The Best Penny Stock Broker: Online Brokerage for Beginners & Day Traders in 2022
The Best Online Brokerage: Key Takeaways
- Forget the fallacy of finding the ‘best penny stock broker’ — find out what’s more important instead…
- What to consider before you sign up with a broker and what you should always remember…
- Why does the right broker matter? If you can’t answer that question — you must read this now!
Check out what I’m doing with a broker for the first time in 20+ years of trading!
New to trading? Finding the best online brokerage should be your number-one concern.
Here comes the tricky part. There’s no one best broker out there. You need to find the best broker for your trading style and goals.
If you trade penny stocks like I do, finding the right broker is even more important. Why is that and how do you do that? Let’s start with the big picture.
Table of Contents
- 1 What Is a Penny Stock Online Brokerage?
- 2 Top Online Stock Brokers for Beginners
- 3 Key Tips for Choosing an Online Brokerage
- 4 The Bottom Line on Finding an Online Brokerage
What Is a Penny Stock Online Brokerage?
A penny stock online brokerage is a broker that you can access online and that allows you to buy and sell penny stocks.
Penny stocks trade at $5 or less per share. These aren’t the blue-chip stocks that your grandparents tell you to invest in…
These are the stocks of sketchy companies that often fail. But you can make money trading them. I’m living proof. I turned $12,000 into $7.3 million mostly through penny stock trading.
Some of these stocks are listed on major exchanges like NYSE and Nasdaq. Any broker will give you access to these…
But many of the penny stocks I trade are OTC stocks. Robinhood doesn’t even let you trade them!
If you want to access the WHOLE market, you have to find the broker that will give you access to the stocks you want to trade.
Investment and Trading Companies
The markets are BIG. Everyone has different strategies, goals, and areas of expertise.
An online broker can have specialties, too. Some focus primarily on long-term investment strategies…
That’s not my bag. Instead, I day trade penny stocks. My trades usually last only minutes.
The top brokers have their own trading platforms. The quality of these varies widely.
Let’s take a brief look at your options.
Top Online Stock Brokers for Beginners
I almost never recommend brokers (more on that in a bit). I often say to find the one that sucks the least for you. That said, here are five I get a lot of questions about…
Do your own research to find your best fit.
StocksToTrade
Before we get to the traditional online brokers, let’s talk about how you can find which stocks to trade…
For me, there’s only one answer: StocksToTrade.
It’s a low-stress, high-data platform. It gives you everything you need to succeed in trading.
It’s not an online broker. This is a stock screener, news scanner, and charting that can rival any brokerage platform out there!
Many new stock traders get overwhelmed with all the information that’s out there. It’s confusing and frustrating … and it eats up a ton of time.
Designed by traders like myself, StocksToTrade helps simplify the process. It puts all of the most important tools in one place.
Take StocksToTrade for a two-week test drive here.
Now, let’s move on to online brokers…
Robinhood
Robinhood has built up a massive userbase in the last few years…
I don’t personally think that’s because it’s the best broker.
If you compare their platform with others on this list, you’ll find it’s fairly limited. A lot of new traders like this simpler approach…
I don’t.
Trading is a battlefield. If the other side has better weapons than you, you’re not preparing yourself to win.
TD Ameritrade
I’ve used TD Ameritrade and know lots of people who use it consistently. It’s one of the most well-known online brokers in the world, which gives it some immediate credibility.
Its main trading platform is called thinkorswim, and it’s one of the most highly-rated out there.
In 2020, fellow mega-broker Charles Schwab acquired TD Ameritrade. According to Schwab’s website, that means that Schwab users will soon be able to use thinkorswim too.
E-Trade
E-Trade is the broker I tend to use most when going long. It’s not the only broker I use…
It’s just given me the least problems in recent memory.
Remember that your broker is a tool. So I use them in the way that works for me. And I’m always open to moving on to the next best tool for my trading.
