Click go the shares
Summary Description Buying shares online is not as difficult as you may think.
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Roullas Top10 Simon Vandore

Newswire
No


Editorial InformationArticle Location http://www.newswire.com.au/0004/5MG20.htm
Article Topic 5 Minute Guides
Story Order
Story Group 000423
Post Date 20/04/2000 04:53 PM Status Posted Entered by Simon Vandore on 20/04/2000 10:48 AM


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How do I buy shares online?
To buy shares online, you need to use an online stockbroker, such as E*Trade, ComSec or Green Line. These are real stockbroking companies licensed by the Australian Stock Exchange (ASX), but customers do their own research and place their own orders for shares via online forms.
Brokerage fees are generally lower because this is a much cheaper way for stockbrokers to handle transactions. The downside is that online customers miss out on receiving individual advice from an experienced broker. Then again, doing things online brings investors closer to the market and once you've become a broker's client via snail mail, almost everything else is handled through your Web browser. Note that new share issues (such as recent floats of government companies) generally require forms to be snail mailed (that is, physically sent through the post) due to red tape.
When comparing brokerage fees charged by such companies and calculating transactions, remember that government stamp duty of 15 cents per $100 (or part thereof) applies to all share trading. A good place to start learning about online share trading is the ASX's own Web site.
As an Australian you can also now use overseas brokers such as the US version of E*Trade, but you often require a bank account with enough funds to perform the transaction in the relevant country.
What is a 'day trader'?
A day trader is a person who makes a living by riding the markets' daily fluctuations, generally over the Internet. They make quick investments and sales compared to other investors, winning and losing all day and trying to come out ahead. Usually they work various markets: shares, futures, and/or the money market, trying to make the small gains which form their income. It's a full-time occupation -- picture someone sitting at a desk with multiple displays, staying up-to-date with the news from various sources and soaking up financial tips, while watching market indices fluctuate live online.
Day traders existed before the Web, but most day traders now exist because of the Web. They take advantage of the increased speed of information and transactions. Some in Australia are even lucky enough to have direct connections to CHESS, the ASX's online computer trading system.
At the moment, day traders love technology stocks. Often the fortunes of new dot companies are directly affected by speculative day trader transactions. These stocks are volatile and often overvalued, meaning a day trader can win or lose a great deal of money depending on the markets' view of Internet stocks.
Sounds great. Can anyone be a day trader?
Yes, anyone can be a day trader but only a few highly skilled people are able to be a day trader for any length of time. If you don't have a lot of experience working the markets already, you are unlikely to succeed in this line of 'work'. The most successful day traders are people who have worked for many years in more traditional investment jobs and have a good understanding of when to commit and when to quit.
Research is crucial. Sites like Pristine.com, and even the brokers themselves, offer tips and background information daily. There are a few Australia-specific sites, too.
How do I minimise risks?
If you are a long-term investor, the risks are the same online as offline.
If you are day trading, you need to spread your commitments. The best day traders recommend that you keep a big reserve and don't take any chances that could lose you more than you could handle. Define your investment funding pool and don't commit beyond it.
If you intend to play the markets fast, it pays to have accounts with several online brokers to spread the risks. For example, if you have only one broker and its site is down, you might hit serious trouble.
Essentially, day trading is gambling. Experienced players can make better educated guesses than others, but at the end of the day they are at the mercy of luck. The traditional advice to those making fast market plays is to "cut your losses and let your winnings run" -- sell falling stocks quickly, and give rising stocks some breathing room -- but it's easier said than done.


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Bulletin SummaryClick go the shares
Buying shares online is not as difficult as you may think. Newswire explains how to buy and trade shares online, the role of the day trader, and why you shouldn't commit everything you've got into the sharemarket.


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Click go the shares: Buying shares online is not as difficult as you may think.

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