When you use an online broking service, you must take full responsibility for your buying and selling decisions. Nobody makes a profit on every trade but you must aim to get it right more often than not. You will need skills not just in stock selection and asset allocation but also in money management.
These skills are covered in this book and you will find them useful even if you have an advisory or discretionary broker and simply want to understand the implications of investment choices.
Online brokers have the major market share because of four distinct practical advantages:
Low cost. Some of the larger brokers in particular have made cost syner¬gies and have a leaner, more efficient infrastructure with less manual inter¬vention. This, coupled with high volumes of trade, helps to keep charges low.
Accessibility. You can visit your broker’s website 24 hours a day and have access to your portfolio, with the latest available share prices. You may often pull up charts showing price movements of selected stocks or indices, and fundamental data. Through some firms you can place deals after trading hours, and they will be executed when the market opens the next morning.
A fast dealing service. The speed at which you can trade online compares favourably with traditional broking.
Small size dealing. This could be useful when you are starting out as an investor.
