What’s more important than hot stocks? {Getting the} right mindset, strategy, and tools.
{So when} it {involves} tools, {your web} broker {could be a} key asset … or your worst enemy.
{Believe me}. I’ve learned from experience.
Choosing an online broker {for the} investment strategy should {devote some time}. Evaluate {your alternatives}, {think about your} trading strategy, and don’t {hesitate} to ask questions. In the financial industry, every tool {you utilize} should {help to make} {you are feeling} comfortable and secure .
When you’re {each day} trader, {the proper} penny stock broker {will help you} maximize every trade, both {after and during} market hours. Before you {decide}, you’ll {desire to} {search for} several key indicators, which I’ll describe below.
{You could also} consider {establishing} accounts with my preferred traders. {In the event that you} don’t have a frame of reference, {you then} won’t know whether you’re {utilizing the} right online broker {for you personally}.
Let’s dig {in to the} strategy between choosing an online broker for penny stock day trades.
Table of Contents
{Exactly what is a} Penny Stock Online Broker?
{A cent} stock broker {can be an} online broker who facilitates the trading of {very cheap stocks} – {also known as} over-the-counter stocks, or OTC. {Very cheap stocks} are stocks that trade at $5 or less per share, so they’re not high-profile or high-revenue companies.
This doesn’t mean you can’t {earn money} with pennystocking. I’m living proof. I turned {a short} investment of just over $12,000 into profits of nearly $5 million, primarily through penny stock trading**.
Penny stock online brokers {need you to} {create a} minimum investment, which varies between them. Typically, though, the minimums prove {lower} than {in the event that you} planned to trade on the major stock exchanges – or {in the event that you} {wished to} trade on margin, {that i} never recommend.
Anyone who {lets you know} that online brokers require minimums of $10,000 or $20,000 is lying. {In case you have|For those who have|When you have|Should you have} $500 {to get}, you’re likely {all set}.
Investment and Trading Companies
The securities industry is highly diverse. Everyone has different strategies, goals, and {regions of} expertise .
As {it’s likely you have} gleaned {out of this} site, I {concentrate on} small-cap companies. {I wish to} trade quickly and take profits wherever {I could}.
An online broker {might have} specialties, too. {For example}, some focus primarily on long-term investment strategies. Their clients hold investments for months, years, {as well as} decades before selling and taking their profits. {For the time being}, {they often times} get dividends.
That’s not my bag. Instead, I day trade {very cheap stocks} and small-cap stocks. I’ve executed trades that lasted only minutes, though I occasionally hold stock overnight or for longer {intervals} {predicated on} my research.
If you’re {thinking about} {daytrading} versus investing, you’ll want an online broker that {focuses on} {daytrading}.
{WHAT EXACTLY ARE} Some Top Online Stock Brokers {for novices}?
You’ll {desire to} {use} an online stock broker {that will help} you learn {the right path} {round the} process. {For novices}, some are {much better than} others .
Joining my Trading Challenge {might help} you get {the feet} wet and learn faster, but I still recommend several companies {which have} proven their worth for newbies in {daytrading}.
{Listed below are} four of my top recommendations. Check them out {on your own} {to look for the} best solution {for the} specific needs.
StocksToTrade
Before I {discuss} traditional online brokers, {I wish to} share {the advantages of} getting {up to speed} with StocksToTrade. It’s {an unbelievable} platform that {explains} {how exactly to} trade stocks in a low-stress, high-data environment.
It’s {no} online broker – {at the very least}, not yet – {nonetheless it} {lets you} try paper trading, filter copious {levels of} market data, isolate the stocks {that may} make big movements {soon}, {and much more}.
Many new stock traders get overwhelmed {since they} {need to get} their information from numerous sources. It’s confusing and frustrating … {also it} eats up {a huge amount of} {your time and effort}.
StocksToTrade combines {those} utilities – from live webinars at market open and {near} paper trading and stocks {to view}. The filters are highly adaptable, {in order to} adjust your {using} the platform to {your unique} trading strategy.
TD Ameritrade
I’ve used TD Ameritrade and know {many individuals} who {utilize it} consistently. It’s {probably one of the most|perhaps one of the most} well-known online brokers {on the planet}, {gives} it some immediate credibility.
TD Ameritrade isn’t {ideal for} shorting, but it’s {a good} broker. {I understand} many people {who’ve} one E-Trade account {and something} TD Ameritrade account, {this means} they {obtain the} best of both worlds. {It is possible to} short sell using E-Trade and use TD Ameritrade primarily for buying.
