Not Trading on THESE Apps? What you Could be Missing
Almost every day, I get people asking me “can I trade living where I live?” The ironic thing is they ask me on instagram and Facebook. The ask me on Twitter or by email. They ask me over the internet.
If you have access to the internet you can do this anywhere in the world. It doesn’t matter if you’re using a smartphone, a laptop, an iPad or tablet. It doesn’t matter if you are using wifi or a landline.
This is one of the most amazing times in history. As long as you have internet access that allows data to come through and you can see the little blinking green and red lights, you can trade. With a penny stock trading app, you can trade from anywhere with a signal.
The crazy thing is we’re only at the beginning of this thing called the internet. The speed of technology is increasing. Strap yourselves in, because the ride is only gonna get more fun from here.
Benefits of Using a Penny Stock Trading App?
Let me clarify something first:
Not all the apps described in this issue are created equal. Not all are designed for trading penny stocks. Some aren’t even ‘trading’ apps. Instead they are tools to help you with trading. You might use them for research, charting, and news.
There are four kinds of apps here:
- trading apps tied to brokers
- stand alone trading platforms
- news/research apps,
- social trading apps.
I haven’t specifically categorized them that way. This issue is more of a head’s up about apps you should check out. If they fit your strategy then you can put them to use.
While covering the basics (and my two favorites), this list is not comprehensive. Also, most of the apps mentioned are not specifically penny stock trading apps. Remember, penny stocks are kinda the pariah of the financial world. Few apps have access to everything you need to trade them. Some are better than others.
Also, any app created by a brokerage gives you access to your account with that specific broker. For example, the Power E*Trade app is exclusive to an E*Trade account. Robinhood has their own app and Schwaab has their own stock trading platform.
What are the benefits of using intentionally designed penny stock trading software?
First, a solid penny stock trading app is like having several apps in one. You get a penny stock news app, a penny stock trading app, and a penny stock screener — all in one place.
If you’re wondering why that’s such a big deal, imagine having to buy several different apps. Then you have to move from app to app to get the real-time information necessary to make a trade. That’s how it was back in the day.
And you could still do it that way. But it’s like strapping on a bunch of extra gear to go for a walk. Not very nice. Trading on one platform, news on another, research and screens on another…
What is the Best Free Penny Stock Trading App?
Not quite ready to make an investment in a penny stock trading app or don’t want to pay commissions to a traditional broker? The good news is you can still trade. The bad news is, like so many other things in life, you get what you pay for.
This might sound a little harsh so I’m going to give you some info on everyone’s favorite freebie. But seriously, if you want to do this professionally, do yourself a favor and put some skin in the game.
Robinhood was started by a couple of tech geeks from Stanford. They went off to Wall Street to make their fortunes selling trading software to hedge funds. Then they got their big idea, moved back to California, and started Robinhood.
The goal of Robinhood is to ‘democratize’ the markets. They realized Wall Street firms were paying nothing to trade while the average trader or investor across America paid up to $10 per trade. So they created a brokerage/trading platform where ‘Penny and Bill Merican’ can trade stocks for free.
You might wonder how they make money? They have a premium service called Robinhood Gold. It allows you to trade on margin. They also earn interest from customer cash and stocks. And…
… they get rebates from market makers and trading venues. Not that they are alone in this. But it’s something you should understand about the markets. They get paid to send orders through specific exchanges via the market makers. In other words, they still have their hands in the pie.
As a quick aside, this should concern you. Not Robinhood, but the way stock exchanges work in general. You should understand how the markets work. If you think all is fair in love and on Wall Street … you’re sadly mistaken. I suggest reading “Flash Boys” by Michael Lewis.
My only real issue with Robinhood is order execution. As a day trader of highly volatile stocks, I need fast order execution. With Robinhood sometimes it simply takes too long.
I look at it like this: I pay a commission on a trade and it gets executed. Win or lose the trade happens in a timely manner. But if I choose to go with ‘free’ to save a few pennies, I could end up losing a hell of a lot more due to slow order execution.
It’s called false economy. It’s like buying the cheapest car and then wondering why it fell apart on the Interstate. I realize Robinhood is the choice for some people when they begin their trading journey. Just try to move on as soon as possible. If you are an active trader I’d stay away altogether.
