Online Stock Trading – Is It Really That Easy?

Online Stock Trading isn't something that is new. Stock brokers started making online trading a reality for average people back in the 1990’s. Some of the trailblazers in this field are continuing to provide the opportunity to trade stocks online to anyone who opens an account. I briefly reviewed 3 online stock brokers towards the end of this article.

There are really 3 important things to consider about online stock trading:

• Are you prepared to make your own investment or trading decisions?  A great way to get an edge when trading on your own is to subscribe to  a couple successful stock picking newsletters. There are many fraudsters who make outlandish claims, but some stock newsletters do an excellent job highlighting profit making opportunities to their subscribers. My favorite stock newsletter is Microcapmillionaires.com. They focus mainly on penny stocks and stocks under $10 that move up in price within 1 week from the time they alert their subscribers.
• Do you have a fair amount of money to start trading? Seems like a no brainer question….but the fact is that some people think they can start trading online with only $50 or some crazy small amount of cash. Don’t misunderstand–you can start trading online with an amount as small as $500. Anything significantly less than that is very hard to build off of since you will be paying anywhere from $5 to $10 every time you make a trade. Those fees add up faster than you think!
• What is your goal? Are you trying to construct a dividend paying portfolio or are you trying to take your $1000 portfolio and turn into 10k? If you want dividends then you want to search for good stocks with high paying yields. If getting rich is the name of your game (why beat around the bush), you need to find penny stocks with potential for large gains. Another way to make big returns (with high risk also, of course) is to trade stock options. Optionsmillionaires.com specializes in stock options picking and to this date they have provided me with phenomenal percentage returns on their picks.

Now, once you have addressed those issues, you need to pick an online stock broker. Here are a few good ones:

1. Zecco.com $4.50 commission on each stock trade. No other broker is cheaper. Simple, easy to use trading interface. No fancy tools though.
2. Etrade.com $9.95 trade commissions. A little steeper if you are starting with an amount under 1k. Nice tools if they approve you as an active trader. Non USA trader friendly.
3. Scottrade.com $7 trade fees. Cheap but they hassle you if you try to buy penny stocks.

Bear in mind that no matter what broker you pick, the bottom line will be the performance of the stocks you buy and the timing in which you buy and sell those stocks. Online stock trading is a truly rewarding endeavor that many have succeeded at…don’t be scared off by the horror stories of people who lost their shirts. Be deliberate and assess your risks correctly and you stand a good chance at achieving your goals through trading stocks online. It’s a heck of a lot fun too.

News Source:  Online Stock Trading