If you want make extra money, you should learn how to trade penny stocks online. The good news is that it is relatively easy trading penny stocks in the web. You just need to open your own trading account, research and study stocks, and then place your trades based on your requirements. Your trades will be executed as soon as they convene to your required position during trading hours.
Trading Account
Open a trading account for the stock market online. It is very easy to accomplish and only necessitates a minimum deposit ranging from $500 to $2500 depending on the type of account and brokerage services that you apply for.
It is most beneficial to open a margin account with a highly regarded broker. This account will grant you with much more flexibility than what cash accounts will furnish you. With a cash account, you will need to wait for about three days within trades for your sell or buy penny stocks order to “settle”. Even if have no plans of using the margin, it’s favorable to open a margin account.
We recommend Scottrade for your penny stock broker account. Scottrade is an excellent choice for beginners, those who invest in mutual funds, and long-term (buy and hold) investors (mainly because of no account inactivity charges). Because Scottrade is a stable, seasoned brokerage firm with a good reputation, it is the natural choice for people who don’t trust their money with newer companies but also don’t want to pay $10+ for trades with other established brokers. [ Open an account with Scottrade today ]
Learning How to Trade
To understand how to trade penny stocks, you can take advantage of free online trading tutorials and courses. For the most part, penny stocks are traded in a similar manner other stocks are being traded, by placing a purchase or sell order for the stock on your trading account. The distinction is apparent on the price of the stock, hence the term “penny”.
Penny stocks do not move as much as other stocks do, thus it’s critical to pay attention to the movement as well as volume in the stock. For best results, do not place more than 20% of your investment portfolio in single stock. Leave 20% of cash at all times. You can learn about the stock market basics and how to trade correctly.
Studying the Stock Market
It’s important to study a stock before making a purchase. You can seek the assistance of an online mentor who can help you select the best penny stocks in the market. In addition, you can check several websites online that can aid in recognizing signals and following stock trends.
You can put orders for penny stocks with limit, stop or market orders for you to obtain the price you are anticipating. If you are in doubt, the most proficient step to take is to ask questions. Your stockbroker will be more than willing to answer inquiries you have in mind.
To come up with advantageous trading decisions, get a stock trading software package. The software will explore the market, analyze the stocks, and give you a hint on stocks that are projected to move next.
Online Support
You can find a group or community of people that can walk you through the entire process of how to trade penny stocks and will also inform you about their daily stock picks. It is very constructive for them to alert you about their picks. This is because when a stock moves in the direction that they have expected, the more investors or traders will buy or sell that day, resulting to higher chances of stocks moving in the preferred direction rapidly.
