We live in the Internet era thus investments and banking transactions are offered online. The old times to be able to invest in shares, forex or other products you needed a broker who would receive your order in writing or by phone, forward it to his field representative and perform the trade.
Now you can find an online trading site that offers a user-friendly platform through which you can place your orders directly in real-time. This also means that you are spared of all the complicated procedures needed to open a trading account with an old-style broker, since you can do everything online from the registration procedure to the money deposit in order to credit your account and be able to trade at any time, as well as money withdrawals in order to collect your gains.
Additionally the platforms are so sophisticated that you can implement them in any device with internet access (desktop, laptop, tablets and smart-phones).
There is also another reason to choose an online trading site and this is that they provide you with a much needed service: Support. While you may not be an expert in trading, they can offer for free the support you definitely need from experienced traders. This way you do not jeopardize your hard earned dollars trying to guess exactly what your next trade should be.
Finally you can get an additional service via an online broker, Leverage. Let’s assume that you buy a share at $20 and you wish to sell it at $25 making a return of $5 a share. That’s an excellent return, 25% from a single trade, however how much money have you actually made? It depends of course on how much money you invested in the first place. Should you bought 100 shares you would have earned 100 x $5 = $500, descent money. Yet to buy 100 shares you would have needed 100 x $20 = $2000 of your own funds.
Now if your online broker offers a leverage of 100:1, in order to purchase the 100 shares you want you invest only $20 from your own money as opposed to $2000, so you can actually earn this $500 of the example although you have invested only $20. Have in mind though that although you invested only $20 should you made a bad trade you might lose $500 from your own money!
In conclusion the leverage multiplies your investment helping you earn much more money than you would without it, but also you should be very careful with the trade decisions you make.
Another great issue concerning web-based brokers is that there are quite a lot and unfortunately many of them provide you with poor and doubtful services.
Consequently you ought to be cautious so that you can choose a descent online broker and to take under consideration a few parameters and factors that any broker should satisfy.