Financial Trading Gurus at their best. Join the eToro Guru Program

Learn

5 Useful Online Trading Tips

 

 

 

4. Place an Order Once, not Twice

Placing orders online can have time lags, sometimes taking several minutes to confirm the trade. If an order is placed and no immediate confirmation is received, do not assume it did not go through. Traders sometimes get overly anxious after the entry mouse click, unintentionally placing a second order in haste thinking the first order was not executed.

Technology issues and low market liquidity can delay order confirmation. Patience is important, one develops a feel for average waiting times with a particular broker only through experience and taking many trades. 

Ask your broker about the relevant steps to take when unsure about the execution status of an order

 

When cancelling an order, ensure it is confirmed before placing the next trade. An order can only be cancelled if it was not executed as yet.

  

 Ask your broker about how to confirm order cancellations. 

 

5. Margin Calls

Brokers can close and liquidate client positions without a margin call when trading accounts incur large losses. Brokers use margin calls as a client courtesy. They are under no obligation to contact the account holder before executing exits on the client's behalf.

Review the broker's terms and conditions before opening an account. Understand the margin rules and pay attention to the agreement fine-print before signing. Clarify clauses with the broker where necessary

" Successful traders are familiar with important aspects influencing their trading account such as broker policies, procedures and rules. "

 

Brokers are obligated to do what is best to protect the client and themselves from major losses. They can act if the market moves even when a client may have been allowed time to transfer cash to meet the margin call.

In rapidly changing markets, brokers can liquidate an entire account at a substantial loss because the client's positions significantly declined in value.

 

6. Conclusion

These are some of the pitfalls involved with online trading. Selecting the right broker is imperative to trading success. It is an integral component of risk management.

Use these tips to improve your online trading success. Planning ahead to meet the challenges presented will prove invaluable in the long run. 

 

 

Additional information