The advantages of an online trading account mean that you can get direct access to the market so you can make decisions quickly. It takes out the middle person who you would historically call your broker so the commissions you pay are much cheaper, sometimes as low as $10.00 per trade and you can start with amounts suitable for your own financial situation. By removing the middle person you also lose any potential advice they may have given you in regards to your investment choices. There are a multitude of online brokers that you could sign up for that offer low commissions for e.g. E- Trade or Ameritrade.
Although it is very straightforward to set yourself up with an online account you should not make investment decisions lightly. The risks associated with small cap shares are considerable and you will surprised on how quickly you can wipe out your entire investment portfolio. Before starting a good thing to do is determine your risk profile and as well as to define your trading or investment goals. If you do not like high risk ventures then I would recommend you stay away from small cap stocks.
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There are some factors you should address first before starting in order to start preparing your own trading strategy. You need to decide how often you will trade i.e. every day/week/month, how much you plan to invest with each trade and how you are going to pick which small cap shares to invest in. A good, solid trading plan is a must before embarking in any small cap stock investments online as your emotions can cause you to become carried away and when your emotions take over you will surely lose your investment.
One way to help you get your thinking straight is to consider your investment plan as a business plan and set yourself reasonable goals to meet along the way. A solid plan is what will differentiate you from all the other people out there who are just gambling their money. Although micro cap stocks are alluring to investors because of the promise of turning small amounts of money into a large profit, if you are looking to get rich quickly then I suggest you look elsewhere
Set yourself up with a good plan, maintaining good discipline and remember to have fun when trading penny stocks online and you will slowly but surely start to reap the rewards.
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