One of the most common — if not the outright most common — questions I receive is, “How do I buy stocks on line? I think one of the most important ways to answer this is not with a direct answer but rather with a series of questions that helps the questioner understand the complexity and weight of that question.
In all likelihood, if someone is asking that question they are a novice to online investing. That can be a very precarious and vulnerable role to play these days, as these Internet waters are infested with fraud-perpetuating sharks. So come along with me as I examine what someone asking about how to buy stocks on line is really asking.
Read Buy Stocks On Line
The Motley Fool is one of the more long-standing and well-respected Internet resources for financial information and news. Simply put, if you’re even remotely interested in trading stocks regularly, you really should be reading it several times a week.
Just a couple days ago they published an article discussing penny stocks and
Read Buying Stocks Online – The Next Million Dollar Penny Stock
In this segment I will offer an abbreviated summary of the real penny stock trading process. Penny stock trading actually is not that challenging from a technical perspective, however you ought to consider a number of things before you begin chucking your money about.
The first step is to create a stock trading account with an online broker. You will find many online brokers from which to select. The most common online brokers happen to be E*TRADE, Scottrade, and TD Ameritrade, but this does not mean they are the finest brokers for every situation. Some contend that Zecco is the way to proceed for novice penny stock traders because Zecco is so inexpensive. Please read further in my penny stock broker article: Penny Stock Brokers.
Read How to Trade Penny Stocks
Be careful because penny stock fraud is frequent and pervasive. I don’t mean to scare you away from penny stock trading, however you need to realize that many unscrupulous individuals are out there eager to exploit newbies in this field.
The SEC (Securities and Exchange Commission) estimates that penny stock fraud costs the economy billions of dollars every year. As stocks not on the NYSE or NASDAQ often do not need to fulfill the same standards to trade within Pink Sheets or the OTCBB, they can be much more susceptible to being manipulated and falsified online.
While some microcap fraud may occur on the NASDAQ Small Cap Market, a vast majority of stock fraud occurs in the OTC Market. So proceed with caution and always do your due diligence when penny stock trading.
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