Scottrade is better than many brokers... but not the best and certainly not great in execution, which is the most important thing you need when trading stocks priced below $5. Their platform is "OK", but not great. It won't help you make money as much as the more professional brokers.
Every broker discourages Penny Stock Traders. None that I've ever seen advertise for Penny Stock traders. From the brokers point of view, most Penny Stock traders waste their time and close their accounts in less than a year..... most do so in months or weeks. Many amateurs don't bother reading & learning about trading. They don't take the time to read 6-12 books on trading, before they get started. Trading is 5% luck and 95% skill. Penny stocks are "story stocks". When you read the stories... it seems like you'd have to be an idiot not to invest in them. In reality stocks priced below $5 are in some form of major problem.... either within their industry, competition, capitalization, etc. Most are close to going out of business.
Good luck.
How does Trading Work? I can say you that take a look at this site ( http://forexsignal.kyma.info ) may be it can help you. It 's one of the best course about trading. It seems like Trading is almost totally based on Macro-economics. It also strikes me that since there are not nearly as many currencies as there are stocks/bonds/derivatives etc etc, there must be a large number of market players in each currency bracket. So logically, currencies must be very liquid true? Also, what is the risk of Currency trading, high or low? When I read the business section every day I notice that the Canadian loonie moves hardly a tenth of a cent on a regular basis (in comparison to the US dollar). So it seems like theres very little room for growth in currencies unless you leverage. On that note, whats the maximum leverage permitted for forex trading. I know in stocks its x2, and in derivatives its x10. Anyway the only way to know how to start a profitable buisness is by following some methods like the one that I suggested.
From Scottrade:
"Due to the volatile nature of Bulletin Board and Pink Sheet stocks, Scottrade's policy is not to accept market, stop-on-quote or stop-on-quote limit orders for these securities; only limit orders may be entered. Bulletin Board issues trade Over-the-Counter, but differently than NASDAQ stocks. These stocks do not meet NASDAQ criteria for capitalization or trading activity to be listed as NASDAQ issues. In addition, there are fewer market makers and the quotations are not absolute; they are indications. You may also notice the size and the bid and ask are usually less than those for other equities. For these reasons, there is less liquidity in these types of stocks. Market makers are not held to time and sales (they are not held to the quotes you see); trades are executed on a best-efforts basis. We understand that it is frustrating to receive an execution that does not relate to the price you see on time and sales; however, this is a function of market conditions, and not something Scottrade has the ability to change. Please keep in mind that there is a high level of inherent risk in trading Bulletin Board and Pink Sheet stocks."
In other words, you have to enter all trades for OCT BB stocks as a limit order - there's no market price. You can expect that the volume traded is erratic and the "ask" and "bid" prices are very far apart. So, if you want to buy a penny-stock say HHHX and the quotes are $0.02 bid and $0.05 ask - you would probably enter a limit order for 1000 HHHX at $0.025 or $0.03 and see if anyone is willing to sell at that price. You have no guarantee that you will find a seller at that price. If you foolishly entered a limit order at $0.05 a share, your order may be filled but the "bid" price may remain at $0.02 so you'd lose more than half your money if you sold immediately.
Go to the OTC BB website and do research on any stock you're interested in. Look at SEC filings of annual reports and see if the company has any revenue. Avoid any stock selling for less than $0.05 - and avoid any stock where the annual revenue is less than $1,000,000. About 99% of the stocks listed are garbage - and only traded by "pump and dump" people. Avoid reading any press release written for any penny stock - these are usually pure propaganda and will extol the stock as if it was pure gold. Again 99% of these stocks are evil, money traps preying on gullible investors.
I'd suggest you start by investing on real NASDAQ stocks that trade for over $5 or more. However, it's your money.
If a person has no knowldge and skills about Forex then it will be very difficult to trade in Forex. But if you use the right software you can make very good profit. The best software is called "autobinary signal". If you aren't a big expert this software is the only way to earn good money in Forex.
Hey so i know absolutely nothing about the stock market. i just turned 18 and opened a scottrade account. From what i've heard i think i'd like to trade penny stocks. Can someone explain how everything works? how to get started? how to determine what are good stocks to invest in? Just basically break everything down as simple as possible! Thanks
-i know absolutely nothing please help and make it simple! 10 points!
