Selecting the best penny stock broker online is absolutely key to your long-term success with penny stock trading. Your broker will play an important role in helping you find and execute micro-cap stock trades in a crisp and accurate manner. But how do you determine who is the best penny stock broker online?

Different brokers for different traders

Honestly, it’s not that easy because brokers and brokerage fees are constantly changing and what you personally need to be successful with nano or micro cap stocks may be very different than what someone else requires. You should read my full review of over a dozen different penny stock brokers online. But for now you need to understand how to select the best online broker for your situation.

If you really know what you’re doing and have been studying micro-cap stocks for quite some time, you probably don’t want to lose a good percentage of your profits to broker fees. But don’t just rely on this desire to be thrifty to make your decision.

If you are new to trading penny stocks, you should initially consider paying a little more for a full service broker. They can help you learn the ropes and develop good habits for trading nano-cap stocks. Sometimes the best online broker is not the one that can provide you with the cheapest service, but the one that can guide you towards good habits in the long run. Services like Fidelity and Charles Schwab provide excellent full-service brokerage options online.

Discount brokers for experienced traders

Then maybe a few months later you can connect with a discount broker like Zecco or E*Trade. These give you the functionality to run your micro-cap trading without a lot of the research bells and whistles (although both services are growing and evolving, providing more and more research tools). Over time, you can make a lot of money with these discount brokers simply because each transaction fee is 5 to 25 percent less than what you might pay through a full-service broker.

No matter who you choose, you absolutely need to work with one of the best penny stock brokers online. These brokers are connected to the latest information from Pink Sheets to OTCBB. They establish and maintain relationships with market makers and other third parties that are simply not available to you.

But if you’re new, again, don’t skimp on penny stock brokers. Don’t let a slick sales pitch convince you that a newsletter or software “bot” will give you all the winning picks and you just need to execute them. That, my friends, is snake oil.