I found your site in today's Barron's article. Your web site looks great and it is always nice to see that someone takes the time to research companies without having a banking relationship at hand.

Intro to Stocks

Only Two Things Needed To Start Trading

Money
Broker

Getting Started In Stock Trading

If you're unfamiliar with trading on the stock market, this page is for you. For those who have never bought a stock, but have some money they'd like to invest, we've put together this quick overview to help you get started.

Brokerage Accounts

Every investor needs a stock broker to handle buy and sell orders. The first step is to decide which kind of firm will work best for you. Do you need one that offers full service, or can you go with a discount brokerage firm? Please read on and decide.

Full Service Stock Brokers

The advantage of a full service account is that you'll get more personalized attention. The broker will understand what your investment goals are and can offer recommendations on what and when to buy and sell. However, because their commissions can run as high as $100 a trade, this type account works best for those with high net worth and/or minimal trading activity.

Full service brokers are not a good fit if you want to trade in penny stocks because you'll be investing smaller amounts of money and doing it more frequently. The high commission fees involved would take a huge bite out of your potential profits. Instead, we recommend using a discount brokerage firm.

Discount Stock Brokers

Discount brokers do not offer the same level of service, but they're still available to answer your questions. You've probably seen the television ads for firms that execute trades for the low fee of ten or twenty dollars. With commissions that low, naturally it's going to leave you with more money to work with.

Other discount brokerage advantages include online account access via computer or an automated telephone system. From your computer, you can monitor your account activity, keep track of open orders, and get relevant market information and stock quotes. This is a great benefit to penny stock investors because of the 24/7 access.

If you need assistance in selecting a discount broker, check out our Top 5 Brokers for Penny Stocks report at PeterLeeds.com.

Setting Up The Account

Once you've chosen a broker, have them walk you through the necessary forms for opening your brokerage account. It's very similar to setting up a standard bank account where you're expected to make an initial deposit of cash. Accounts are typically up and running in about three days.

This account will hold all your trading assets, whether cash, stocks, or bonds. The money you have deposited will be used for making purchases. When you sell, the cash from the sale goes back into your account for future purchases.