While online commodity and foreign exchange trading have been around for a number of years, for many it is still seen as the “new kid on the block.” One major achievement of these platforms is that it has made financial markets such as these a lot more accessible to the man on the street, who would perhaps have never had any involvement with these markets.
These financial trading platforms open up a wealth of possibilities and can be particularly intriguing to those who are new to them. With great possibilities and opportunities comes the counterbalance of great danger, however, and that is true in this instance. We looked at the pros and cons related to online commodities trading, and what individuals new to these systems should look out for.
Pro: Get Up and Go
Perhaps the most appealing thing about online commodities trading is that it is very easy just to pick it up and get on with it. Most platforms are easy to use and come with simple tutorials to help you know what you are doing. The control and user interface is relatively simple in most cases, too. If you are looking to trade certain commodities you can usually set upper and lower boundaries and other variables on your program in the morning, then leave for work in the knowledge you are not missing out or losing copious sums of money.
Con: The Help at Hand
In fairness, most platforms have reacted to regulatory measures and now provide a great deal of expert assistance, step by step if necessary, as well as providing safeguards to ensure that people do not get in over their heads financially.
At the same time, online trading suffers from the disadvantage of not being able to offer real, personal support. Can you imagine how you would find your first day at work if all you had was a manual and someone on the end of the phone, or providing a live web chat?
Again, they have moved forward to the point where they could probably not do any better, however, this is a major flaw of online trading.
Pro: Paying Less
Dealing with a traditional stockbroker can be very expensive, whereas using an online platform you will generally pay either a flat rate or a percentage of what you make. Either way, you will find this sort of agreement much more beneficial and cheaper from a financial perspective for yourself.
Con: Over Trading
One of the biggest issues to someone new to a platform such as online commodity trading is that they can be like a child in a candy store. Both success and failure early on can be the catalyst for further excessive trading and is why a level head and self-discipline are critical for being financially successful in these markets. As with the help scenario above, many platforms and service providers now have some degree of safeguards in place to prevent this from happening, although the onus is still on the trader to be responsible for their own financial situation.