How to Setup an Online Stock Trading Account

The advent of the internet gave greater opportunity for stock trading. Traders could trade stock at their PCs in their own home and trade stock globally all through the day and night. Traders from rural areas can not only trade stock online but get real time news and stock quotes instantly on the internet. Comparing online discount brokers is helpful and suggested.

The first step before setting up a stock trading account is to get all the equipment required for effective stock trading. A good computer and large size monitor or three monitors will do the job for a beginner. Good trading software will help easy trading once the account is set up. A high speed internet broadband connection is required to get instant stock quotes, to communicate instantly with the stockbroker and to make quick decisions based on the inflow of stock information. A good UPS will ensure constant power supply.

The second step is to find a reliable trading platform. Online reviews, articles in the newspaper, the past experience of friends and relatives and the Better Business Bureau are good resources to find the background of broker firms. The Federal Trade Commission has a list of violations by broker firms on their website. FINRA the Financial Industry Regulatory Authority has a Broker Check tool on their website to help potential traders evaluate brokers.

Before setting up the account the trader should test the support provided, and the customer service of the broker by asking questions to the broker. The trader should check if the portfolio of the broker has all the trade groups that the trader is interested in. Statements and transactions should be instantly viewed online to help traders mitigate losses if any. Many brokers have demo trade facilities. Traders can check them out before signing up to see if the trading style is suitable to their unique needs. Traders must shop among brokers to find the most affordable broker who offers a spectrum of facilities and tools for easy trading. Brokers should also help traders by doing the required research about the stock, arrange bank deposits and withdrawals and give advice on tax implications to traders.

Once a good trading platform and broker is chosen, traders can sign up. A form will be presented on the website. Traders will need to enter their personal details like their name, address and telephone number. Generally potential traders need to be adults. If children are attempting to trade, the parent or guardian should act as custodian. The potential trader will need a bank account where profits can be deposited or payments for stock purchases can be withdrawn. A minimum balance may be stipulated by the broker.

For security purposes a password and a password question will be required. In these days when there is an imminent danger of an identity thief misusing the identity of the trader, maximum safety is required. The broker's website may require entry of a security code before traders log in on the website.

Choose a Stock Broker - Key Points to Remember

How to choose a stock broker

To invest in the stock market, you need to have a DP (depository participant) account and a trading account. These services are offered by a stock broker (SB). Basically a stock broker is an entity through which investors buy and sell shares. There are many stock brokers in the market. Each SB has its own unique offerings of services. Before you choose a stock broker, few points you should consider -

1) Know your stock broker - Gather information about the SB - When the brokerage business started, background of the owner/promoters, how strong is the brand of the SB, was the SB involved in any controversies.

2) Account Opening Charges - What is the account opening charges? Check the account opening charges by other brokers also.

3) Stock Broker Charges - A SB charges can be broadly divided into two main categories - a) Stock trading charges and b) Maintenance charges

a) Stock trading charges - There are two types of charges for trading in shares. a) Delivery Charges and 2) Intra day Charges. Delivery means if an investor takes delivery of the shares, it is called as delivery of shares. Intra day means if the investor buy/sell shares on the same day. Delivery and Intra day charges are different and vary from broker to broker. Check the delivery and intra day charges with the SB and also found out how much other SB charge.

b) Maintenance charges - Every year, the SB charges maintenance charges in order to maintain your account. Do check the maintenance charges and compare with other brokers maintenance charges.

This is the most important criteria for choosing a SB as the account opening charges is a one time expense whereas stock trading charges and maintenance charges are recurring. It is always advisable to select a broker whose trading charges are competitive vis-à-vis the other brokers in the market.

4) Stock broker services - Broadly the SB services can be divided into two categories - Online and Offline services. You can buy/sell shares by calling up your broker (offline) or through online. Online trading means you can buy/sell shares through the internet. Check with your broker if they provide both the services or not. It is always advisable to choose a broker which offers both the services.

5) Investment research and stock information - Brokers also provide updates and information on stocks. Check the past record of the broker in providing excellent tips and information on stocks. Based on their past success stories, you can zero in on the broker.

How to Buy Penny Stocks - Information for the New Investor

Are you an investment newbie who is intrigued by the idea of penny stocks? If so, you may be wondering exactly how to buy penny stocks. What do you do first?

Well, first you must locate a broker who will be a middleman between you and the market, or the other investor/buyer/sellers. You tell the broker what you want to buy, how many shares of what company, and the broker tries to fulfill your order. Brokers can be full-service or discount. Brokers charge a commission fee for each fulfilled trade, but with a discount broker, you can place your trades yourself through a computer interface so the commission fees are much less.

There are pros and cons associated with each type of broker, and you may be more comfortable at first with the hand-holding you can get from a full-service broker. Maybe you want to consider the higher fees as a sort of educational expense. However, once you feel a bit less lost, you will probably want to switch to a discount broker for trading penny stocks. Some well known discount brokers include TDAmeritrade, E*Trade, and Scottrade.

Follow your broker's instructions about opening an account and make sure your account has enough money to cover the cost of your trade plus the commission fee. When you want to acquire shares of a stock, you give your broker a buy order. Your buy order should state the ticker symbol of the stock, the market the stock is trading on, the number of shares you want to buy, the price you are willing to pay for the shares, and how long your order should be considered active.

Where do you get the information needed for a buy order? That's where the research part of investing comes in. You can read and review several of the many penny stock newsletters available, join and ask questions in an on-line forum, or subscribe to a good recommendation service. Remember, though, that if you want to be a real penny stock investor, at some point you must take the leap and back your research with your money. That's where the exciting part of investing comes in.

Penny Stock Information - Read This Before You Buy Your First Share

It's obvious that more traders are becoming interested in trading penny stocks. They like the idea of being able to invest in the stock market without having to be rich. Hopefully with this penny stock information that I will provide, you will be able to invest safely and securely without risking much capital.

First and foremost, you need to do the proper research. I understand that the low price of penny stocks is tempting to the "knee-jerk" trader. These are the kind of traders that just jump into a trade without analyzing the pros and cons of the company. Remember, chances are you are going to be investing lesser known, less established companies. You've got to do your homework.

Also, find yourself a reliable website that provides information on the kind of penny stocks to trade. There are A LOT of websites that provide FREE stock tips. I've discovered that with most of these kind of websites, you are getting exactly what you are paying for. So, if you are getting free tips, then don't expect to become a millionaire.

But I think the biggest mistake that many traders make is that they are trading with money that they cannot afford to lose. This can destroy your account. Irregardless of what kind of trading it is you are doing, trading with scared money is a recipe for disaster. Scared money is usually considered money that you would normally be using to pay the bills, mortgage, car payments, etc...

Follow these tips, and I don't see any reason why you can't succeed.