Lesson #5:

Setting Up A Stock Trading Account

Penny stock trading is easy and relatively inexpensive; you just need to set up a stock trading account with an online broker.

Many online brokers offer flat fees for trading penny stocks, which is important, since penny stock trades can involve hundreds of thousands and even millions of shares.  Online brokers offer trading platforms that make it easy to initiate penny stock trades, track penny stock positions that are being held, and sell penny stocks when the time comes to exit a trade.  They also offer many useful trading and research tools, the most important of which is real-time Level II Quotes, which we will discuss in more detail shortly.

It is important to select the proper online broker that fits well with the amount of penny stock trading that you intend on doing.  For casual penny stock traders, the well-known online brokers, such as E-Trade, TD Ameritrade, and Scottrade, are generally suitable.  These well known online brokers offer easy to use trading platforms for reasonable fees.  However, for more active traders, lesser-known online brokers that cater to frequent traders may be a better option, as they provide trades for lower costs and also more complex trading tools that active traders may find useful when executing numerous penny stock trades.

To set up a stock trading account, you need to meet the online broker’s minimum account balance requirement, which can vary, but is usually a couple of thousand dollars.  You then fill out an online form to provide them with your information and transmit payment to them to fund the account.  For more complex accounts, such as margin accounts, you will have to provide additional information and may have to wait longer for the account to be approved.

Once your account has been approved and funded, you can log in and start trading penny stocks.  However, it is a good idea to trade lightly at first or just do “paper trades” (pretend trades without real money) to ensure you do not blow your trading account balance while learning how to trade.

Lesson #2:

Finding Penny Stocks

Lesson #3:

Fundamental Analysis - Performing Due Diligence on Penny Stocks

Lesson #4:

Successful Penny Stock Trading
Strategies

Lesson #5:

Setting Up a Stock Trading
Account

Lesson #6:

Understanding Level II Quotes

Lesson #7:

Placing a Trade

Lesson #8:

Chart Setups

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