foremost feature to check is share limitations. With penny stocks you will be purchasing as many as a
million shares or more at a time. A half a penny extra per share over say 1000 shares doesn't sound like
much, but a million shares will cost you an extra 5000 dollars, and that’s just to get in. Most brokers that
offer no share limitations typically charge a tiny bit more per trade, but it is definitely worth the cost.
At the present time, there is no need for the average day trader to spend tons of money on software.
The next necessity is to have a good trading platform. Most online brokerage firms offer perfectly sufficient
real-time, streaming customizable charts, watch lists, time and sales, some screening ability and the all
important level II for free as long as you’re an active trader. It may appear as though you have to trade
heavily for a quarter or so to get all of the features, but most of the time if you call and tell them that you’re
an active trader they will let you install right away for free, or at least a nominal fee. This goes hand in hand
with trade minimums. Do not be too concerned with how many trades you make a month to save a few
bucks, as long as you get the software.
It seems that if you could find a broker with an advanced trading platform, no share limitations, free limit
orders and a reasonable trade minimum per month, all for around ten dollars per trade you would be pretty
lucky, right? Actually there are tons of them out there, just look around and you will definitely find what you’
re looking for. When looking at price, be sure to look at extra charges for limit orders. We always
recommend using limit orders and in most cases penny stocks cannot be traded without them. Limit
orders generally cost 5-10 bucks extra per trade but some online brokers offer free limit and stop orders.
Overall, please do not pay more than 15 dollars per trade.
Don't forget about the extra cost's involved with trading. There are several costs to consider when
trading stocks in general other than just a commission. Fee's from Your Internet Service Provider may
already be factored into your household or workplace expenses, however, do not forget about an extra
phone line in the case of Dial Up. You do not need to have the best and latest computer system, however,
something from this decade would definitely help. Consider the ease and convenience of having multiple
monitors or even an additional laptop with a WiFi connection, although these items are not at all essential.
You may also want to invest in a back up power system for your computer, in case the power ever goes out
in the middle of a trade. An item that one does not want to skimp on is virus and spyware/adware removal
software, and that you scan your computer(s) often. Even the most harmless intrusion on your computer
could slow it down causing you to lose precious seconds when executing a trade and could potentially cost
a lot more than the price of the Anti-Virus software. Despite these extra costs, trading stocks is still one of
the cheapest and most viable options for managing your own investment account.
Having a high speed connection is preferred, but not essential. Having a T-3, BPL, Broadband, DSL,
or Satelite Internet connection can be a great thing, but not necessarily for trading. Even if you cannot get
access to or afford high speed, a standard phone can be just as good. Java technology allows you to
receive streaming real time quotes and data through your trading platform, and a phone line may only slow
it down by a few milliseconds. One thing you may want to consider with a phone line is a second provider
as a back up in case you get timed out. You can purchase equipment that will automatically switch from
one provider to another in case of a disconnection, and your system will never skip a beat. Also, news and
Sec fillings can take quite a few extra seconds to load on a dial up connection. You may want to install
some Dial-Up accelerater software that may be provided from your ISP. This technology will sacrifice
picture quality to load web pages a lot faster, and text rich documents will come in almost as fast as
broadband. Overall, the speed of your Internet connection is probably one of the least things you need to
be concerned with.
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