Online investing is a relatively new phenomenon. For more than a century, all securities transactions took place either in person or over the telephone. After the digital age began, the practice of placing orders for securities via a computer terminal quickly replaced those older methods. Nowadays, when people use the term online investments, they’re mostly speaking of home-based trading done by individuals planning personal finances and who make their own decisions about what to buy and sell. If you plan to engage in short-term techniques like day trading, scalping, and swing or gap trading, here are some guidelines that can help you get started on the right foot.
Investigate Brokers
Try to identify reputable brokers that cater to short-term investments like scalps, day trades, and early morning gap trading. Some brokers and platforms are not set up for frequent transactions and tend to work better for long-term or retirement account securities transactions. It never hurts to phone or email a brokerage firm and ask if they welcome high-frequency activity. Some do and some don’t.
Consider Day Trading
Scalping typically involves large amounts of capital used for purchasing a single stock. The goal is to wait for a tiny price change and earn a profit on the huge number of shares. It’s not for beginners or those with small accounts. Day traders spend minutes or sometimes hours on a single deal, and don’t need large amounts of money to take part in the action. Instead, consider an equally exciting but must less risky activity called day trading. In fact, to get started, you can review a day trading guide for beginners that makes learning the basics easy and fun. Then, after a few weeks of practice on a simulator, you’ll have all the tools to make multiple daily purchases and sales, closing out with cash before the end of each day’s session.
Have a Backup Order System
It’s imperative to have a backup plan for those times when your at-home computer system stops functioning properly. A mobile device, set up and ready to go, is one option. Another very reliable tool for these kinds of emergencies is a standard telephone. Most brokers list a direct line number on their main websites that you can call when all your other devices fail. This sort of backup arrangement can save you if you need to get out of a large trade very quickly and your computer crashes at just the wrong moment.
Use One Broker and One Platform
Try to stick to just a single broker and platform, after vetting the ones who made your short list in the beginning. Some people do open multiple accounts, but for short-term investments, it’s wise to find a brokerage firm you like. Plus, each online broker has its own unique ways of order placement, accounting, and funds settlement. Knowing one firm, inside and out, will serve you well.
Employ Smart Security Practices
Be careful not to let your sensitive information and data get into the wrong hands. For example, avoid placing orders while using public Wi-Fi systems or on someone else’s smartphone or computer. Likewise, don’t store your passwords or account numbers on a non-encrypted system.