Everyone trying to trade despite brokers galore having issues, I don't need to force anything I times like these, happy with my $2kish profit so far on $BLSP & pumped $CYDY is squeezing, but when there's brokers issues sometimes the best trade is no trade at all! #etrade $IBKR
— Timothy Sykes (@timothysykes) February 1, 2021
Interactive Brokers
I don’t short sell much these days … But if we get a market crash in 2022, that could change. (See the #1 broker I’m working with this year that’s great for shorts.)
I’ve used Interactive Brokers for shorting before. This broker has a ton of assets, which is good if you’re looking for shares to short.
They’re also good for international traders. They allow traders in over 200 countries to trade U.S. stocks.
TradeZero
This is one of the most common questions I hear from students: “Which broker should I use?”
And until now, I’ve been hesitant to answer that question. For years, I told traders to pick the broker that sucks the least for them.
Now, I’m proud to announce that I funded an account with an up-and-coming broker, TradeZero. I’m starting with about the same amount I had when I was a brand-new trader over 20 years ago — $12,000.
This is specifically for my small-account challenge. So why TradeZero?
TradeZero is a disruptive broker that’s changing the way day traders can trade in different markets. It’s mostly commission-free and offers competitive pricing. And TradeZero has awesome trading tools for listed and OTC stocks, with crypto tools coming out in January 2022.
I’ve been trading for 20+ years now — and I’ve never done this before with a broker. And I’m so excited to finally work with a quality broker. We have so many exciting things coming up, including some cool bonuses for you.
Learn more about TradeZero and how to get your bonuses here.
And check out my conversations with Dan Pipitone, founder and CEO of TradeZero, to see why I’m so excited about this.
- Why I Would Start Short Selling Again
- Lessons From My 20+ Year Trading Journey
- The Truth Behind Trading Mentors — Do They Show THIS?
How to Select a Penny Stock Broker
When you’re making this choice, here’s the most important thing to remember…
The online brokerage you choose doesn’t have to be your final answer.
Some traders switch brokers.
Others use multiple brokers. Besides letting you compare brokers, this will give you three more day trades to make if you’re under the PDT.
The best way to figure out which broker works for you is to research and experiment. Let’s get started.
What Do You Need to Consider When Choosing an Online Brokerage?
There are several things to look at. Let’s start with the thing that most beginning traders look at first.
Trading Costs
Most brokers have adopted a ‘commission-free’ model. But with OTCs, you can still pay commission. I don’t think commissions are a bad thing.
NOBODY ever got rich saving $ on commissions & what you don't realize is that your broker isn't even saving you $, they're farming out your orders to big hedge funds who are laughing at the poorest/dumbest people for being so unprepared, taking from the poor & giving to the rich!
— Timothy Sykes (@timothysykes) January 8, 2021
In fact, they can be good…
If there isn’t a trade you can make 20%, 30%, or 50% on, don’t trade.
Still, you don’t want to use an online brokerage that charges more than the competition. This is especially true when it comes to hidden fees.
Again, do your research. Read the fine print. Find out exactly how much an online broker charges and for what.
Trading Tools
The top online brokerage platforms all provide trading tools and resources. They have tutorials, newsletters, and trading platforms.
Some are geared more to investors — not the kind of day trading I teach here.
Some won’t even let you trade the sketchy penny stocks that I focus on in the Trading Challenge. So know what you’ll trade first, then find the best tools for YOU.
Mobile Trading
A desktop trading platform will almost always be better…
But like I said in the previous section, it’s all about what fits your life. This is how you become the best penny stock broker.
If you need to go somewhere while you’re in a day trade, your broker better allow you access. That means a capable mobile app.
Unfortunately, to me, a lot of the apps out there fall short. That’s why I love the StocksToTrade mobile app…
Its charts are just as accurate as the desktop version. Its top-shelf stock screener lets me track other trades that are forming as well.
Mobile trading offers other benefits, such as alerts while you’re on the go.
