| > | | | | The basics of trading consist of buy orders and sell |
| In addition to money, you need a broker in order to | | | | orders. The most important thing about issuing a buy |
| play the penny stock trading game. Learn exactly | | | | order is to make sure you have the money in your |
| how they operate and what rules they follow. Just | | | | account to cover not only the order but also the |
| because you are paying a commission doesn't mean | | | | transaction fees. There are essentially five things that |
| that they will always have your best interests in | | | | must be included in the buy order: |
| mind. | | | | 1) The ticker symbol.2) The market where the stock |
| In addition to money, you need a broker in order to | | | | is being traded.3) The number of shares you wish to |
| play the penny stock trading game. Your broker will | | | | buy.4) The price you are willing to pay (if you do not |
| be your lifeline as well as the person that you have | | | | specify a price the purchase order will be made at |
| allowed the privilege of buying and selling stocks on | | | | the available asking price - this is not |
| your behalf. He or she will create an account into | | | | recommended).5) The amount of time you want |
| which you will deposit money. This account works | | | | your offer to stand. |
| very much like a bank account with the added | | | | Sell orders are very much the opposite of buy |
| benefit of containing stocks and bonds as well. The | | | | orders. You state that you wish to sell your stock, |
| proceeds from sales of stock will go into this account | | | | the price you wish to receive, and the ticker symbol, |
| and the money to purchase new stocks will be taken | | | | the exchange, and the amount of time you'd like |
| from this account. | | | | your offer to stand. |
| There are two types of brokers full service brokers | | | | Investors often enter a bid price when buying stocks |
| and discount brokers. Full service brokers offer | | | | and an ask price when selling. If your bid price meets |
| financial investment strategies, portfolio assistance, | | | | the ask price of another, then a transaction can be |
| and investment advice among other things. | | | | made. There are often many standing orders of |
| This level of service in the game of stock trading | | | | multiple prices available at any given time. However, |
| however comes at a great price and that price | | | | when you check the stock quotes they will only |
| comes in the form of a sizeable commission or | | | | show the highest buy and the lowest sell rather than |
| transaction fee. If you are trading penny stocks, the | | | | showing all points in between. |
| fees for a full service broker will negate any benefit | | | | Stocks are sold with a 'best price' priority this means |
| you would receive from using their services. | | | | that stocks are sold to all with the higher buy orders |
| Discount brokers on the other hand can answer | | | | first, and then trickle down to the lower buy orders. |
| specific questions you have about investing but won't | | | | If your buy order (or sell order) was placed at the |
| provide quite the level of customer service. One thing | | | | same price as other buy orders, those will be sold in |
| that most people find infinitely enjoyable about | | | | the order they were received. |
| discount stockbrokers and doing the research and | | | | As a result of the ranking order, people often find |
| playing with the nifty computer programs and | | | | that only part of their order gets filled for a certain |
| analysis that most discount brokerages allow their | | | | price. If part of your buy order was filled early in a |
| clients to have access. People like being able to make | | | | given day you may want to adjust your offer so |
| buy orders from the comfort of their homes at any | | | | that the remaining order may still be filled that day at |
| hour of the day. They also can much better | | | | a slightly higher price (while paying only one broker |
| appreciate the price of $10-$20 per trade much more | | | | commission). If the order takes several days in order |
| than upwards of $100 that many full service brokers | | | | to be filled there will be a broker fee each day that a |
| charge. | | | | transaction occurs. |
| Once you've decided on your broker and have taken | | | | You will need to check with your specific broker |
| care of the basics of getting your account in order | | | | about his or her policy on cancellations and order |
| and funded you will be read to trade. This process | | | | changing. In most cases orders can be cancelled or |
| should take no more than 3 days. | | | | changed but there may be a fee involved. |