Electronic traders route their buy and sell orders through

Electronic Communications Networks (ECNs). The watchword of

the electronic trader is speed, and speed is something you do not

have online. Online trading is for investors, not for traders, and for

this reason, do not even attempt to day trade online. Online trading

was not designed, nor was it ever intended, for day trading. Day

trading online is hazardous to your wealth. Let me walk you through

a typical online trading experience.

You opened your new online trading account a week ago and

you decide that today you will begin trading online. You turn on

your computer, and after the third attempt, you establish a good

Internet connection. As the data fills your screen you feel power, excitement, and anticipation. Like a modern-day land shark you

look for a trading opportunity. As you look at your charts you spot

a possible trade. With the click of your mouse you bring up your

order screen. You type in the price, the number of shares you want

to buy, and identify your order as a limit order by checking the box.

You are just about to hit the order button when you see the price

change. Do you change the limit order to a market order? All the

while time is ticking by. Finally, you decide to send a limit order, but

you have to change the price. You do this and hit the Buy button.

This cumbersome process took you over 15 seconds. Now that the

order has been sent, it will take another 10 seconds for the online

broker to receive and act on it. Two minutes later you see your price

trade across the screen. Your confirmations arrive by e-mail or by

phone. You wait and wait and wait, only to find out 20 minutes later

that your order remains unfilled due to fast market conditions. Feeling

frustrated and less empowered than 30 minutes ago, you vow to

give it another try. As you watch your screen, another opportunity

shows itself, and this time you send it as a market order. Two seconds

after you hit the Buy button the stock runs up. Online traders

do not have the ability to cancel their orders in seconds, with

almost instant confirmation, as electronic traders do. Fifteen minutes

later you receive an e-mail informing you that you bought the

stock at 3/8 of a point higher than when you entered the order, and

you decide to sell. You quickly enter another market order, only to

find out your order was filled X point lower. That afternoon the mail

arrives with your new account information, and the front of the

envelope says it all: "Welcome to Online Trading."

This example is not an exaggeration. Online trading lacks the

speed and technical sophistication necessary to successfully trade

intraday. It is possible to microtrend trade or invest online—but not

to day trade. Day trading is difficult enough as it is without handicapping

yourself by trying to trade online.

Electronic Communications Networks (ECNs). The watchword of

the electronic trader is speed, and speed is something you do not

have online. Online trading is for investors, not for traders, and for

this reason, do not even attempt to day trade online. Online trading

was not designed, nor was it ever intended, for day trading. Day

trading online is hazardous to your wealth. Let me walk you through

a typical online trading experience.

You opened your new online trading account a week ago and

you decide that today you will begin trading online. You turn on

your computer, and after the third attempt, you establish a good

Internet connection. As the data fills your screen you feel power, excitement, and anticipation. Like a modern-day land shark you

look for a trading opportunity. As you look at your charts you spot

a possible trade. With the click of your mouse you bring up your

order screen. You type in the price, the number of shares you want

to buy, and identify your order as a limit order by checking the box.

You are just about to hit the order button when you see the price

change. Do you change the limit order to a market order? All the

while time is ticking by. Finally, you decide to send a limit order, but

you have to change the price. You do this and hit the Buy button.

This cumbersome process took you over 15 seconds. Now that the

order has been sent, it will take another 10 seconds for the online

broker to receive and act on it. Two minutes later you see your price

trade across the screen. Your confirmations arrive by e-mail or by

phone. You wait and wait and wait, only to find out 20 minutes later

that your order remains unfilled due to fast market conditions. Feeling

frustrated and less empowered than 30 minutes ago, you vow to

give it another try. As you watch your screen, another opportunity

shows itself, and this time you send it as a market order. Two seconds

after you hit the Buy button the stock runs up. Online traders

do not have the ability to cancel their orders in seconds, with

almost instant confirmation, as electronic traders do. Fifteen minutes

later you receive an e-mail informing you that you bought the

stock at 3/8 of a point higher than when you entered the order, and

you decide to sell. You quickly enter another market order, only to

find out your order was filled X point lower. That afternoon the mail

arrives with your new account information, and the front of the

envelope says it all: "Welcome to Online Trading."

This example is not an exaggeration. Online trading lacks the

speed and technical sophistication necessary to successfully trade

intraday. It is possible to microtrend trade or invest online—but not

to day trade. Day trading is difficult enough as it is without handicapping

yourself by trying to trade online.