The last decade has seen a tremendous growth in the way the online trading system has evolved. Owing to the constant changes in the market conditions and with a range of marketing sectors added to the list, it becomes a challenge for the traders to decide the trading platform to be used for successfully trading while meeting the individual needs and the expectations.

There are various online trading systems available in the market that work on a set of rules applicable to the current market conditions. With the implementation of the set of rules tailored to the market needs along with the usage of the risk management tools, the traders can invest minimal capital amount and gain maximum benefits. With thousands of trading financial investment options available in the market, the system must be capable of dynamically changing the terms of the trading activity and must be capable of leveraging profits both when the market value is raising or falling.

Further, there are lots of statistical data that is used to compare the performance of the latest online trading systems with the traditional systems. This statistical data is computed based on the performance of the trading system, which is determined over a series of operational points. There are many operational points that determine the flexibility, stability, cost-effectiveness factors of the trading system. Some of the operational points that directly impacts the system performance are: the design of the system for trading easily, monitoring the factors that contributes to the price movement of the trading asset, capital investment requirement to maximize profits, duration of trading supported by the system, risk mitigating factors adapted by the system, and the list of underlying assets that can be traded through the system.

In addition to the operational points, the trading system must be capable of enhancing the technical analysis capability of the trader by providing latest technical news about the share market, company’s performance, trading strategies, market fluctuations, and so on. By using these building blocks of the online trading systems, such as the operational points, the technical analysis, and the marketing information, traders can choose the best trading platform available in the market for trading easily and efficiently to address the individual needs and requirements.

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Risk control techniques, and self control practices are two essentials that are vital for a successful stock trader. Once the trader gets aware of the formula to assess risks, then success is not far at all. To calculate the money management angles, the trader has to spend on third of the time in doing effective searches, studies and researching. Stocks may look highly attractive but the risks parameters may not suit the specific trader. The vice versa can also be true in some other cases.

Analysis and resultant clarity are vital at that point of time to take right decisions.

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Financial securities, financial commodities and other such fungible items are traded in financial market. Transaction costs are comparatively low in such market. Moreover, prices of these items reflect their supply and demand as well. In financial securities, items such as stock and bonds are usually included.

On the other hand, precious metals or agricultural products are part of financial commodities.

Economics however, defines market as aggregate of sellers and potential buyers of a specific item or certain service and transaction that takes place between buyer and seller. It means there are three main components to form a complete market body. Those are sellers of the item or service, buyer of the item or service and transaction that take place between these two parties. Such transactions usually involve exchange of a particular item in return of money, or other item / wealth.

However, sometimes term market is used strictly to refer exchanges or organizations that work in order to facilitate trading of financial securities or financial commodities. Various stock exchanges and commodity exchanges are great examples of such organizations. These organizations can either be physical or electronic systems. Examples of physical locations are NYSE, BSE and NSE. They can also be electronic systems without any physical existence and NASDAQ is the greatest available example for demonstrating such system. Most of the trading related to stocks and bonds usually take place at exchange.

However, corporate actions such as merger and spinoff take place outside or without a stock exchange. Moreover, if one company decided to sell their stock to other one with their agreement, there will be no requirement for stock exchange in such initial transaction.

Most trading of currencies and bonds are usually based on bilaterally. There are still many people who prefer to use stock exchanges as medium for trading, buying and selling stocks. On the other hand, there are also some people developing electronic systems that serve the same purpose as a physically existing stock exchange does.

Day trading is an important concept or say component of stock exchange and trading. In upcoming chapters, various aspects related to this concept will be covered with deep details.

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