Choosing the best online penny broker is absolutely the key to long-term success by trading penny stocks. Your broker will play a major role in helping you find and execute micro-head stock transactions in a clear and accurate manner. But how do you determine who is the best online banking broker?
Different brokers for different traders
In all honesty, it’s not that easy because brokers and brokerage commissions are constantly changing and what you personally need to succeed with nano stocks or micro capitalizations can be very different from what another person requires. You should read my comprehensive review of over a dozen different online banking brokers. But for now, you need to understand how to choose the best online broker for his situation.
If you really know what you’re doing and have been studying micro head stocks for a while, you probably don’t want to lose a good percentage of your profits for brokerage commissions. But don’t just rely on this desire to be a housekeeper to make your decision.
If you are new to penny stock trading, you should consider paying more for a full service broker in the beginning. They can help you learn the ropes and develop good habits for trading nano-head stocks. Sometimes, the best online broker is not the one who can offer you the cheapest service, but the one who can guide you to good long-term habits. Services like Fidelity and Charles Schwab offer excellent complete online brokerage options.
Discount brokers for experienced traders
Then, maybe a few months below, you can connect to a discount broker like Zecco or E * Trade. They give you the functionality to trade with micro-capacity stocks without many of the research bells and whistles (although both services are growing and evolving, providing more and more research tools). Over time, you may be able to make money with these discount brokers simply because each transaction fee is 5-25% lower than what you might pay for a full service broker.
No matter who you choose, you absolutely must work with one of the best online stockbrokers. These brokers are connected to the latest information from Pink Sheets to OTCBB. They establish and maintain relationships with market makers and other third parties, which are simply not available to you.
But if you are new, again, do not save on stock brokers. Don’t let some tricky sales convince you that a newsletter or software “robot” will give you all the winning options and you just have to run them. This, friends, is snake oil.