Are you scared away from reading this article? Don't be. Everyone (18 and over mind you ) can invest in the stock market, regardless of job, education and location... and its easy! Whether you are a work at home mom, a blogger, entrepreneur, student or what have you, investing in the stock market is as simple as finding a product you use and predicting the company will turn out something newer and better.

I am 18 years old and I hold $1,500 worth of stocks in a brokerage account. I'm sure you are considering all of the bad economic news that is out, and really the height of the crash came in early January. I started my trading account on January 1st, and I have positive gains thus far. If you haven't put serious thought into buying stocks, now is the time.

Here are five clear-cut reasons you shouldn't be scared to invest in stocks:

1. The "Big Dogs" Don't Want You To Its a fact. Plain and simple, the big market players (mutual funds, investment banks, stock advisers, etc.) don't want you messing around in their rich-man's game because it is a market that they used to control. Slowly, but steadily, more and more people are owning stocks... and for good reasons! The stock market is the best way to make money ever created, and it is totally open to the public. If you think you are too inexperienced to own stocks, think again! One thing that really benefits small investors is that they don't move the market. When you trade, nobody is going to see that impact... so you can basically sneak in and out of companies taking profits off the table left and right.

I want to see the age when everyone plays the stock market. I think that it is coming sooner than we expect. Not only is it a fun, gambling experience, owning stock will educate you in the ways businesses work! If an 18 year old student can figure this game out, you can too! ;)

2. The Stock Market Typically Goes Up Don't always believe the recession-doomsday hype. It is a fact, in fact, that throughout the history of the stock market, the average recession has seen S&P Index returns of +3.14% during the actual recession, and of +28.20% three years forward from the first warning signs of recession. The stock market has the ability to weather a storm, and it seems like the most brutal hit has already been served up...although we could fall a bit further. The point of the matter is that as long as you are investing in the right areas, you should be recession-proofed enough to make money regardless of the macroeconomic conditions at play.

3. It's Cheap and Affordable to Invest Now!

Over the past decade, tons of discount brokers have been cutting their rates to encourage you to use their services and invest. Equity trading has gotten faster, cheaper and easier than ever in the 21st century! There are services like Zecco.com that offer $0 commission fees, and more reputable and established brokers that charge a meager $7.99/trade. When considering you are probably going to be buying stocks that cost a total of $250-1000 per purchase, the commission fees are a blip on the radar.

These discount brokers (or premium if you are interested) offer fast, reliable services that basically do it all for you. I am with Scottrade currently, and they have programs they give you for free to research stocks, see what experts are saying, and they even track all of your taxable gains for you. It is easier than ever to sign up for an account and deposit as little as $500 to get on your way! Check out my "getting started" post for more information.

4. Potential Upside Outweighs Downside Risk

A lot of my friends at Penn State are hesitant to get into the stock market game. They claim they are "just not ready" or "too scared to make a first move"... I call this a load of garbage. Investing is not about letting it all ride on lucky seven. When you buy a stock, you own a piece of that company, if the stock price goes down, it goes down... but you shouldn't be losing any more than 20% of your initial investment at any rate. Your money is generally safe in stocks, so stop worrying and focus on the upside!

At this point, I want to bring up my portfolio's performance in 2008. At first, I was off to a horrendous start with everything trading down on poor news. As of late, everything has just about balanced out and I am actually sitting on a gain! I have stocks like Yamana Gold I have profited more than 26% on in a month, and stocks like NVidia where I am down 15.5%. The point is, you have your winners and your losers. Take the bad with the good and you have a favorable amount of upside compared to downside. If you play your cards right, you will see more money than surfing the internet could ever bring you.

5. It's Easy and People Want to Help You

I've mentioned just how easy it is to get started in the stock market. Stock brokers like TD Ameritrade, Scottrade and Charles Schwaub are practically throwing themselves at your feet. People want to help you nowadays, and it is so easy to get started you won't believe your eyes. If you don't know where to invest, turn on CNBC for an hour. Seriously. Jim Cramer? Fast Money? These programs are chock-full of investment ideas that are well researched. It simply becomes your job to look into these stocks a bit more to make sure they are right for you.