Customer Service
Discount brokers will discount anything they can. Nowhere is this more glaring than in the customer service department.
This is one of those things you won’t care about until the moment you really need it. But if you have a problem, you need to be able to contact a living, breathing person. That’s not an option with every online brokerage.
Don’t learn this the hard way. Pick up the phone or live chat, and see who’s at the other end.
Stock Analysis
The big brokers like TD Ameritrade excel at this. They’ll often have analysts rating stocks, as well as broader analysis of market trends…
That doesn’t always help for the stocks I like to trade.
I try to keep things simple.
A tool like StocksToTrade is perfect for me. I get access to clean charts where I can watch price action in real time. And the Breaking News Chat feature alerts traders like me to the hottest stock news. I owe so many great trades to this service.
No matter which platform you use, make sure you have the best tools to make the most of your time and effort.
Regulations
There are two types of regulations.
First, there are rules from governing bodies like the SEC and FINRA. Then there are the rules your online brokerage creates.
You need to be aware of both.
Unlike some traders, I don’t hate the PDT. It’s just one of the major rules of the first category. There are also other regulations for U.S.-based brokers, like minimum margin requirements.
Your broker may enforce further requirements. These are rules to keep you safe…
But if you don’t pay attention, they can get you into trouble.
You could have your account limited, canceled, or restricted. Make sure you’re aware of the rules and regulations before you begin to trade.
Account Security
You want your best penny stock broker to take your money as seriously as you do.
This should involve two-step authentication, data encryption, fraud protection, and firewalls. Every reputable online brokerage will have all of these safeguards in place.
Most brokers guarantee your money if it’s lost due to “unauthorized activity.” Just be careful — trades made by people with whom you share your password aren’t covered.
Order Execution
Every best penny stock broker knows: execution speed matters — especially with penny stocks. They move fast. You need to be able to act immediately if you decide to trade.
Your online brokerage should be transparent about its execution speeds. Every U.S.-based broker is bound by the FINRA rule on best executions. According to this rule, brokers must try to get the best price for your order possible.
But brokers don’t always do this. Robinhood has famously had problems with this … but that’s not the only one.
It wasn’t that long ago that E-Trade incurred a near-million-dollar fine.
So how do you find a broker who won’t screw you? For me, it comes down to experience.
If it feels like a trade is taking too long to execute, it probably is.
International Trading
Some online brokers permit international trading, others don’t.
Interactive Brokers has a great reputation for international access. Other brokers might work too. Do your research to see if they work for you.
Key Tips for Choosing an Online Brokerage
When you’re choosing an online broker, I have two key tips for you to keep in mind. They could be total deal-breakers, in my opinion — so take them seriously.
Know the Broker and the Terms and Conditions
Online brokerages change their terms and conditions all the time. Again, do your research.
Never Let Anyone Trade for You
You’ll never learn how to trade penny stocks if you let someone else make your decisions or execute your trades. Practice makes almost perfect. This is how you become the
best penny stock broker.
Focus on expanding your education on the stock market and making your own decisions.
This, not your broker, will be the big difference in your trading.
The Bottom Line on Finding an Online Brokerage
Choosing an online brokerage is a personal process.
I’ve tried many different trading software programs and online brokerage tools over the years…
It all comes down to preference. You won’t know that until you start researching or even try a few.
Ready for next steps in your trading journey? Apply for my Trading Challenge. I’ve helped educate 20+ millionaire traders now — and I’m always looking for more dedicated students. Will you be my next success story?
What do you look for in an online brokerage? Let me know in the comments!
Share
How much has this post helped you?
(8 votes, average: 5.00 out of 5)
Loading...
Hey Everyone,
As many of you already know I grew up in a middle class family and didn't have many luxuries. But through trading I was able to change my circumstances --not just for me -- but for my parents as well. I now want to help you and thousands of other people from all around the world achieve similar results!