What is The Best Penny Stock Trading App for Active Traders?
I use both Interactive Brokers and E*Trade. In my opinion they’re the best brokers for my trading strategies. They’re both big, stable companies — which I like. While I use them with StocksToTrade, they both offer their own trading apps.
E*Trade is a popular broker for penny stock traders. It only requires a $500 deposit to open an account and has decent customer service. They offer a flat rate per trade which is reduced if you make enough trades.
Before I go on… that wasn’t a push to trade more. If anything, I think you should trade less. Take the time to do research and plan your trade. One of the big downfalls of a platform like Robinhood is that people think they can trade more because they have no fees. This usually ends in disaster.
E*Trade has two trading platforms: Power E*Trade and E*Trade. Both are available for iPhone in the App Store. For you Android users, both platforms can be found on Google play.
The Interactive Brokers platform, Trader Work Station, works on Windows, Mac, or Linux computers. Execution is fast and you can trade listed stocks as well as OTC without any problems. They’re pretty good about borrowing shares for short selling. Sometimes it’s difficult if the stock you’re attempting to short is ‘hard to borrow.’
One limitation with Trader Work Station is the lack of Level 2 data. If you don’t know what that means yet, don’t worry. StocksToTrade offers a Level 2 data subscription and since STT now integrates with Interactive brokers — you’re set.
Interactive Brokers requires an initial deposit of $10,000 and has an account minimum of $2,000. Almost forgot, younger traders (age 26 and under) can open an account with a lower initial deposit. Bonus for the youngsters. Oh, to be your age again with modern tools …
Interactive Brokers charges fees per share traded. The amount differs based on your trading volume and is between $0.005 and $0.0005 per share with a maximum value of 0.5% of the position value.
What is the Best Major Brokerage Platform?
TD Ameritrade and Thinkorswim
At one time this was my preferred trading platform. It’s known for offering good customer service, good execution times, and availability of shares to short. There’s no monthly or maintenance fees. Unfortunately, the availability of shares to short fell off a cliff after Thinkorswim was acquired by TD Ameritrade.
Thinkorswim requires $2,000 initial deposit. There’s a mobile app (more below) and you can sync your account across devices. If you’re just about to hit the ‘sell’ button and have to walk out the door, you can close your position via your phone.
What is the Best Traditional Brokerage?
Charles Schwab’s proprietary trading platform is called StreetSmart Edge. You can either download a desktop version or access the platform via the web (cloud based).
Like most of the other broker apps, StreetSmart Edge lets you do research, place trades, and set-up risk management strategies.
Some of the features include interactive charting, CNBC live stream (in case you don’t get enough talking heads), and ideas for options trading with Schwab’s Idea HubⓇ tool. You can even trade penny stocks with Charles Schwab — they offer a large selection. You’ll pay a commission of $4.95 per trade.
Schwab Mobile is now available for iPhone and Android devices. If you’ve joined the Apple Watch crowd, you can access the mobile app from there. Yes, you can even trade from your Apple Watch. See what I mean when I say we’re just getting started with the internet?
There’s a lot to consider when choosing a broker and trading platform. I’ve had dozens (if not well over 100) broker accounts over the last two decades.
One thing has become super clear: don’t skimp on broker fees.
I’m not suggesting you should pay more than necessary, but be willing to pay fees to get your orders executed.
If you approach your trading career as “I’m doing everything on the cheap…” you’re already in the wrong frame of mind.
The Bottom Line
There are a lot of trading apps out there. And more are being developed all the time. By all means feel free to check them out.
But don’t get bogged down with “what’s the best app?” These are just some of the current options, and we’re only just scratching the surface of all of the resources currently available.
In the next issue, we will take a closer look at my top 5 iPhone specific trading apps for all of our IOS readers out there.
Just remember, as long as you are able to use these as tools to follow your plan and track your trades, you will ultimately become a better trader.
But technology can only take you as far as you are willing to work! So keep studying, stick to your plan, and join the technological revolution with me!
— Tim Sykes
Editor, Penny Stock Millionaires