Trading tips

Here are some helpful hints on how to avoid the potential pitfalls of online trading:

• Don't rush in to anything

  Consider purchases and sales carefully and always research your decisions.

• Be careful about borrowing money to buy shares

  Some brokers offer margin trading, where you are effectively borrowing cash to invest. This can be a risky form of investing and should be treated with caution by all but the most experienced traders.

• Always double-check your deals to avoid mistakes

  Always remember to double-check your transaction before you confirm it.

  With trading moving swiftly into the electronic age, you could easily end up clicking on the wrong button and buying £10,000 worth of shares rather than £1,000.

  You should receive online confirmation of your deal, so check all is in order. Also, monitor your account balance and check any certificates you receive to ensure that the transaction has been completed to your satisfaction.

  If you do make a mistake or notice any problems, contact your broker immediately. They may be able to cancel the order, or minimise your risk by carrying out an equal and opposite trade.

• Don't put all your eggs in one basket

  You don't have to spend all your money in one go. Neither do you have to place all your money on one or a small number of shares.

  You can reduce the risks by putting money into a variety of shares or a collective fund.

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