Which is why I've launched my Trading Challenge. I’m extremely determined to create a millionaire trader out of one my students and hopefully it will be you.
So when you get a chance make sure you check it out.
PS: Don’t forget to check out my 30 Day Bootcamp, it will teach you everything you need to know about trading.
Hey Tim,
I live in South Korea. Do you recommend any online brokerage?
Thanks
Try Interactive Brokers
It’s a shame that Interactive Brokers is restricting trade on some of the recent tickers on your watchlist such as ENZC, PRMK and CNGT.
Contact them and tell them. Better yet, check out my sykeszero.com deal.
Hi Timothy,
thanks for that Post.
I see that a lot of your top students trade with Cobra Trading, right?
E-Trade still not allowed international Trading, right?
Cause i am from Cyprus, the best for me is Interactive Brokers, right?
Thanks.
Interactive Brokers is available in Cyprus. Start there.
Am happy for you sir , but am in Tanzania does this interactive brokers works even in here??
IB isn’t available in Tanzania at this time. See why I’ve started using a new broker here.
Do you recommend any rooms for stocks to buy and sell? Do you offer that by any chance? I noticed I get loads of people in my ear telling me to buy this , this & this and I don’t want to put my money up based off that. I want to follow somebody who’s proven to pick good stocks like yourself.
Never follow my or any other trader’s alerts into a trade. EVER! Learn to be self-sufficient. We have chat rooms which you can find here, but we NEVER say “buy this or buy that.” EVER. NEVER EVER. NEVER EVER, EVER, EVER. Learn to be self-sufficient. Give me 100 burpees for even suggesting following alerts. Enjoy.
I asked a question to your team. They did not answer clearly. My question is if I need to open a margin account to day trade? My Fidelity standard account doesn’t allow me to buy and sell a stock the same day saying good faith violation
No, you don’t need a margin account. But you do need to have sufficient settled funds to trade. Fidelity has a whole article about it here.
Are there any penny stock brokerage sites with a good UI? I looked at TD and Schwab, and they both look like they were built in 1998.
As a beginner and with very very limited knowledge about trading, this post is very helpful to really understand which broker I need to engage with. I am in your 30 day bootcamp and still learning and I am very enthusiastic to progress in trading. Thanks for this post.
hey tim, i like your stories and love your attitude!!!
I have joined Timothy Sykes program. But with the cost of each trade being about seven dollars through the brokers he covered. How much would I realistically how much money would I have to have to start off with investing?
Focus on the process at first. Take fewer trades and smaller position sizes. Learn which patterns and strategies work best for you, then scale up over time. How much you make or lose in the beginning isn’t as important as the process. But that only works if you trade small.
Tim, Thanks for your Great Contribution to the Penny Stock world. I hope I can trade with you guys this year. Happy New Year
YES!
Awesome content been thinking about stocks, trading etc. and came across you. Hopefully it will pan out, thanks! Happy New Year.
Yes
Thank you Tim!! I have E-trade and TD Ameritrade for my brokers for now.
You are so right in your analysis in this video. I have both E-Trade and Interactive Brokers. I am getting rid of Robinhood today. They will be withdrawing my funds by December 22, 2020; and I still have 1 more withdrawal today after $AEMD today and they did not send me a verification code. I’m excited to find 1 more Brokerage Firm or just add more finance to the two I have.
Dec. 3, 2020
Mr. Sykes,
I just want to personally thank you for he opportunity to learn from you.
I am a newbie and green as they come however I have been on the fence and “observing” for what seems like a lifetime. There is no doubt in my mind
that I am capable and ready to take it to the real level. I mean get my feet
wet. I am not sure if I am a “student” or not . I have spent money on my education with you. I have had stocks to trade in the past. I have sent you education dollars a couple times. I even bought a ticket to the summit event in Orlando for 300.00 plus dollars. I was unable to attend however due to not having the funding for Air fare lodging or anything else for that matter. In retrospect If I had it to do over I would find a way ANY way for airfare and worried about the rest when I got there. You see I live in Fairbanks Alaska and i:’m sure it would be easier to be homeless in Florida vs. Alaska! Not that i am or was homeless but I Know I could survive for a few days if need be just to be in the position to be a part of that whole experience!! Sometimes I make bad decisions.
