What is Online Trading and how does it work?


Today, online trading in Spain is gaining more and more importance. Traders can buy and sell a wide range of financial instruments with just one click. In fact, online trading offers a wide range of opportunities, as traders can access global financial markets from their own computer.

Trading – What is Online Trading?

To know how online trading works, it is first necessary to be clear about what it is. Online trading consists of participating in financial markets over the Internet. Traders and investors buy and sell financial instruments through a trading platform offered by a broker. Trading decisions are made on the trading platform and instantly sent to the broker, so you need to have an internet connection (hence it is called online trading). Trading activity is, therefore, speculating on financial markets, trying to take advantage of changes in asset prices to earn money between the time of purchase and sale, or vice versa, because it is possible to sell a product that it is not yours.

Online trading is a serious activity that should be understood as a profession and not a way to quickly earn a lot of money without risk and without knowing anything about it. Apart from that, it is true that trading is accessible to all those who are ready to work hard and participate 100% in this activity, where the psychological is a daily challenge. That is why it is very important to start with a broker that has good regulation and helps you and train you throughout the process.

Trading | Evolution of trading with technology

Trading has grown substantially since the 1990s due to the advances made and the high speed achieved in both computers and Internet connections: The Internet: The growth of the Internet is staggering, as global statistics show. People are now also using the internet for the purpose of trading. Computers: Moore’s Law indicates that the overall processing capacities of computers will double every two years. This will allow traders to quickly connect to the internet and perform analysis on their own personal computer. These two trends have fueled rapid growth in online trading and democratized access to financial markets in a way we’ve never seen before. More and more people are able to trade online, and this trend seems set to increase exponentially in the future if we consider the fact that more than 1.7 billion people with mobile phones are still excluded from the financial system. Online trading offers a long list of benefits compared to the pre-internet era of telephones, telegrams and faxes. Now we will see the benefits of online trading in Forex and CFDs (and risks) and their characteristics:

Trading Online – Benefits compared to the past

Before the advent of the Internet, traders and investors had to take care of all their transactions and requests by mail, phone and fax. For current scenario online gaming merchant account costs more than usual. Most of the time, traders made a buy or sell decision over the phone with their broker. The process was slow, as brokers needed to confirm the details of the transaction, such as price, volume, type of operation, duration of operation, exit price, account specification, etc.

The digital age has impacted online trading in a revolutionary way. The difference between the past and the present cannot be greater. With the development of the Internet, the markets available for trading are very diverse: stock indices, bonds, currencies, ETFs, warrants, commodities, indices and derivatives. Traders can trade multiple markets at the same time, as the money invested belongs to them and they take the risk of trading multiple markets at the same time.