The internet can be your best investment friend. I suggest the Motley Fool for reading up on terrific stock opportunities. There are even bloggers looking to help you like the Intelligent Speculator and some guy named the Net Fool.

The Bottom Line: There is NO better way to get high returns on your investment than with the stock market. Whether it is high-growth risky plays you are gunning for, or established conglomerate powerhouses... almost any sound trading should make you money. Consider an initial $100 deposit gaining just 10% (you can do better ;) ) for five years... BAM! That's about $1,650. What if you added $100 every year to that one grand deposit? SHAZAM! That's a whopping $2,300. The magic is in the fact that when your stock value increases, you basically own more of that company, nominally speaking. Instead of making money on your $1000, you are making money on your $2,300! The possibilities are endless, and it is easier than ever to get in on the action. -The Net Fool

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Buying Penny Stocks is risky business and yet it can be very profitable. Huge stock market fortunes are made every day! Many of the more popular stock around were once Penny Stocks including Microsoft, Nike, and Walmart. A penny stock is a stock that is either priced for fewer than five dollars, or one-dollar stocks. Penny stocks are only traded on the over-the-counter (OTC) market. There are six steps you should take before buying penny stocks.

The first step is to get information by asking a broker for written data and recommendations on penny stock companies.

The second step is to find a good broker by doing some research about their history and their track record in investing. Also check to see if there have been any complaints made against them.

The third step is to keep good records. Ask your broker to send you a written copy of all predictions about the price of a stock and about the prospects for the company. Keep notes about each broker. Get other opinions about the stock and the company from people who should know including a banker, other stock brokers, and financial planners.

The fourth step is to use common sense. Question yourself as to why the broker is offering these to you. Remember, if something is too good to be true, it probably is.

The fifth step is to not be rush to make a purchasing decision. If there is not adequate time for you to check out each stock investment carefully, do not invest.

The final step is to satisfy any concerns or questions about any potential fraud that may be occurring with an offer that is made to you by contact state or federal securities regulators.

It is important to note that investing in penny stocks can bring you extremely good profits in a short time period but it can also result in huge losses in a short time frame also. This is due in part to the usually risks that are involved in trading as market forces operate and also due to the high number of fraudulent practices by those who are selling these kinds of stocks. Companies issuing penny stocks have no regulatory requirement to make their financial statements available to the SEC, thus adequate and pertinent information will be very difficult to come by which makes it truly hard to properly evaluate a stock.

Under normal situations investments in stock with potentially high returns over a short time frame tend to be risky, but with penny stocks this risk is greatly increased by the high level of fraud that occurs in trading these stocks. In recent times many investors have become more sophisticated and aware so there is less problems associated with these stocks. These days it is still possible to buy penny stocks and make a lot of money in the market. It is however necessary that you choose a broker wisely and employ your common sense. Remember that with big rewards there are also even bigger risks. You should also never invest more than you can afford to lose.

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Is it possible for people to really make a substantial profit using Penny Stocks, even to become millionaires? Certainly there are some people who make huge amounts of money with stocks, ordinary people who trade in their own time perhaps as a hobby rather than as a professional trader. It is very likely however that although they started on penny stocks they eventually moved up to other potentially more profitable stocks using larger sums of money once they felt they were more experienced, and had more money to spend. Of course the question then becomes how do you start making profits quickly in penny stocks with the least risk?

Before we answer that question, let us quickly define exactly what we mean by penny stocks. There are different precise definitions, but in general the phrase refers to low priced, highly speculative stocks which normally sell at less than $1 per share. They are very volatile and can rise and drop hundreds of percentage points in minutes, sometimes as much as 400%. This can of course be dangerous, but can also be extremely profitable if you know what you are doing.

Now that we know what penny stocks are, how can we quickly work out what to trade and when, to maximise our profits? Remember, normally only after we have made a number of trades using small low risk sums can we even think about making the kind of trades we need to make the big money quickly. In most cases traders simply have to put in the hours - and weeks and months and years - to become experienced in the market. Only after trading many times and analyzing the trends and results over a long period can a trader say he really understands trading stocks, and even then he will still lose on many trades.

