Discount Broker Benefits
Discount Broker Benefits save time and aggravation for the self-directed trader.
The topic after this will discuss discount brokers. To ease you into this topic, I want to briefly discuss some major disadvantages of full service brokers and then show you how the benefits of discount brokers correct those problems.
Some of the major problems with full-service brokers have to do with how orders are placed. Clients of full-service brokers typically call in their orders to their stock broker. This is a serious problem for the penny stock trader - a problem that discount brokers correct.
Placing trades by phone with a live broker:
- Usually far more expensive.
- More complicated, especially as a beginner - you have to word everything precisely. So you have to learn and practice all the different trading terms and language before ever placing a trade.
- The broker may attempt to discourage you, or mess with your mind, causing you to lose your objective balance and strategy.
- By the time you call, wait for the phone to ring, talk with the broker, and place the trade with him/her, you could have missed many time sensitive windows of opportunity to purchase shares at the prices you had hoped for.
In contrast to broker assisted trading (common with full-service brokers), here are some major discount broker benefits for the successful penny stock trader - the Extraordinary Investor:
- You normally place trades on your broker account online
- Learning to place trades online is self explanatory / can be learned in seconds to minutes just by looking at the trade ticket.
- Placing trades is so simple, and very fast - within seconds.
- The costs per trade are usually far lower than placing trades with a live broker.
- Quality discount brokers provide free real-time quotes. Real-time quotes are essential to track stocks, plan trades, and place trades - especially short term. Avoid discount brokers that do not offer free real-time quotes.
- All you will need to make extraordinary trades are basic real-time quotes. Level 2 quotes are not required.
- All stock research should mainly be done for free on the internet. This type of researching insures you learn how to research correctly and prevents you from missing anything. Since this is the case, the discount broker you choose does not need anything but basic research tools.
- You can perform some or most of your stock research online and through your discount broker platform as well. That all depends on the quality and quantity of extra services of a particular broker. Internet research is quite sufficient.
- Through that broker platform you can keep close tabs on the stocks you bought in real time as they trade.
These are the major discount broker benefits that must be met to be a successful penny stock trader. Even so, they are benefits only if you develop and use winning strategies that create successful trades.
This site is dedicated to teaching you the winning strategies of the Extraordinary Investor.
You have now completed this subtopic called:
Discount Broker Benefits
When you are ready, please continue on to the next topic:
Best Discount Brokers: The Search for the Penny Stock Friendly Broker - Continues.