stock trading

The Advantages and Disadvantages of Online Stock Trading in the Netherlands

Innovation in the trading systems in the Netherlands continues to attract many investors into the small business-friendly nation. Stock traders are choosing other ways of investing instead of using the brick-and-mortar stockbrokers. They are choosing to trade with online platforms and trading apps.

However, determining the top investment applications and online platforms in the Netherlands can be a daunting endeavor. Numerous paid and free investment apps are available in the Netherlands. They all claim to be the best, and so do the available online platforms, which can be challenging to new and foreign investors.

Previously, stock exchange transactions were via phone to the stockbroker, who bills for executing the transaction. However, with the development of stock trading applications and online stock trading platforms such as SaxoTraderGo by Saxo Bank, you can execute your trades from anywhere using any device of your choice.

Even though the internet empowers investors to make more decisions by themselves, online stock trading has its advantages and disadvantages.

Advantages of Online Trading

1.    Minimal transaction fees

Online stock trading eliminates the payment of excessive fees associated with brokerage firms. It also minimizes transaction expenses. An online discount brokerage firm will charge you between $5 and $10 for trading ETFs and stocks.

2.    Flexibility

Stock trading is a time-sensitive market. Online trading allows you to make your transactions instantly. Unlike trading with a brick-and-mortar broker, you do not need to set up an appointment to execute the trade with an online trading platform.

3.    Ability to circumvent brokerage prejudice

Broker bias is a common thing in all trading markets. By seizing control of your trading using an online trading platform, you can eliminate brokerage bias. Bias occasionally occurs when a broker provides financial advice that benefits them more than they benefit the investor.

4.    Real-time monitoring of investments

Numerous online trading platforms provide stock quotations and trade information, allowing users to monitor the performance of their assets in real-time.

5.    Online tool access

In the world of internet trading, a low price does not always imply a substandard product. Online stock trading platforms offer numerous trading tools and immense information to help traders maximize their profits.

Disadvantages of Online Stock Trading In the Netherlands

Stock trading is one of the largest markets in the Netherlands, with online trading platforms making a significant impact on its popularity and success. However, that is not to say that online stock trading does not have its drawbacks.

1.    Invest too much too quickly

One of the most attractive things about online trading is its simplicity. However, the same simplicity is also a disadvantage because it might lead you to invest too much too quickly. All you need is a touch of the button and make either a good or poor investment decision.

Traders can avoid making poor decisions by familiarizing themselves with the stocks they invest in and establishing safeguards in fast-moving markets. One way to do this is by placing a limit order on your trading account.

2.    No personal ties to brokers

Online stock trading means that you will not have any physical integration with a broker. Sometimes you might need face-to-face help, but all you have is a device, which might not give you the results you need. However, some of the most prominent international online trading platforms ensure that you have everything you need at your fingertips. Still, it is disconcerting for some traders.

3.    Potential Addiction

Addiction does not happen in gambling. Investing too can feel like gambling, especially if you cannot stop even when things are not going too well for you. Some investors pursue short-term trading techniques that involve investing in high-risk equities that offer the possibility of enormous gains but also significant losses.

4.    You need an internet connection

You cannot trade online if you do not have an internet connection. If you have a poor connection, you risk missing potentially significant or lucrative trades. If you are in a remote place with no internet connection, it means you cannot trade.

5.    Double purchase due to device malfunction

Devices can let you down at any time. Whether you are using your mobile phone or a computer, you should always confirm the completion of a transaction. Sometimes, you might assume that a transaction did not complete, and you re-enter it only to invest double and lose money.

Wrapping up

Stock trading in the Netherlands is a lucrative business. Fortunately, the nation has some of the best international online stock trading platforms in the world. One such platform is Saxo Bank that offers traders many incentives, trading tools, and flexibility to execute their trades from different devices. It is essential to learn the benefits and limitations of online stock trading before taking the leap.