However there are of course many shortcuts on offer. There are many "systems" available, ways to help you identify trends and profitable opportunities as they happen, but there are huge problems with most of them. The main problem is simply that any system still relies on analysing the historical trends, and this takes time and effort. However, there may be a new solution.

Two computer programmers have created a piece of software which performs scans of stocks looking for companies who are forming bullish trading patterns, ie their stocks are about to increase. This software records historical information constantly and learns more and more over time, and every week it outputs recommendations of stocks it thinks should be bought and sold. These recommendations are only made when the software is confident in the outcome, based on the huge amount of data it has analysed.

Of course, as with all stock trading, and particularly in the volatile penny trades market, not every decision will be correct, even the software cannot predict every possibility. But on average the software is reported to create gains of 105.28% per week, even accounting for the trade recommendations which do not work out. Could this be the key to making significant profits from penny trades without spending years as a trader? Apparently if someone had put $5000 on each of the recommended trades over 4 months last year they would have made $387,684 in profit.

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It seems to me, as a person who follows these things, that the stock market is not really sure what to do at the moment. One day it goes up a hundred, the next day it is down a hundred. The fundamentals of the market are very strong however the credit crunch is hanging over it like a dark satanic cloud, so how will the stock markets of the world perform in 2008?

I am a very positive thinker and am also a risk taker. I strongly believe in the concept of risk and reward and am a willing investor of stocks and shares. I am currently investing into various areas of the world on a monthly basis. This strategy is known as pound cost averaging and is very popular in these turbulent times. When unit prices fall you are able to purchase more units for your monthly premium etc.

At the back of my mind is the realisation that a stock market crash could be imminent and for that reason I am keeping in reserve quite a large amount of money which I will invest if such an event takes place. I am somebody who likes to invest on the stock market in the aftermath of a dramatic fall as I believe that most of these sharp declines are as a result of an over-reaction and because of panic selling on the part of novice investors.

If there is more bad news on an economic front such as a deepening of the credit crunch or a series of profit warnings from some of the major companies on the index then share prices may well fall. A major terrorist atrocity may also lead to a stock market crash. These are situations which could well happen and is the reason why I am keeping some cash back.

As already stated I am a positive person and actually believe that the stock market will end 2008 around ten percent higher than where it began at the start of the year. The market, in my opinion, is strong and robust enough to with stand the current problems and historically does well in the years when Americans vote for a new President.

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Hello ! In this article, I will answer the question "What is a Cheap Stock Broker?" When it comes to online trading, one can hardly go a day without seeing an ad on television for online stock brokers advertising that they have the best price and service available for just about any investor out there.

Scottrade, E*Trade, and TDAmeritrade ads all make claims to be a cheap stock broker.

Here I will show you that while these brokers are all priced below $10.00 per trade (if you meet certain minimum requirements), they are not necessarily a cheap stock broker. Any company has huge advertising budgets, a staff of stock brokers, and even local branch offices.

That can translate into more overhead and expenses for the company. More expenses mean more expensive products. All companies have to do something to offset overhead - - so they pass it on to you and me, the consumers.

Since you are reading this, I will presume that you are most likely interested in the original subject of this article: What is a cheap stock broker? More importantly, who are they, and how do I find them? You may not be so interested in who has the most branch offices or who has the most TV ads. While having the ability to go and sit down with the a real-life stockbroker would be nice, it will also have its cost. Of course, that personal, one-on-one interaction comes with a price. I am sure that I don't have to tell you that the cost of that interaction is passed on through a higher commission.

Making a stock purchase with the smallest commission possible is the name of the game. My thought is that a truly cheap stock broker is one that charges $5.00 maximum for each trade. Even better, and what do you know, there are actually a few companies that offer free trades. Now that is what I call a cheap stock broker!

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Discipline is a necessary skill for any successful trader or investor. You must be able to control your impulses and emotions when dealing with the stock market. Many traders recognize that discipline is essential to success, but they also admit that it is very difficult to obtain. So how do they maintain control?

