Strategies for Successful Investors

Trading Education

I'm going to go over very simple steps to get the novice investors started.


  1. Open a brokerage account. Most people use online brokers such as Ameritrade or Etrade. They provide fair commission prices and simple screens for trading. A brokerage account is a like bank account that you fund that allows you to buy and sell stocks.
  2. Determine your objective. Do you want to day trade or invest. Day trading or short term trading will require more time and more focus on the stocks you want to trade. A longer term strategy will not determine as much time but should involve more research in the companies you plan to invest in.
  3. Once you have your objective determined, buy the stocks you like. Stop losses or an exit plan should always be in place when buying any stock. An exit plan minimizes losses and helps profit profits to the upside.
  4. A good place to research companies is Yahoo Finance, Big Charts, Pink Sheets.

What Is a Penny Stock

In the United States of America, a penny stock, also known as a micro cap equity, refers to a share in a company which trades for less than $5.00. While this is the official definition, and is used by the US Securities and Exchange Commission, generally every full service or discount broker, and the vast majority of analysts and institutional investors, there are informal (but paradoxically less inclusive) criteria applied by the general public and most retail investors. In other countries the term may be used differently, without reference to US institutions.

As well, there are many limitations with the alternative definitions, as they often contradict themselves. For example, there are many companies trading for only a few cents with market capitalizations of hundreds of millions of dollars, or corporations trading on the Pink Sheets but having share prices of $50 or more.

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