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Online Trading Software

Online trading software: OK - now down to the basics of looking at hardware, softwareonline stock broker and the sort of online stock brokers who are available. Like everything else I like to keep this as simple as possible.

Whilst you may think you need to invest a small fortune in hardware and software for your online trading, this is not the case.

You can start very simply on a small budget! - you do not need the latest laptop, the latest screen, the fastest processor, or graphics card. Just keep it simple, and start making some money first before rushing out to buy the latest and sexiest piece of hardware on the market! So here are may basic tips to get you started, and remember there are many places on the internet where you can buy a refurbished pc so you don't need to spend a fortune on a new one.

Online Trading Hardware

For all my online trading I use a simple laptop pc. This is perfectly adequate. You do not need top of the range desktop pc's with multiple screens! A good quality laptop from a reputable manufacturer is perfectly adequate.

Make sure you have at least 256k memory as you will be handling lots of graphics on your charts etc. You can always upgrade at a later stage, but if you buy it initially it will save any changes later ( for the non technical ! ). One of the other advantages is that when you travel you can take your online trading with you. In addition to a good laptop pc, I suggest you buy a low cost printer. This does not have to be colour, but it helps if it is, as you will need to print of charts and other data from time to time.

Online Trading Software

For my UK shares I use an excellent package called Sharescope. Full details are available by clicking the link here stock and share trading charts. All you need to start is Sharescope Gold which is the basic level. This costs £80 plus a monthly fee of £14. They also give the option of a monthly trial so try before you buy! This package will give you end of day data on over 3000 shares, along with all the major indices and sectors, etc. You will also receive a host of other information including directors dealings, and data mining facilities which will allow you to extract data on share price movements for the day etc. I have never been on a training course which I believe they do offer - but they also have a free training video which will give you some of the basics. If you are happy teaching yourself it is not that difficult, and you will soon get the hang of it - and they have very helpful support staff. Please do not be seduced into thinking you need live data to trade stocks and shares - you do not. In the future you may feel that this is a requirement along with Level 2 (with level 2 you can see all the orders live in the market ), but personally I do not although it does give an insight into what the professional traders are doing, in much the same way as we analysing volume on the charts.

For my US stocks I use a software package called Chartsmart. For more details follow the link US stock options trading charts. This has been developed by a Canadian company and offers over 15,000 stocks. Not only does it offer excellent charting facilities, but it also allows for sorting on US stock options. Again they provide a demo version which can be downloaded - so try before you buy. It costs approx $28 USD per month for the basic end of day data download which comes in overnight. I do not bother with the news facility as there is so much freely available. For news I tend to use CNBC which comes with most Sky packages and Bloomberg radio on the internet.

For my forex and commodities trading, the only platform I recommend is metatrader 4 or MT4, and you will probably ask why? In simple terms it is the most sophisticated, yet simple platform that there is, and coupled with this, as you develop your online trading skills, it offers a vast array of automated trading modules called "expert advisors". These can be bought off the shelf, or you can design your own as you test various trading strategies. If you would like to try the platform for yourself, simply download a copy of MT4 here by clicking on the link - free download of MT4 software -  its free, and will give you the opportunity to try it for yourself - trust me once you have used this platform you won't want to use anything else - the stop loss management is a dream to use and will save you countless amounts of money over the years - trust me I know!  If you would like further details on MT 4 then simply click here ( download metatrader )for another of my sites which provides an introduction to this excellent online trading software.

Online Trading Communications

For placing orders and downloading data online, you will need a broadband connection. Please don't try to cut costs by using a dial up facility - it is too slow and will drive you mad! Costs vary, but you shouldn't be paying more than approx. £25 per month. Please be aware that most contracts tie you in for 12 months so make sure you are happy with the online support service before signing up - have a chat with friends, neighbours or colleagues and see who is better or worse. Technical support is generally fairly awful online whoever you use.

Something you need to think about for the future is back up in the event of a power failure etc. This is not critical when you are trading longer term, but even so it is something you should consider. If you have a power cut, your laptop will run on batteries for a few hours, but your phone may be cut of depending on the type etc. Have a mobile available so that if necessary you can ring your online broker and trade via the mobile. It's just common sense really and a question of planning for that disaster which will eventually happen!.

Online Trading Brokers

In essence there are two types of broker, namely advisory and execution only. The first is the older type of stock broker who you would call for advice to discuss your portfolio. Quite why anyone would want to ring their broker for advice is beyond me - if they had anything of value to tell you they would be doing it for themselves. They are expensive and an out-dated status symbol - manage your own investments - don't waste money giving it to somebody else who knows no more than you!!

In the last 5-10 years there has been an explosion in online brokers. With an execution only online broker they simply provide an online platform which allows you to buy and sell easily. They do not offer advice. Some allow you to trade over the phone at extra cost. They all offer nominee accounts which simply means that you do not have to worry about holding share certificates etc. It makes online trading more streamlined and straightforward. In essence your online broker holds them on your behalf. One thing you will need to check is whether they offer stop loss orders. Some will, some will not - some will charge for this, others will only charge for guaranteed stop losses. Please check to make sure this facility is available before you open your online account, and any associated costs.

One other issue is order types. You will see lots of information regarding different order types supported by the online broker. In my view I believe you only need to trade using market orders when you start. A market order is simply the price quoted by the online broker at the time you place the order i.e. the current market price. ( you can use all sorts of sophisticated order types which will probably confuse you ).My view, very simply, is this - are you seriously worried about the odd 1p over a long term trade - probably not. I have never used anything other than market orders.

All online brokers will charge different rates somewhere between £7 - £12 per trade. Please check their terms carefully and compare one with another. There are pros and cons for all. Check on the internet, there are always comparative sites comparing one with another. Be prepared to shop around, and make sure that they are regulated by the FSA. Check also the amount of compensation in the event that the company fails ( it does happen as it happened to me with a Futures Broker in the late 90's ). In my trading I have used several for UK trading - all have pro's and cons. The only broker I will mention is Interactive Brokers. For trading small volume stock and options in the US market they are unbeatable. Their commissions are very low at $1-2 per trade. They provide excellent real time live charts and data. Now, the downside - this is a professional platform and it will take you some time to understand how to use it effectively. At first glance it is very confusing, but well worth the effort. It is not designed for new traders so please don't apply for an account. You can trade exchanges throughout the world, so yes you can use them for UK shares and options. They do run training courses so if you would like further details please just send me an email and I can provide the details.

Each time you open or close a trade most online brokers will send you a contract note ( Interactive do not ). This will detail what you have bought or sold, duty and commission. These will either arrive electronically or by post. They are important records so please keep them safely. That just about covers the hardware, software that you will need to start your online trading, including the brokers available. Now, lets look at some basic record keeping and general items that didn't fit in anywhere else!!

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