The stock market is chaotic, unpredictable, and confusing at times. The uncertainty is what makes many traders / investors feel anxious and uncomfortable. The best way for someone to maintain discipline through all the uncertainty is by establishing a structured plan. Trading with detailed plans, including entrance / exit strategies and a target profit objective, helps you to be less affected by the confusion of the market. Plans bring structure into an unstructured world and the more plans you have to follow, the less uncertain you will usually feel. Your plan will help you maintain discipline easier than others.

Extensive training and practice also helps successful traders maintain discipline. A successful business person never accepts the idea that they have reached the peak of their success. They are always involved in education and training to help enhance their decision making skills. Do your homework and learn as much as you can, so you can buy and sell with confidence in your decision.

Disciplined traders / investors also have a huge amount of self control. They do not let their emotions take over during a trade, whether they are good or bad feelings. Panic or victory should never affect your decisions with money. In order to keep a balanced and unaffected outlook, your emotions should be the same on the worst days as well as on the best days.

An optimistic yet realistic attitude is also essential to becoming successful in buying and selling stocks. Trust your intuitions with the market at times, don't just buy a stock because everyone else is . This takes practice and attention to your mood. Never let your guard down and have trust in yourself when no one else believes. Any negative comments must be ignored.

Maintaining positive emotions, attitudes, and moods takes a great amount of psychological strength. The best way to maintain positive emotions is to be well rested and relaxed. It may be easier for someone to lose discipline and give in to a negative mood when they are tired.

Even though it may be difficult at times, maintaining discipline is absolutely necessary for a trader's / investor's success. Be sure to learn how to control your emotions and keep a positive attitude. This will help you trade consistently and profitably. Learning how to maintain discipline can help you not only in the stock market but in many other aspects of life as well. Good Luck!

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Beijing Capital International Airport Co.'s third terminal, bigger than all five terminals at London's Heathrow, opens today, helping the city expand its air-passenger capacity as it prepares for the summer Olympics.

The terminal, designed to evoke Chinese icons such as the flying dragon and the imperial capital's Forbidden City, is the world's biggest building, housing 1.3 million square meters (14 million square feet) of floor space, according to a release from the designer, London-based architecture firm Foster & Partners.

The Chinese government has hired architects from Europe and Australia to design marquee projects to present an international image in the lead-up to this summer's Games. The terminal, like most of the Olympic venues, was completed ahead of schedule.

``Remarkably, it was commissioned and completed in a little over four years, less than the time it took to organize and conduct the public inquiry for Terminal 5 at Heathrow,'' Norman Foster, one of the architects, said in a statement.

The terminal cost 27 billion yuan ($3.8 billion) to complete, more than double what the city spent to build and refurbish sporting venues for the games.

Beijing is investing more than $67 billion on infrastructure projects including roads, subways, sports stadiums and the new terminal ahead of the country's first Olympics. The games will be held Aug. 8 to 24.

City Image

Its 360,000 square meters of gold roof are intended to echo the imperial color used to top the buildings of Beijing's 600- year-old Forbidden City complex. Inside, skylights set into the ceiling allow natural light to illuminate and heat the interior.

Measuring 2.95 kilometers (1.83 miles) from end to end, the terminal will double aircraft stands and will enable the entire airport to handle 76 million passengers a year by 2015, according to the National Development and Reform Commission.

The facility will host 26 airlines, according to Beijing Capital International. The first six including Sichuan Airlines and Qantas Airways Ltd. will start using it immediately, while the rest begin on March 26.

The first passengers of the day, from a Shandong Airlines flight from Ji'nan, 200 miles south of Beijing, disembarked at 8:50 a.m., the official Xinhua News Agency reported.

``The new terminal will help change people's view on Beijing airport, known for congestion and flight delays,'' said Roslyn Ji, an analyst at Core Pacific-Yamaichi International Ltd. in Hong Kong. ``The capital's airport really needs more space.''

Extra Visitors

Beijing is expected to host an additional 1.5 million visitors during the Olympic Games. A third runway opened in October 2007.

