Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, through the purchase or sale of the aforementioned products.
This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.
E-commerce continues to experience rapid growth year on year for several reasons.
First, the number of brokers offering their services, with more money being spent on advertisements and sponsorships to attract potential traders.
Second, more and more merchants are aware of the ease with which they can apply for accounts online; the low barrier to entry now means that a trader only needs to deposit virtually as little as they want to place trades.
Third, improved financial technology, better hardware and software, leading to fast and consistent execution, which in turn is aided by higher liquidity and lower trading costs such as spreads and commissions , have fueled the retail industry immensely.
How to trade online?
Before the emergence of the Internet, merchants had to transact over the phone, which could be quite tedious, especially if one wanted to complete multiple transactions in a short time.
Indeed, online trading has opened up a new field of trading in the form of forex scalping, either manually, or through automated trading robots.
An example of online trading is trading the forex market with a forex broker, using a platform that the broker will provide.
The trader installs the platform on his computer and receives the necessary information and tools to start trading.
The most common online retail platform for forex trading is known as MetaTrader 4 (MT4).