Selecting the best online penny stock broker is absolutely essential to your long term success with penny stock trading. Your broker will play a major role in helping you find and execute micro cap stock trades in a clean and precise manner. But how do you determine who is the best online penny stock broker?
Different brokers for different traders
In all fairness, it just isn't that easy as brokers and brokerage fees are constantly changing and what you personally need to be successful with nano stocks or micro cap stocks can be very different from. what another person needs. You should read my full review of over a dozen online stock brokers. But for now, you need to understand how one goes about selecting the best online broker for their situation.
If you really know what you're doing and have been studying micro-cap stocks for a while, you probably don't want to lose a good percentage of your profits to brokerage fees. But don't just rely on this desire to be thrifty to make your decision.
If you are new to penny stock trading, you should really consider paying a bit more for a full service broker at the start. They can help you learn the ropes and develop good habits for trading nano-cap stocks. Sometimes the best online broker is not the one who can give you the cheapest service, but the one who can guide you towards good habits for the long haul. Services like Fidelity and Charles Schwab offer great online brokerage options.
Discount brokers for experienced traders
Then, maybe a few months later, you will be able to log into a discount broker like Zecco or E * Trade. These give you the functionality to execute your micro-cap stock trades without a lot of research bells and whistles (although both services are growing and evolving, providing more and more research tools). Over time, you could make a lot of money with these discount brokers just because each transaction fee is 5-25% less 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 stock brokers. These brokers are connected to the latest information from the Pink Sheets at the OTCBB. They build and maintain relationships with other third party market makers who are simply not available to you.
But if you're new, again, don't skimp on slot brokers. Don't let a sneaky sales pitch convince you that a newsletter or software "bot" will give you all of the winning choices and you just have to execute them. That, my friends, is snake oil.