The third terminal and runway will triple the annual landings and takeoffs to 600,000 aircraft, according to the airport operator. A metro line connecting the airport with downtown Beijing will open before the Olympics, the General Administration of Civil Aviation said in a statement today.

Construction took three years and nine months and used 50,000 workers, according to the National Development and Reform Commission. Nine villages and 10,000 people were displaced in the process, it also said.

The terminal will adopt an automated people mover system which connects buildings for the first time in mainland China, according to General Administration of Civil Aviation. With four- kilometer-long rails, the system is able to transport 8,200 passengers per hour.

Bloomberg

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China's $70 billion national pension fund will boost equity stakes in domestic companies and invest in the infrastructure industry, its chairman said.

``Many global pension funds are moving aggressively into alternative investments, but I'm bullish on real-economy investments and plan to boost our equity stakes in Chinese companies,'' Dai Xianglong said today in an interview in Suzhou, a city near Shanghai.

China's government is exploring the transfer of listed- company equity stakes to the National Council for Social Security Fund, or NSSF, as another source of funds for the pension agency, Dai said, without providing further details.

The fund earned more than 110 billion yuan ($15 billion) on its investments last year, giving returns of more than 30 percent, as stocks soared, Dai said. China's benchmark CSI 300 Index was the world's best performer in 2007 with a local- currency gain of 162 percent.

Improved returns will help the Beijing-based agency extend coverage to more of the country's 1.3 billion people, as their average age rises.

The fund invests in four asset classes: fixed-income, stocks, currencies and equity stakes, said Dai. The agency takes a ``cautious'' approach to stock investing and has no plans to lift its ceiling on buying equities, he said. He didn't give allocation breakdowns of the asset classes.

Low-Risk Investments

The pension agency said in September 2006 that it put more than 1 billion yuan into the 20 billion yuan Bohai Industrial Investment Fund Management Co. , the nation's first government- backed private-equity fund.

``China's infrastructure industry offers a lot of good, long-term, lower-risk opportunities,'' Dai said. ``Our main focus will be domestic since there's so much potential here.''

In terms of overseas investments, the fund will gradually expand abroad, Dai said. It had ``almost no subprime-related losses,'' he said.

In November 2006, the NSSF appointed UBS AG and nine other fund managers to help it invest overseas. NSSF had put $1.7 billion of its money abroad by the end of last year.

Global fund companies began competing to manage the money after the government dropped a restriction that limited the Beijing-based pension agency to domestic markets.

Dai, a former central bank governor, was named chairman of the country's social security fund last month.

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The age of technology has drastically changed how an ordinary Joe-on-the-street views stocks, stock trading, and investing in general. Your grandpa would have sworn by his stock broker's word. But no more. Why pay those outlandish fees, when we can get a quick on-line account, take a few on-line stock trading courses and trade on our own - online? And at 2 am in our jammies if we prefer!

That Was Then; This Is Now

It's only natural that the popularity of the low cost, fairly easy-to-purchase penny stocks would become enormously popular for those of us with normal-sized bank accounts. Consider these statistics:

In 1994, the Over-the-Counter Bulletin Board (OTCBB) traded a total of 3.02 billion shares. That was less than five percent of the total shares traded on the Nasdaq and New York Stock Exchange.

Fast forward to 2003! Now the annual OTCBB volume had skyrocked to 267.4 billion shares. Folks, that equals an amazing 8900% increase. That's what happens when information gets into the hands of the common people!

The difference in penny stocks, however, lies in dollar amounts. The average price per share in daily dollar volume in 2003 for OTCBB comes to about $.0.15 per share. The average price per share in daily dollar volume for the NASDAQ for 2003 averages close to $27.50.

Now you know why they are called penny stocks. It's just a nickname for lower priced stocks that haven't grown up enough to get on the big boards. On the other hand, they could be a bigger company going bankrupt.

Define Penny Stocks For Me

There's no real official definition for Penny Stock, but we can look at a few criteria.

