The internet has a profound impact on everything we do today. It has made things easy and accessible beyond our imagination. One of these things is investing. There’s no question that internet has been hugely beneficial for investing.

One of the biggest benefits the internet has provided for investing is perhaps the wide availability of information. Prior internet, investors had to get information from local libraries by reading finance literature and researching about companies and securities (stocks) or by directly contacting the companies for their latest financial reports, which was a very costly and time-consuming process.

Yes, not everyone could just simply trade in stocks. It demanded some really good efforts, money and time. But today it’s just a matter of few clicks!

You can simply find financial reports, the latest industry news, and all the relevant information on the web. These reports can be downloaded in seconds and you don’t have to pay the brokers or investment managers for analyzing these reports as hundreds of websites do it for free!

Trading comes with its own fair share of anxiety and risk. People love to experience the feeling of ‘excitement’.  Hence, despite the fluctuating nature of this industry, it attracts many. The internet has hugely benefitted the investors in three principal factors
Transparency

Investors can get all the information from any source across the world wide web. They can analyze and come down to their own conclusions on how to properly price securities.

Differential Pricing

The demise of full-service brokers that charged high prices until the internet significantly lowered the costs that the industry charged to make financial transactions.

Disintermediation

The investors today simply do not have to pay the old-school full-service brokers and advisors for both information and trading of stocks.

 

The internet has placed considerable power in the hands of individuals and hence, India’s lockdown mints more than a million new stock traders- The Times of India

 

The pandemic has spurred people (especially youngsters) for the first time in their lives, to get started with investing. The work-from-home has given people the bandwidth to do something they haven’t done before. Investing has become the ‘talk of the town’.

Source: Bloomberg

The chart shows the growth in the number of investor accounts post the lockdown.

The tip here is to learn a bit about the industry and companies you wish to invest in. Trading can only be fruitful if risks are calculated and carefully taken. There are plenty of courses on the internet on how to learn and trade securities, decode price charts, analyze reports, etc. Trading has a potential for huge profits as well as losses. People are hence fascinated to try their luck. But then trading loses its essence and becomes ‘gambling’ if investments are made based on mere predictions or instincts, which of course never works in long-run.

 

Since everything here is dependent on the internet, it essential to know that a slow internet connection greatly affects your results especially if you’re a day trader.

Slippage

It is the difference between the expected price of a trade and the price at which the trade is executed. Market prices change quickly. Slow internet can cause the delay between a trade being ordered and when it is completed; allowing slippage to occur.

Re-Quotes

Re-quotes are similar to slippage but here the broker asks the customer to execute the trade at a different rate than the one they requested because in such cases the rates originally requested are no longer available. (Let’s say if the rate is bid 1.233 and ask 1.234 and the trading platform may re-quote the trade automatically at 1.235 around the time the trader clicks submit/enter to confirm the order)

Order Rejection

There could be many reasons to why your order gets rejected; to which one could be your poor internet connection.

Delay in price charts

These charts are very essential to determine whether stocks are appreciating or depreciating in value. As the nature of the market is volatile, these delays come with a big cost.

To be successful in trading securities, you need to make quick and informed decisions. Make sure you have an internet connection which ensures quick loading, downloading and uploading speed. Hence subscribe to a reliable, high-speed internet connection today.

 

“The key to making money in stocks is not to get scared of them”– Peter Lynch

If you actively trade in stocks or maybe wish to, remember to not get disheartened too soon.

Be patient and learn every day but especially from the experiences of others, it’s cheaper 🙂