| The invention of the Internet has brought about | | | | to buy or sell a stock, they earn a set percentage of |
| many changes in the way that we conduct our lives | | | | the transaction. Many brokers charge a flat per |
| and our personal business. We can pay our bills online, | | | | transaction fee. |
| shop online, bank online, and even date online! | | | | There are two types of brokers: Full service brokers |
| We can even buy and sell stocks online. Traders love | | | | and discount brokers. A full service broker can usually |
| having the ability to look at their accounts whenever | | | | offer more types of investments, may provide you |
| they want to, and brokers like having the ability to | | | | with investment advice, and is usually paid in |
| take orders over the Internet, as opposed to the | | | | commissions. |
| telephone. | | | | Discount brokers typically do not offer any advice |
| Most brokers and brokerage houses now offer online | | | | and do no research - they just do as you ask them |
| trading to their clients. Another great thing about | | | | to do, without all of the bells and whistles. |
| trading online is that fees and commissions are often | | | | Many people who trade purely over the internet will |
| lower. While online trading is great, there are some | | | | often use the services of a discount broker. |
| drawbacks. | | | | If you aren't stock market savvy, online trading may |
| If you are new to investing, having the ability to | | | | be a dangerous thing for you. If this is the case, |
| actually speak with a broker can be quite beneficial. | | | | make sure that you learn as much as you can about |
| Brokers work for brokerage houses and have the | | | | trading stocks before you start trading online. |
| ability to buy and sell stock on the stock exchange. | | | | You should also be aware that you don't have a |
| You may wonder if you really need a broker. The | | | | computer with Internet access attached to you. You |
| answer is yes, if you intend to buy or sell stocks on | | | | won't always have the ability to get online to make a |
| the stock exchange. | | | | trade. You need to be sure that you can call and |
| Stock brokers are required to pass two different | | | | speak with a broker if this is the case, using the |
| tests in order to obtain their license. These tests are | | | | online broker. This is true whether you are an |
| very difficult, and most brokers have a background in | | | | advanced trader or a beginner. |
| business or finance, with a Bachelors or Masters | | | | It is also a good idea to go with an online brokerage |
| Degree. | | | | company that has been around for a while. You |
| It is very important to understand the difference | | | | won't find one that has been in business for fifty |
| between a broker and a stock market analyst. An | | | | years of course, but you can find a company that |
| analyst literally analyzes the stock market, and | | | | has been in business that long and now offers online |
| predicts what it will or will not do, or how specific | | | | trading. |
| stocks will perform. A stock broker is only there to | | | | Again, online trading can be exciting and profitable - |
| follow your instructions to either buy or sell stock, | | | | but it isn't for everyone. Think carefully before you |
| not to analyze stocks. | | | | decide to do your trading online, and make sure that |
| In most cases, brokers earn their money from | | | | you really know what you are doing! |
| commissions on sales. When you instruct your broker | | | | |