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Internet Trading

What is Internet Trading

Internet trading is a way of accessing trading on Forex, Stock and Commodity markets and electronic marketplaces through Internet, which gives traders the opportunity to make real-time transactions independently. Recently, another type of trading has become very popular - trading in cryptocurrencies. To better understand cryptocurrency trading, you can start with basic information on how to trade cryptocurrencies.

History of Online Trading

Before the appearance of the Internet, investors and traders were receiving information and were giving orders to brokers by phone, which was slowing down the process of trading. With the development of technologies and with the appearance of the Internet, trading on stock exchange became easier and more accessible.

In the middle of the 1990s many dealers and brokers of the Forex market started to develop their own trading platforms, which were supposed to simplify and accelerate the process of receiving orders from traders. Initially, the trades were carried out through closed online brokerage networks, which provided clients with the managing databases and online quotes.

During that period of time the dominator in the market was the scheme of the simple execution of clients’ requests, which were sent through a computer, then the broker processed them and transmitted for an execution. These kind of services were interesting mainly for the professional participants of the stock exchange, but, at the beginning of the 2000s, there appeared numerous dealing companies offering their services in the sphere of online trading for the broad masses of traders.

The availability of online trading attracted non-professional investors, who also needed additional services regarding the usage of financial instruments. Today, the broker provides a client with an access to analytical information and instruments of analysis, it receives and executes requests and in case of necessity consults with the client by phone or by the Internet.

What is Online Trading?

Nowadays, almost all the brokers use Internet for providing traders with comfortable trading platforms (with the opportunity of opening demo accounts), analytical support and instruments of technical analysis. Using the Internet, a trader can easily get all the necessary information for making transactions anytime and from any part of the world. With the appearance of online trading platforms for mobile devices, the availability of a smartphone and a connection to the cellular network has been enough for trading from any place, where the mobile connection will be available.

Formally, brokerage companies provide access to various financial instruments, but their services are not equal at all. There are many criteria for choosing a broker: the convenience and the speed of access to trades, the minimum amount of deposit, spread (normally be one to five pips between the two prices, if you want to learn more check out "What is a Pip in Forex" in this article), terms and cost of the withdrawal from an account, set of offered instruments, leverage, etc.

Thus, transactions with currency pairs, securities and other instruments of various exchanges and over-the-counter markets, which were recently available only to major banks, insurance companies and other institutional investors, now, thanks to the systems of electronic trading, they are available publicly.

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Author
Garry Berg
Publish date
06/08/23
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