There are many golden rules people tell you about when you start with online stock trading. Undoubtedly one of the most important of these is not to make hasty decisions.

The Art of Investment

Individuals in successful investing are not a strange phenomenon anymore. With technology by their side in terms of sophisticated trading platforms, software and even mobile apps, there’s so much information to educate individuals and even help them make complicated investing decisions faster and easier. But in spite of all that data, studies show that when individual investors are left to themselves, they underperform in the wider market consistently. Could it be that all the data at their disposal actually leads them to make wrong decisions, or gives them a sense of overconfidence?

Perception of Too Much Knowledge and Rash Decisions

According to an analyst at Dalbar, quoted by Investopedia, when individual investors believe they know something that can’t be possibly known, they lose up to half of the potential gains produced by the market. One of the major problems that have been identified is their tendency to jump ahead of themselves. Instead of finding out and researching good investments, and holding to them, individual investors start reacting to any and every headline they come across. They perceive excessive alertness to be a sign of good investing behavior. But such an emotional reaction to headlines can do them more harm than good. As a result, they get rid of their winning investments and instead hold on to the losing ones. A measured approach is needed whenever headlines or new market trends crop up.

Sticking to a Diversified and Long Term Plan

The smartest way to overcome this emotional reaction is to have a fully diversified and long term plan which you should stick to. You do find robo-advisors online. These use software and algorithm to get an investment portfolio generated for you. A robo-advisor can also re-balance your holdings automatically and help you stay on the right path. And always remember that your investment plan should focus on long-term investments since every little investment costs you. So before you do make a trade, you must consider all the transaction costs that would be involved with that trade, since you would have to part with your profit to pay those costs. If you have enough savings to spare, you can try quick trades with a small percentage of your savings.

Helping You in Online Trading

Ultimately, it pays to sign up with an experienced online broker dealer that gives you commission-free trading opportunities. You’ll find that with TradeZero. Zero commission trading is a great advantage to traders, particularly those starting out new. We have sophisticated trading software that can also be accessed on mobile and which gives you live market view all the time. So see how efficient online stock trading can get by contacting us at +1 954-944-3885 or emailing us at support@tradezero.co.

DISCLAIMER

The content provided here is solely for informational and educational purposes and does not constitute an offer to sell or a solicitation to buy any security or instrument which may be referenced upon the site, or an offer to provide advisory or other services by TradeZero in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Investors are advised not to rely on the information contained in this writing to make an informed investment or financial decision. TradeZero explicitly disclaims all liability for any action taken based on any information contained in this writing.