There aren’t any subscription or platform fees with TD Ameritrade, {that is} one great {feature}. There’s also no minimum cash deposit {to generate} {a merchant account}.
E-Trade
Both TD Ameritrade and E-Trade have commission fees of $6.95 per trade ({during} this writing). They’re also similar {with regards to} content and interface, though {I favor} E-Trade. {Actually}, I {more often than not} have an E-Trade account open for trading {small amounts} of money.
Interactive Brokers
{You may be} {thinking about} Interactive Brokers {if you wish to} trade on margin (again, {that i} don’t recommend) or {if you wish to} {utilize a} company {which has} {a great deal of} assets. {The business} {takes a} $10,000 minimum deposit {to start out} trading, {and you also} must keep a balance of $2,000 in your trading account.
{How exactly to} {Decide on a} Penny Stock Broker
{Back} {your day}, individual traders {as if you} and me were {confronted with} {hardly any} broker options. Most stockbrokers were full-service brokers. {You’d} to call them {each and every time|each time} you {wished to} {create a} trade and pay a hefty premium {for his or her|because of their} time.
Fortunately, the landscape looks much different now …
You have {plenty of} online brokers {to choose from}, and most {enable you to} make trades without {picking right up} a phone. That’s {a very important thing}, {particularly when} it {involves} commissions.
What Do You Need to Look At?
If you’re {thinking about} working with {a cent} stock broker, {there are many} considerations that deserve your attention. {What realy works} for me {may not} {do the job}, so I’ll cover each category {completely} {to assist you} make {the best} decision {predicated on} your trading strategy.
Trading Costs
Not once have I ever cared {concerning the} commissions that E-Trade or Interactive Brokers have charged me. {EASILY} focus on {the proper} trades, the commissions are negligible.
{You merely} {need to be} choosier {together with your} trades.
{I understand} that {you imagine} {you need to} trade {each day}, {nevertheless, you} don’t. If there’s {not just a} great supernova, or if there’s {not just a} huge volatile stock, or if there’s {not just a} stock {you could} make 20, 30, or 50 percent on, don’t trade .
The commissions {can in fact} be a {positive thing} {to assist you} avoid over-trading!
{That is} no {unique of} the pattern {daytrading} (PDT) rule, which {lots of people} hate, Even I hated it {initially}. When I first got started teaching, I was like, “{Seriously}, let everybody trade.” Now I {observe how} many newbies over-trade. The PDT rule {can help you} {cut back}.
Still, you don’t {desire to} use an online broker {that may|which will} charge you {a lot more than} the competition. {This is also true} {with regards to} hidden fees.
{Learn} {how much} {your web} trading broker will charge and for what.
Trading Tools
The top online broker platforms provide handy tools to help you make smart trades. For instance, E-Trade offers fantastic information for people who are new to trading. There’s also an extensive knowledge base, information on investing trends, market news, and more.
{Needless to say}, if you’re a StocksToTrade member, you don’t need {all those} extras. {You obtain} them {in a single} place, {and you may} use {your web} broker exclusively to execute trades.
Investment Products
{Additionally you} want to {think about the} trading products {where} you’re interested. Obviously, {if you wish to} trade {very cheap stocks}, {you will need a} broker {which allows} you to {achieve this}. {You could also} {be thinking about} commodities, ETFs, FOREX, {along with other} investment opportunities.
Legitimate online brokers {let you know} exactly what {forms of} investment products {they provide} . E-Trade, {for example}, {lets you} {spend money on} options, futures, mutual funds, bonds, {and much more}. The same {applies to} TD Ameritrade.
Mobile Trading
I don’t {find out about} you, but I don’t like being stuck behind {some type of computer} {all day long}. While {I love} the laptop lifestyle, sometimes {I wish to} {take with you} something smaller. That’s why online brokers {offering} mobile trading {could be} awesome.
{It is possible to} usually download an app that mimics {the web} dashboard. Execute trades while you’re {on the run}, and don’t {be worried about} having to {create a} phone call {once you} suddenly realize your investment {has had} a turn for the worse.
Mobile trading offers other benefits, too, {such as for example} receiving mobile alerts about your account. You don’t {need to} keep checking constantly {once you learn} your device {enables you to} know {whenever your} account needs your attention.
{CUSTOMER SUPPORT}
Diversity matters {with regards to} {customer support}. I don’t like dialing 800 numbers and {looking forward to} {you to definitely} answer {the decision}. Instead, {I wish to} {have the ability to} shoot off {a contact}, {take part in} live chat, or text my online broker {in regards to a} problem.
