How to open a Penny Stock Brokerage Account
During the housing crash of 2009, Investors really began to question the outcome of their stakes in the market. Just over half a decade later, with the new election of President Donald. J Trump, the Dow Jones actually peaked at levels unprecedented in the market. If there’s a lesson to be learned here by first-time investors, It is that patience and knowledge will be the key to your long-term success. Those focused on short-term, high-risk opportunity have consistently turned to a penny stock account in order to take a chance at investing small sums in the hopes of reaping large gains.
That being said, stocks have been returning a constant average of 10 percent every year, so what are you waiting for?! Here is the beginners guide on how to open a brokerage account:
Step 1: Know your needs and do your homework!
The first and key step in opening any type of penny stock trading account is to determine what your investment goals and needs are. One of the first decisions you will be making is whether you want to work with a full service or a discount penny stock broker, the trade-off here is ultimately the availability of the brokers for client-contact which obviously comes with a price-tag. Based on your level of comfort and knowledge, you can decide the level of broker oversight/input you wish to have on your portfolio.
Step 2: Pick an online brokerage account and set it up.
There is a countless variety of different online penny stock brokerages for you to select from based on their minimum deposit accounts and commission fees. (If you wish to see how fees add up over time you can use the SEC calculator). Personally, I use Think or Swim by TD, because of their easy user interface as well as the low commission fees they use for trade. The beauty of TD is that they allow you to create paper-trade accounts for free, allowing you to play with the market until you decide to begin using actual cash.
Step 3: Talk to a representative – what good is a trading account if you don’t know how to use it?
After selecting your online broker, make sure to call one of the customer service representatives to walk you through the process on how to use the application. If you prefer video-walkthroughs, YouTube is an endless archive of tutorial videos for whichever brokerage you wish to select.
Step 4: Downloading a Full trading platform
Most online brokers have their own full trading platforms. The importance of this is the ready availability of Level 2 Quotes. Level 2 grants you access to real-time data about any listed stock, specifically the amount of people who are trying to buy or sell the stock at any given time or price. The platforms also give you access to “time and sales” data showing you the time, price and amount for every executed trade.