The Price Per Share. Obviously this is going to be small. The SEC considers all stocks that trade for less than $5.00 per share to be penny stock. Most savvy traders you talk to prefer to keep their definition at less than $2.00 per share.

Bottom line, what is and is not considered a penny stock may depend on who you ask. The most reliable definition is that penny stocks are high risk, high reward investments. They are very volatile and unpredictable. And therefore, should be treated as such. There is a lot of money to be made in this market. But always remember - it's just as easy to lose. Let education be your first step.

Where They Trade.

Few would dispute that those stock traded through the OTCBB (or the OTC), or the Pink Sheets or the CDNX (Canadian Venture Exchange), are treated as, or considered to be, penny stocks.

Market Capitalization.

Market cap is simply the total trading value of the entire company. The value of each share of a stock, multiplied by the total number of shares outstanding, equals the market cap. For example, 15,795,000 shares of XYZ at $0.27 each, gives XYZ a market cap of $4,264,650.00. (That is kind of like saying that the company's total value is 4.5 million dollars.) In some cases, companies beneath a certain market cap (for example, less than $10 million) might be ranked, or considered, as a penny stock.

What are Pink Sheets?

First of all, it has nothing to do with what's in your linen closet. Pink Sheets were named for the color of paper the quotes were printed on prior to the electronic systems that we have today - around 1904 actually. A company named Pink Sheets, LLC (it used to be the National Quotation Bureau) publishes these info sheets in both hard copy and electronic format. (This company is not listed with the SEC nor are they regulated by the SEC.) This is like control central for following penny stocks.

The operation is much different than the big boards. Pink Sheets are created by market makers who work with individual stocks. They specialize in these individual stocks and their purpose is to keep the market fluid. In fact, they buy and sell out of their own account depending on what individual investors want or need. Essentially they maintain an ask or bid price, keeping the liquidity of a security intact.

Gains and Losses

Because of the low cost of penny stocks, the possibility of doubling your investment can be pretty high. I highly doubt that investors with stocks in General Electric and Wal-Mart are looking to double their money. In fact, they would be extremely happy to make a 10% return yearly. Penny stocks, on the other hand make their gains by the hundreds of percentages, and thousands, not by the tens. (Sounds pretty exciting, right?)

Keep in mind that the visibility of information and even the accessibility of operational results, is usually pretty dismal for penny stocks. The companies will have minimal revenues, unproven management, and often an unproven product or industry. On the other hand, there are OTC stocks that will go to great lengths to let the public know their every move. These are the exception rather than the rule.

If you like the lure and excitement of highly speculative trades, spend time familiarizing yourself with the terms and ebb and flow of penny stock trading. Then don't be afraid to jump in.

Look for my companion articles for more valuable information about penny stocks.

I've been dabbling in penny stocks for a few years, educating myself in bits and pieces. The other day I got a call from one of my old frat brothers saying he too was researching penny stocks online. In his search, he ran across a crazy story about two geeks who have created a computer robot that does all the analysis work. They locked themselves in a room with 12 computers all running at once to test the system. (Shades of college-age Bill Gates.) The results are staggering. Winning picks right and left. See what you think. These two guys are so sold on their product they are giving people $100 trading cash! (Oh yeah, they named the robot, Marl!)

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Trading penny stocks for the most part is highly speculative. It more resembles spinning the roulette wheel in Las Vegas than it is like trading on the Nasdaq. One of the biggest dangers is that it holds some of the allure and mystique of the Las Vegas casinos. You hear of huge fortunes being made and you want a part. And it costs so little to jump in. It's so easy!

You will hear of fortunes being made - because there can be some degree of hype in penny stocks, especially in some of the so-called penny-stock newsletters. Penny stockbrokers have been known to engage in a mixture of cold calling and targeted sells. Say they have a collection of leads made up of people who have a history of buying into poor investments over the phone.

Using this list they'll call just to make contact. Later, they'll call back with a hot tip. "This is a ground floor opportunity of a stock that's ready to skyrocket." Meanwhile they are pumping up the stock in message boards, emails, newsletters, etc. As soon as investors buy in, the penny stockbrokers get out, taking investments and commissions with them.