Anyway I don’t want to waist your time just wanted to give you a shout out and tip you off to be aware of me . I am not sure when….But I will make an entrance that is worth noticing. And I am sure you will play a role in that to some degree. You are awesome and I look forward to shaking your hand and throwing back a shot or two in congrats on a mutual money making trade some time in the near future.
Be safe and God Bless
Future She Trader and Millionaires
Susan Hockenbury
Hey Tim,
Do you use the broker integration feature on StockstoTrade or do you bounce back to E-Trade to make the actual trade?
Depends on where I am in the world and my wifi connection but most of my trades get executed on E*Trade.
I have never thought about exploring the world of stocks but so far you have been so informative and I want to keep learning, thank you.
Thanks for all of the information, Tim. I started your 30-day bootcamp today, and I am looking forward to being a millionaire success story. What are your thoughts about using Merrill to trade? I have an existing account there.
Some students use different brokers than me. It’s really up to you. You can always try out different brokers like I have over the years.
Hi Tim, I have an old Options Xpress account that I used for Forex trading for a short stint that is still active. They were bought by Charles Schwab. Do you suggest I leave it alone and open an E*Trade account.
You have to find what works for you. I’ve tried a lot of brokers over the years and found E*Trade and IB suck the least, for me.
Hi Tim, just started your 30 day bootcamp, and I would like to know your recommendations for brokers in Canada? Thank you for any advice you can give.
Most students outside the U.S. use interactive brokers. 🙂
Sir what do you think about cfd brokers I can’t sign up with USA brokers due to country restriction.. I use trading212 and its cfd broker what do you think about it pls
Have you tried Interactive Brokers? It should be available to you. I know nothing about trading212 but cfd trading is risky as it’s not thoroughly regulated.
Hi Tim just discovered your training and advise tonight while searching for information o how to trade been interested for a while but i i had a bad experience with Binary trading and options a few years and decided to just let it go but it like something scratching me to try again. I need to improve my life and has set out to learn as much before i dive in again and for the first time from reading and listening to you video i am getting excited again. I am in South Africa does E trade work here as well.
Most of my students overseas use Interactive Brokers.
Sir,
I just want to say first, thank you for creating the program. I think that with hard work i will get a lot out of it. I also want to say thank you for the suggestions in this video and the TRADING TICKERS videos made by Tim Gratanni. All of this information is amazing and i’m hoping it will change my life. I’m currently stationed in Incirlik Turkey, but im still studying my butt off hoping to be a millionaire in 5 yrs. Bless you man for helping others believe they can be successful.
YES!
Hi Tim, I know you mentioned E*Trade and Interactive brokers but I would like to hear your feedback on Ally.
I use E*Trade and Interactive Brokers because they suck the least.
Became a student about a month ago. I know very little about trading. I am following your videos, studying the penny stock book, watching your trades and the webinars and taking lots of notes. I am now just absorbing everything and have not but much contact in the chat room. I am 65 year old retired teacher and know this will work for me. I have some health issue that keep me from studying long hours and brain fog. I may be 70 before I am a millionaire, but I will get there. I opened my account with E-Trade.
tim what do you think of Fidelity ?
You have to choose what works best for you. I use E*Trade and Interactive brokers. Not because they’re great, because they suck the least.
Hello, first and foremost, I wanted to say, I got your book about Complete Guide to Penny Stocks… Unfortunately, right now, I’m doing a lot of travel for my day job and can’t find the time in the mornings to do the trades… BUT, what I would like to know, is there an advisory firm or something that I could work with that would make the trades for me based on their knowledge, but then only charge me a percentage of the profit? I hope to watch the videos that was part of the 7-part video package I received also when I signed up when I am traveling this week! I’m hoping I could start with $500.