{Search for} brokers {offering} multiple lines of communication . {The very best} ones {likewise have} knowledge bases or help centers {to purchase} the answers to {faqs}. {I} consult those before {calling} {an organization} because I don’t {desire to} waste their time or mine.
Stock Analysis
Some companies charge for stock analysis {along with other} services via their platforms, {while some} {usually do not}. If you’re a StockToTrade member, you don’t {have to} worry about {this aspect}. However, {if you’d like} {usage of} stock analysis tools {during your} online broker, {check up on} that before you {join} {a merchant account}.
{This} matters less when you’re primarily trading {very cheap stocks}, because most online brokers don’t offer detailed {information regarding} the companies {in it}. Their analysts focus more on blue-chip and large-cap stocks instead.
Regulation
{You can find} two {forms of} regulations: Those {established} by governing bodies {and the ones} {your web} broker creates. {You should be} {alert to} both {of these}.
{Certainly}, {you will need} an online broker that follows FINRA guidelines to the letter . {The business} should be {ready to} enforce securities regulations consistently {also to} monitor {makes up about} any infractions.
Most online brokers have systems {set up} {to help keep} traders honest. {For example}, they issue violations {whenever a} cash-account trader doesn’t have sufficient liquidity to cover a trade {or elsewhere} {requires a} position that violates government or broker rules.
{In the event that you} {get a} violation, {it’s likely you have} your account limited, cancelled, or restricted. {Make certain} you’re {alert to} {the guidelines} and regulations {before starting} to trade.
Banking Services
{I understand} {plenty of} investors who {would rather} bank {making use of their} brokers. {They are able to} easily shift cash between different accounts – and with {very cheap stocks}, minutes can matter {once you} {visit a} potentially lucrative trade opportunity .
Account Security
From two-stage authentication and data encryption to fraud protection and firewalls, {you intend to} know that {the amount of money} you invest {having an} online broker {will stay} safe. Checking online reviews and inquiring about specific security setups {not merely} puts {your brain} {relaxed}, but {may also} {assist you to} trade with greater confidence.
Order Execution
Speed of execution matters, too – especially with pennystocking. {You should be} {in a position to} act immediately {if you opt to} buy or short a stock. {Nowadays}, most reputable online brokers have execution guarantees.
{For example}, E-Trade currently {includes a} two-second guarantee {so long as} the trade meets specific criteria. It doesn’t {connect with} {very cheap stocks} trading {for under} $1, but {almost every other} scenarios {ought to be} covered.
International Trading
Some online brokers permit international trading, {while some} don’t. {For example}, Interactive Brokers {lets you} trade internationally on the {currency markets}, American Depositary Receipts, ETFs, and mutual funds, while while E-Trade doesn’t permit international {currency markets} trading.
Key {Strategies for} Choosing an Online Broker
When you’re choosing an online broker, {you can find} two key tips {I’d like} you to {remember}. They’re total deal-breakers, {for me} – so take them seriously .
Know the Broker {and its own} {Conditions and terms}
Online brokers change their {conditions and terms} {on a regular basis}. {In addition they} change fee structures, rules, {along with other} {areas of} online trading. If you’re not diligent about research, {you can get} burned .
Don’t Let Anyone Trade {for you personally}
You’ll never {learn to} trade {very cheap stocks} {in the event that you} let {another person} make your decisions or execute your trades. Practice makes almost perfect. {Concentrate on} expanding your education on the {currency markets} and making {your personal} decisions .
{UNDERNEATH} Line
Choosing an online broker {is really a} personal process. You’ll {find out} {what you would like} out of {a brokerage} as you trade with different companies and compare their interfaces.
{You may} choose one over another {due to the} {simple} execution or {as you} read {plenty of} favorable online reviews. However, there’s no {replacement for} experience.
I’ve tried {a lot more than} 100 different trading {software packages} and online brokerage tools {over time}. StocksToTrade {may be the} most comprehensive {with regards to} education, whether you’re {looking into} potential stock picks, {participating in} paper trading, or researching companies.
E-Trade, TD Ameritrade, and Interactive Brokers all offer several {advantages of} those who {desire to} trade {very cheap stocks}. I recommend {looking into} {all of them} in depth {prior to making} {your choice}.
I also recommend joining my Trading Challenge. It’s {among the} top {methods for getting} {an instant} education in the {currency markets} {also to} follow {a number of the} leaders in this industry. I’m always sharing my trades, producing new webinars, and providing advice and feedback.
{You won’t ever} know … {you may be} my next success story .