert or submit requirements just to be prove that you’re a potential trader. You can build your identity in the trading industry slowly as you seal successful trades one after the other.
Like the full control you have over what you trade and when you want to trade, you also have the convenience of accessing the marketplace on your own. Just the right bargain for the advantages and disadvantages of internet trading.
7. Highly liquid assets
The trading industry has a seen a massive rise of traders over the past years. This saturation of willing buyers and sellers make trading assets very liquid. This means that you can easily convert stocks and other assets into cash the soonest that you sell it. Whatever price, as long as it’s reasonable, the assets can be sold in as fast as minutes or hours.
With this, slippage is minimized (although it can still happen to anyone) and the bids have been tightened. These days, a trader enjoys the streamlined process of entering and exiting a trade position.
8. Endless opportunities
With the liquidity, easy access, and streamlined process, trading is offering endless opportunities for anyone who puts their money on it. Internet trading, specifically, is now a go-to-market for side hustlers who want to make extra money at the comfort of their home.
Trading is no longer about stocks. Opportunities in cryptocurrency, gaming, and gadgets are booming nowadays. This is the reason why trading is becoming a widespread practice. If you don’t want to dip your hands on the complicated process of Forex, you can explore more products and services. Still, know the advantages and disadvantages of internet trading first.
The Disadvantages
1. Addictive
Veteran traders would likely agree that trading can be an addiction. It’s like opium that you simply can’t get enough of. This leads to bigger gambles including all-or-nothing bets or trades with high risk and the chance of losses. Excessive trading can happen and it’s proven in a published journal of the Addictive Behaviors. More and more traders prefer short-term trading techniques that they see to bring high income but also pose a sky-high level of losses.
Instead of trading, the act converts to gambling that isn’t healthy and can result in more defeats in the future.
2. Very digital
Internet trading can sometimes become purely digital. It pushes a person to spend more time in front of a screen. Digitized trading is easy and convenient but the fact that it only exists in the web can somehow create a different world. Once addictive trading happens, the digitized method of trading becomes a threat to a person’s well-being.
This manic approach towards trading is bothersome and should be stopped before substantial losses take place. So far, this is one of the crucial advantages and disadvantages of internet trading.
3. No brokers
Internet trading is both an advantage and disadvantage itself. It is a positive improvement since it makes everything accessible even in the farthest corners of the web. You do everything on your own which can be good and bad too. You don’t have brokers to guide you on the intricacies of trading and the depths of the process. It’s crucial that research be done first to compensate the lack of brokers.
Autonomy can be a good thing but it can also be unsettling for newbies. You have to learn everything about the product/services you’re trading to ensure that you’re going to come out alive in the market.
4. You’re prone to poor choices
Like what the popular saying states, “what we get easily, we esteem too lightly.” Since online tools for trading can be used, you have tendency to click the button without thinking of the repercussions to your trading income. Overestimating your income and underestimating the risk is a lethal combination that will kill the future of your trading business. Keep in mind these advantages and disadvantages of internet trading.
Experts had stated that well-thought off trades will likely yield a more stable income and low risk. Trigger-happy trading, on the other hand, is too easy to happen due to too much excitement of a trader.
5. Too fast-paced
The fast-paced nature of most trading platforms adds up to the hype of a trader. This can send someone placing a trade without second thoughts. You push the button right away and hope for the best even if the trade is done with lack of research and weighing. The reason? You feel left out in the current and you have the urge to keep up no matter what.
The good thing is you can control this kind of reckless habit. Place a limit on your orders and make sure that you have a trading safeguard installed.
6. Computer errors can cause you money
Even if you have enough knowledge, control, and techniques, one thing that can sabotage your promising trade is a computer error. Remember these forgotten advantages and disadvantages of internet trading. For example, trades may show up as incomplete but in fact, it was successfully posted on the system. Traders would place the same trade over and over again until it shows as complete. This would then be credited as two or more trades that could be out of your plan.
7. Everything is on the internet
Your internet connection is your lord when trading. It gets slow and your trading would get botched and money is lost. These simple things are usually left out of the discussion when someone plans to trade.
Experts recommend that a trader secure a backup plan in case they are cut short of internet connection. It’s good if a trading platform has alternative internet versions that can still function with slow internet connection.
8. Not for the faint of heart
You gain some, you lose some. If you’re a sulker who cries over a single loss, trading might not be for you. Once in your trading life, you’ll experience losses, big and small. You have to accept that it’s all part of the process. If you’re planning to make your first trade, you have to gird your loins for the possible result. Of course, you have the ability to reduce risk.
Do you have more points to add on these advantages and disadvantages of internet trading? Let us know below and we will discuss it with you!
