General Information

Shares trade witnessed tremendous growth over the Internet in the past few years by expanding the use of the Web; the number of investors in this sector around the world, 5 million people by the end of 2004, as have many of the stock exchanges in the Arab and foreign countries to provide the mechanisms for online trading of shares International segment to attract new investors, were not present before the stock market arena.

However, there are challenges to trade in shares across the web, and often the lives of the investor; either to circumstances beyond his control, such as: exposure to the electronic trading system defect, or a sudden failure, or a lack of safety at the sites of banks or brokerage firms (brokers), which provide service electronic trading of shares to investors, or the lack of investor the same basic rules for investment; which exposed him to a real loss.

Hence, questions arise about the possibility of the reliability of the system of electronic trading of shares through the Internet, and the face of the dangers of this type of circulation, and rapid process and alternatives that could be provided by banks and brokerage firms, if the failure of the trading system via the Internet in the management of selling and purchasing operations .

To avoid losses

Therefore, the financial experts in this area believe that the investor is not in the ten errors in the electronic trading on the Internet in order to avoid losses; namely:

1 - Adoption of the investor on the Internet completely in the process of circulation, and may not be available when needed it; due to the interruption of communication lines, or a defect in the organs of the mediator, and here the investor must ensure that they have an alternative means of buying and selling through other methods when needed.

In this context, a trader with one of "mediation" in the United States of America: - The companies often provide respectable alternatives to the completion of the sale and purchase in the event of network failure, or inability of the investor access to the Internet, including the provision of the so-called b "CooL Center" or contact points that receive direct instructions or requests by telephone and carried out by the investor directly, in addition to other alternatives, sending faxes. Rather, it refers to the fact that some American companies have the brokerage commission if the proportion of the delay in the implementation of a purchase or sale of the shares at the market for a period of one minute; demonstrates the extent to which firms in an attempt to maintain the customers through affordable errors that may arise, and is not for investor by them.

2 - the site of a lack of a brokerage company for safety both in the circulation of information or complete transactions through the site; must therefore ensure that the medium of communication is through a secure, through the use of the browser has the ability to communicate with the safe, and make sure that the mediator provides a safe service.


The large number of intermediaries

3 - the large number of electronic brokers, which makes the process of selection of the mediator and the follow-up by the regulatory bodies is very difficult than before.

Here, the investor in equities across the web to make sure of the fact that the broker will deal with in terms of credibility, transparency and integrity of the implementation of those orders, must be the broker of global brokerage houses, which are known to be of good reputation; In some cases, brokers and there are ghost, all their is the web site, and what prices they give and also be a placebo.

Here, the customer may be subjected to the process of fraud, and discovered that the broker told him to reveal the electronic account at that time less the result of calculation of the loss suffered by the depletion of the account even after 3 days of opening the latest, and send the balance sheet so they look a logical process, and committed themselves to the rules of the broker work, the client and the most serious loss to; placebo broker can even convince some new victims to join him so that he can blackmail and the seizure of their money.

4 - there is a way for the fraud must have noticed the investor, known as the "road hierarchy", which depends on the cooperation of a large number of people in the broadcast information or to collect a certain amount, and should be avoided.

Through this point of view investors should be wary of the information transmitted by the many many online forums, and do not forget to highlight the problems of the Internet lies in the many sources of information, and therefore difficult to assess the credibility of what appears on the screen of information.

The investor must not forget that some writers have used the Internet forums to promote the shares, the decision or recommendation to buy or sell; either self-interest, enthusiasm or not supported by experience or science. The economists here, the importance of the motives of the decisions of buying and selling shares based on the read and aware of market data, and a technical analysis of the methods that govern the performance of the stock market.

Therefore, investors must not forget the three golden rules of investment:

The first: to know what to buy or sell?

Second: to know on what basis is to buy or sell stocks.

The third rule is that the known and determined by the level of risk.

The temptation to rush profit

5 - speed up the possibility of error or the introduction of investor buying and selling orders, which does not assume responsibility towards the lowest median. Often the result of surprise, the error quickly and the movement of the stock market's sudden activity; because the market is changing rapidly is very high, and we must take the necessary reserves in order not to pay the investor more than it had intended to, or more of the contents of his.

Can avoid the circulation of a pilot at the outset through a portfolio (Portfolio) and the imaginary can be pursued through the Internet to learn how to move the stock and its impact on equity in the proposed portfolio, and should work a deal will be halted, and the completion of the speculation in the event of adverse market trends.

6 - There are attractive offers to enter into certain investments of those who claim their access to revenues, however, reasonable, and that the investor must be avoided. In this regard, the investor diversification and investment vehicles; so as not to depend on the person to leave the capital in a small number of companies, and not dependent on one sector in particular.

Also preferred in general not be speculative (sales and purchases) using the capital in full, rather than by a 10%; so that the rest of the capital as an insurance market trends reverse, is to enter the full capital of gambling.

It is wrong that each owner in the shares of one company; because the loss of the company or its share prices fall in the market for whatever reason may go all or any part of the owner; but you have to choose good stocks of companies in the market, and tried to contribute to the classification of companies into three categories (large, medium , small), depending on the total market value for their shares, and then you focus on the best medium-sized companies because of companies beyond the stage of incorporation, and growth has been rising, and profits in the most stable and semi-confirmed.

Not without risk grounds

7 - did not fully trust in the software designed for the analysis of market trends, particularly as the stock market is sensitive, and improve their use in the event that employ only as information to assist legibility. You are here to learn how to examine the financial situation and legal status of companies before they contribute to progress on the purchase of shares, and to do so, you analyze the two important aspects:

I: technical analysis of shares, and trading volume, and track the movement of stock prices during a specified period, the index tracking stock, and compared to the index of shares, and the demand for purchase in the market.

II: analysis of the company fundamentalist signed by your choice, in terms of property, production, sales and profits through a number of years, as well as the market value of the shares of the company, and the strength of its rival in the market, and the Governing Council, and the quality of decisions it made.

8 - Some equity investors look to the margin, do not know the risks involved in this matter. In the volatile market, find an investor who bought the sidelines of an initial payment of shares is the same, calling for additional money to provide the margin of maintenance, if the share price fell after that, and if money were not paid when required; the commission, the company has the right to sell securities, the investor bears the loss.

9 - imitating the way some of the professional traders, risk, and prefer to look at the stock market for investment and not for circulation only; Kaltdol day-to-day operations include high-risk, and so the investor must be able to bear the loss, and should preferably be long-term investment and not for minutes or hours.

10 - wrong when the investor thinks that there is a system protected both in the local banks in the system or the state on the financial market, when other investments is manipulated, if what has been paid to the occurrence of errors in one of the previous nine; is not expected to punish the Capital Market Authority, causing the error.

There may be a different opinion of the capital market a major role in the maintenance of investor funds as long as it was signed in default by the brokerage firms, and mechanisms of the free market model is also a deterrent to the work of companies, especially in light of the proliferation of many alternatives to the investor to choose a mediator who wishes to deal with him.