Trading in shares, debentures or other listed market commodities done by an individual through a computer terminal which has internet connection is called online share trading. Today’s global e-commerce and trade pattern has greatly paved the way for online trading and in most developed countries of the world, offline or conventional trading has actually ceased to exist. The Australian stock market is one of the strongest in the world and significant volume of trades in the Australian stock markets happen through online trading.

10 Key Points to remember

1) Online trading Account – There are number of share broker agents or even banks (for example ANZ and HSBC) with which you  can open this account. Procedures are fairly simple and it takes around a week’s time for such trading account to get activated.

2) Enquire about brokerage rates and taxes which you have to pay for the trading account. After considering all options it would make sense to open the trading account with the agent/Bank who is offering the lowest brokerage rates.

3) Different brokerage rates are available for different trading methods like delivery trading and intraday (day trading) trading. These rules are transparent and are clearly defined by the Australian Stock Exchange regulatory authority.

4) Before opening the Trading account it is advisable to insist the agent to get demo of the online trading software or terminal and check the reliability and speed of the connection.

5)Confirm about between-the-line-charges and any hidden costs if he needs to bear any. These investigations should actually form basis of his decision as to where he wants to open his online stock trading account.

6) Hardware and Software setup – This is the next important step. A computer loaded with all necessary software should be arranged for. That would give him the comfort of trading from home, Else the Australian investor would need to go to an internet café.

7) The next requirement is an internet connection – These days extremely fast internet connections are available in Australia. The investor should finalize on any one of the service providers after checking the speed of connection and the cost.

Awareness of Stock Market terminologies and jargons – Once the logistical arrangements are taken care of, the Australian citizen must put in some effort to understand various terminologies that are commonly used in the stock market. This would come very handy once he actually starts doing the trading.

9) Periodic knowledge update and stock tips from key market analysts and big stock brokers. This is required most importantly when the stock market is moving erratically or without any definite trend.

10) Know your financial boundaries correctly – An Australian citizen should carefully estimate his available capital, ability to absorb/bear risks and the profit estimate that he considers to be adequate, before getting involved in online share trading. As a rule of thumb, it is advisable not indulge in overtrading.

Briefly speaking, these are the 10 things which an Australian citizen should consider before/while doing online trading.

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