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Online
Stock Market Day
trading
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Online stock market day trading has increased in recent years as market
access has improved due to technology such as the internet, broadband
access and online brokerage trading platforms. Furthermore, the cost of
doing business has also been reduced as discount commission structures
make trading more cost effective. In the past, traders were required to
use full service brokers to execute transactions and were faced with
higher round turn costs. This reduced the incentive for smaller traders
to operate because the cost of doing business did not make small
transactions viable. With competition intensifying in the brokerage
sector, small traders can now participate with lower commission rates.
This benefits the market by providing greater market liquidity.
Although costs have
come down in most countries, the
lower commission rates offered on US markets has meant that the US is
still favored by traders worldwide as the place for online stock day
trading. This is further compounded by the range of markets and
liquidity to facilitate trading. The range and choice of instruments to
trade and the time zone convenience for European Traders also
contributes to the popularity of the US markets for online day traders.
Day trading also takes place in other worldwide markets, particularly
Europe.
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Companies such as
Interactive Brokers have also been a
blessing for online stock day trading by providing an access gateway to
over 60 international markets. Traders from across the globe can hold a
Universal Account in a nominated base currency. Providing they have
data access, this can provide access to up to 70 different
international markets. Previously, this level of access was reserved
for traders operating from investment banks. Small traders who are
technically savvy are able to use third party charting and development
platforms to create strategies to suit the markets they trade and the
time duration of the trade.
Proprietary trading
firms have also arisen in response
to market structure and demand. These firms employ online day traders
who use either their own capital or the firm's capital to trade
securities across a diverse range of markets. In some cases, traders
are trained using the firms trading strategies and learn online
trading; in other cases, the traders are expected to have working plans
and adhere to approved risk management frameworks. This is a tough and
competitive environment but financially rewarding for online stock
market day trading participants who invest the time to acquire
knowledge, skills and experience.
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Article: Online
Stock Swing Trading
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