Thanks for putting this blog together, it is a good read!
I wouldn’t recommend that. What you’re talking about is more like a traditional advisor or mutual fund. That’s ok for some people but I teach self-sufficiency because the potential is MUCH bigger.
I am totally new to this, I would need your help to start trading. Does having a broker mean less risk?
A broker is required to trade. Read “The Complete Penny Stock Course” for basics.
Just a note regarding the previous comment on Canadian brokerage options:
TDAmeritrade Think or Swim can be set up for Canadian traders through TD Direct Investing.
Interactive Brokers have eliminated the $10,000 account minimum since April 2019.
See here:
https://www.investopedia.com/news/interactive-brokers-eliminates-10000-account-minimum/
Hi, Do you have a video of how to use E*Trade by any chance?
Contact E*Trade support. They’ll help you.
Just joined at the minimum level for now. I have an account with Charles Schwab and have been using StreetSmart Edge for my platform. Since Edge comes free with a Schwab account, I’m thinking it should work fine as long as I learn to use it. Thoughts on Edge?
Again, I use E*Trade and Interactive Brokers. But I have students who use different brokers. You’ll figure out what works for you.
Hi Tim
i live in IRAN unfortunately.
what is your suggest for me because i think i cant find broker work with IRAN citizens
You’ll have to research to find which brokers provide service in Iran. Also, I’ve heard my patterns and strategy work in other markets. Not sure if that’s true for the TSE. Whatever you do, keep studying!
Why are my comments not going through? (testing if this one does)
Sorry. Sometimes it takes a few days for me to get to comments. Especially in this crazy market!
Thank you Tim for your never-ending giving back! To the readers: if you’re like me (Europe based with a couple of thousands to my name) this comment will help you out. I’ve been trying to find a decent broker so I chatted with several brokerage companies recently to try to open an account. But most companies closed their doors to foreigners after tightening of regulations a few years back. Here’s my research results:
* E*TRADE – U.S. only
* TD Ameritrade – U.S. only
* Merrill Edge – U.S. only
* Fidelity – Have to fly to U.S. and open an international account from a physical branch there…
* Interactive Brokers – $20,000 minimum liquid net worth to trade anything
* Charles Schwab – $25,000 minimum deposit
* Scottrade – bought by TD Ameritrade
* TradeStation – JACKPOT !!
So I opened an account with TradeStation. Some details:
* Minimum deposit – $500
* Minimum balance to keep the account active – $250
* Paper trading available – Yes
* Commissions – $5/trade up to 10,000 shares; $0.005/share if 10,000+ shares
* By default, real-time NASDAQ L1 is included for free. For OTCs, only delayed data is free and no OTC trading allowed. NASDAQ L2 is available for $11/month and OTCs L2 with ability to trade OTC markets is $16/month.
Just very happy I found a decent broker I could open an account with.
Thanks for sharing!
Hi Tim, I am from South Africa. I have been looking at your website now for a week. I am teacher too and I can spot the passion for teaching when I see it. I am keen to get started and have applied for the trading challenge. Since the market crash due to Coronavirus our currency devalued a lot against the dollar so I couldn’t upgrade to VIP. But I am excited for the new learning curve in my financial education.
Good! Keep studying!
Can you trade penny stocks on RobinHood? I have been trading regularly on the platform, and like the simplicity and ability to do it all on my phone on the go. However, I’ve noticed inability to purchase/sell at certain times, and also the app not supporting some stocks so I was curious if I can use that on your program since I’m already using it daily for all the rest of my trades. I also have portfolios on TD Ameritrade and Fidelity and Chase Bank, however, I use them for long term mostly and find them to be more difficult and cumbersome to use. Your advice is greatly appreciated