Stock Trading API: Tips and Tricks of Online Stock Trading

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Online stock trading can be a very murky subject that could haunt first time traders if they do not know where to look. Wading into the complexities of investment types and strategies head first into a deep dive usually ends up with a very discouraging outcome. However, if you know how to look, there is a bounty of information available for you. There are also a lot of ways that you could participate in stock trading wherein you would be able to highlight your strengths. For instance, as an IT professional, I am familiar with handling data through APIs or Application Programming Interfaces. Thus, I could try to get help from one of the more prominent Stock Trading API by creating my own automated stock trading strategy. In this article, we will talk about the tips and tricks that can get you started in stock trading.

Stock Trading API: Choose your Broker Properly

Before beginning your journey into online stock trading, you need to carefully choose which stock broker you will partner with. You need to understand you own personal style and come up with a strategy that you are comfortable with. When all is set, you can choose what kind of broker would fit your requirements. Choosing a broker is like choosing what dress to wear. Know your size, the event you are going to and alternatives that you have in your closet.

The first thing you want to look at in a brokerage firm is the kinds of services they offer. Make sure that these are the services that would actually be useful to you. And once you have shortlisted the firms, choose the ones that offers the lowest rates on the services that you are most likely to use frequently.

Finding out which firm offers the least cost to do transactions with them might not be the easiest question to ask. Firms rates vary on selling, buying, and holding of securities and stocks. Beside this, other costs that you will incur with your business with them will severely vary like for instance, margin interests, other charges, and of course, the commissions. The best way to go about this is, probably, to ask weathered online stock traders about their experiences with various brokerage firms they had business with.

Finally, there are plenty of resources available online that gives an outline of the costs of various firms. Make sure to put your brokerage firm to the test first before putting your hard earned money into their hands.

Stock Trading API: Types of Trades

Now that you have a brokerage firm to partner with, you are ready to buy investments. The next step is figuring out which ones to buy and how to trade them. Generally, the kinds that you can buy include bonds, stocks, exchange-traded funds, and mutual funds. Before proceeding, however, you have to put into heart the basics of trading. Some mistakes that were done by rookies who dived into investing cost them a lot of money they can never take back.There could be some terms along the way which could introduce a bit of confusion. But it is wise to remember that these terms are only there to make it easier for everyone involved. Finally, not everyone has to deal with each kind of trade but as with any game you play, it is always better to know what your options are.

Stock Trading API: Types of Trades – Market Order

The easiest to understand type of stock trade which most people frequently buy is the market order. Basically, the broker is told to buy the investment whatever its price is. Since these are quite straightforward transactions, brokers will normally not charge much given that it will not be time consuming and will also not make use of their skills as brokers.

Stock Trading API: Types of Trades – Limit Order

Another basic form of transaction that you can request from you broker is the limit order. Unlike the market order where no special condition needs to be met before you buy or sell your investment, the limit order puts either maximum price limit for buying or minimum price limit for selling. Because of this, the broker may or may not execute the order as the current prices may go against the limits that you have set.

This is also a common order that most seasoned traders use to have a certain warranty on their investments. However, there are a lot of ways that it could still go wrong. For instance, the prices that you have set may never be reached so your investment would fail to increase in value as a result. Another common concern is that limit orders are susceptible to sudden spikes or sudden dives in stock prices. If, for example, a certain stock dives in value which triggers the limit order to sell the stock, but what was not expected was how quickly the stock rose back up. In this scenario, you could be looking at losses that you could have easily prevented.

As long as it is carefully managed, limit orders can be a stock trader’s default trading option. Most would recommend that you put this in any trade to protect yourself from total loss.

Stock Trading API: Types of Trades – All or None

Normally if you request your broker to buy a bigger quantity of stocks from a single company, they would do it in multiple transactions. There is a reason for this so as large purchases may cause unforecasted fluctuations in the prices of stocks. But, if you are decided into buying the stock in one go, then you can tell the broker to buy all-or-none. This means that you prefer not to buy any stocks if the stock can only be bought through a sequence of transactions. 

The trouble for this kind of order is that some transactions can have a little chance of pushing through. This is because the stock itself may not be offered at the quantities you prefer anytime soon.