Some micro-cap companies will pay people to hype their stocks for them. They might use newsletters, emails, or financial television and radio shows. The best advice here is to look at all of these with a wary eye. Check to see if the issuers of the recommendations are being paid for their services. That's the first clue of a bad investment. Also check to see if there are any press releases put out by people attempting to influence the price of the stock.

Keep in mind that the moves in penny stocks are lightning fast. It's nearly impossible for this type of up front information to ever be accurate. One would need to watch the stock over a period of days, and be ready to "pull the trigger" on a trade in a short amount of time. And be ready to sell just as quickly.

The key is not to rely on the hype. Use the Internet to do your own private personal research. Learning about a certain micro-cap stock may prove to be somewhat difficult because they are not required to file with the SEC and thus are not as publicly scrutinized or regulated as stocks listed on NYSE or Nasdaq. There are also no minimum standards for them to follow to remain on the OTCBB and Pink Sheets.

There may also be a lack of history on the company. The company may be a penny stock because it is newly formed or because it is approaching bankruptcy. The company could have a very bad track record - or none at all. This lack of history also makes research somewhat difficult. Notice I said difficult not impossible.

Another point to be aware of is liquidity. By watching the movement of a certain stock, you can see if there are high or low volumes of trading. If the volume is very low, you may be ready to sell, but there will be no buyer. You might have to lower your price just to get it s old. Frightening position to be in, to be sure.

Secondly, low liquidity means a stock is easier to manipulate. This is done in a number of ways. One example is to buy large amounts of stock, hype it up, then sell it after other investors find it attractive. (Would it surprise you to know this is called pump and dump?)

The waters of successfully trading penny stocks are fraught with many dangers. Here are a few tips in avoiding the worst of those dangers:

1. Look for consistent high volume of shares being traded. Not only how many shares, but how many trades per day. Is it one insider buying? Or many small time investors like you and me?

2. How did you find out about the stock? Mailing list? Penny stock newsletter? Email list? High-pressure penny stock broker? Of course there are excellent, highly educational newsletters out there. But watch for the ones who are "pumping and dumping." Research - then trade. Don't just trade, then wish you had researched.

3. Have an entry and exit plan - and stay by it. Penny stocks move very quickly. Keep in mind that if you purchase a stock at $.12 and it declines 2 cents, that's a 20% loss. If your investment was $10,000, that amounts to a $2,000 loss. How many dips like that can you afford? Find out what a "stop loss" is and use it wisely to protect your investment and your profits.

4. The most important tip is this one! Never invest more than 20% of your overall portfolio in penny stocks. When that 20% grows then reinvest the profits. Let your investments grow in increments. Never put more of your capital at risk than you can afford to lose.

Look for my companion articles to learn more important facts about trading and profiting from penny stocks.

I've been dabbling in penny stocks for a few years, educating myself in bits and pieces. The other day I got a call from one of my old frat brothers saying he too was researching penny stocks online. In his search, he ran across a crazy story about two geeks who have created a computer robot that does all the analysis work. They locked themselves in a room with 12 computers all running at once to test the system. (Shades of college-age Bill Gates.) The results are staggering. Winning picks right and left. See what you think. These two guys are so sold on their product they are giving people $100 trading cash! (Oh yeah, they named the robot, Marl!)

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Here are some tips to get you started. Some of these may seem a bit obvious, but don't overlook the power of getting back to the basics. Put them into practice on a regular basis and you will be surprised at where they can take you.

Get the Big Picture - Don't settle for looking at just one chart. If you are considering buying into a stock, step back and make sure that you get a look at the big picture. Take a look at what the stock has been doing for the past 3, 6 and 12 months as well as where it is going now. This may help you to recognize the bigger trends and not to micromanage the stock before you begin.

Know When to Fold 'Em - Before going into a new stock, have the exit points clearly fixed in your mind. Know how low and how high you are willing to go before you sell and then stick to those points. Sure, sometimes it may go higher or lower but if you get out at a predetermined level it will help to keep you from walking away from the table limping

Never Panic - It is not always an upward ride on the stock market so make sure that you have your bases covered. Set limits for yourself to make sure that you don't trade too much in any one day. It can be a good thing but can also cause you to panic and not thing straight. Think over any trades before you make them, especially when the day is not going well for you. Above all, make sure that you don't full vest yourself. If you do this you will be more prone to panic if the market takes a turn for the worse.

Invest for Comfort - Sometimes, especially when you are first starting out in trading stocks, it helps to stick with a company that you know. All of us use items on a daily basis that we are comfortable with. This would include things like our shoes or perhaps the types of food that we eat. If you are comfortable enough to use them regularly then you should be comfortable enough to invest in these items. This can also help you when the market has not been good to you and you need to stop and lick your wounds a bit.

Above all, make sure that you know what you are doing. Take the time to get familiar with the market in general and whatever system or software you choose to use. Not only will this help you to be a better trader, it will help you to be a smarter one. Your comfort will help you be on top for the long run.

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A lot of people often wonder, "how do I actually buy stocks?" This question can certainly be daunting, as the stock market appears to be a rich mans game. This negative sentiment is a leftover from trading in the latter century. I affirm that buying stocks is easier than ever with the prominence of discount (and premium) brokerage services.

Buying a share of stock, whether it be common or preferred, seems like a daunting task to those who have never owned stock before. But to put it quite simply, stock is nothing more than a piece of paper resembling a portion of ownership in a company. Most big-time firms will issue stock in order to raise cash, so if they have cut up 100 shares and you buy one... you essentially have 1% ownership in that company! Cool huh?

Rather than buying the paperwork directly, most investors nowadays turn to stock brokers. What is a stock broker? Think about a broker as somebody who orders the shares you want, does all the paperwork for you, and keeps track of your money, your earnings and your losses.

Picking a Broker: Discount BrokersThe most popular option for investing today is through a discount broker. These typically have a low minimum deposit and low trading commission fees. Here are my favorite three:

1. Scottrade

This is the broker I use to make my trades. They are known for having the best customer service in the business, and very favorable pricing for beginning/intermediate buyers. Trades are all just $7, including stock options. The minimum deposit is just $500, so anyone can put money in. Plus, they are the only major broker that hasn't been hacked in the recent wave of phishing attempts. I trust them more than anyone else because they offer a sense of security. Customer service is very helpful and their trade execution time is apparently the best of all discount brokers. If you want to sign up, let me know so we can both get 3 free trades!

2. E-Trade

These guys have a lot to their name. Even after their own stock was hit hard last November, they have managed to maintain their customers and continue offering value. Minimum investment at E-Trade is $1000, still very low, and they give you 100 free trades during your first month. Your first 1,500 trades of each quarter are just $7, increasing incrementally after that. The company is stable, and you can definitely count on their security and reliability as brokers. I think that their rates aren't as good as Scottrade, but a terrific option nonetheless.

3. TD Ameritrade

This broker is a bit more pricey as far as discount brokers go. The minimum for a cash account is $2,000, but you get their excellent "StrategyDesk" tool as an incentive. Their current promotion is 30 days free trades + $100 back. Trades are just $9.99 every time you place an order. As far as discount brokers, TD Ameritrade is probably the most prestigious with one of the largest networks around. You may be paying a few dollars extra, but the service and quality cannot be denied. They currently offer an "asset protection guarantee" on all of your information and money.

Picking a Broker: Other Brokerage OptionsThere are some relatively new trading services that offer trades around $5 each like TradeKing.com and ShareBuilder.com, there's even the $0 fees from Zecco.com! In a nutshell, I would rather trust an established broker with fees than mess with the uncertainty from these super-discount brokers... but judge for yourself if you want the savings. Premium brokers are much more for the experienced investor, so I am not going to go into detail about them. If you are interested in higher-end services, I suggest Charles Schwab, which straddles the line between discount and premium services. In short, to trade stock you will probably want a stock broker to handle all of the messy paperwork for you. Choose your favorite, deposit money into your account, and start investing like a pro!

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