Bad Penny Stock Brokers What You Need To Know!
Bad Penny Stock Brokers Exposed
Look, life is hard enough.
You don’t need a trusted advisor robbing you blind.
Unfortunately, many beginning penny stock traders get taken by less than honest stock brokers. As a matter of fact, we wrote about a firm that was fined a million dollars for not protecting their customers who were trading penny stocks.
Bad penny stock brokers are everywhere.
The sad thing is a bad broker may be dishonest or he just might not know better.
Look, the fact of life is this, everyone in the world needs to eat and feed their family. And brokers make money when you trade.
It’s as simple as that.
If you just stick your money in an account and do nothing, your broker doesn’t get paid a cent. He gets paid when you trade.
Notice he doesn’t get paid when you make money… only when you trade.
So your broker is wired to encourage you to trade… and if you don’t trade, he’s just wasting his time.
So he wants you to trade and trade and trade.
And that’s why bad penny stock brokers push bad penny stocks. They have no vested interest in if you make money or lose money.
Now I know what you’re thinking… you believe if you lose your money, you’ll leave the broker, and that costs him dearly. That’s partially true.
You see, these days a broker spends most of his time looking for assets. He’s cold calling, pressing palms, handing out business cards… he’s always looking for that next big investor.
And if you leave, it might hurt a little, but he’s got a pipeline of other investors he’s trying to rope into his pack.
Have an honest conversation with any broker and they’ll tell you the same thing.
Remember, I’ve spent the last 20 years in the markets… I know far too many brokers. And they’re always looking for investors to fill their books. You’re special to them as long as youre making trades and he’s making money.
So how do you protect yourself from a bad broker?
4 Tips To Protect Yourself From Bad Penny Stock Brokers
I can see you thinking about this question.
I use a broker… how do I protect myself?
Tip 1 – Get Educated About Penny Stocks
Learn everything you can about trading and investing. Get some experience because there’s no better teacher than experience.
Trade some penny stocks (don’t use a lot of money or this education will be expensive), learn from friends and family who invest in penny stocks. Sign up for newsletters and industry magazines like PennyStockResearch.com.
We’re constantly publishing information about the penny stock market and how to make more money.
Read books on the subject… read new ones, read old ones, read about traders in different markets like commodities, futures, and options.
Learn about different trading styles and strategies.
Then once you’re done learning about the penny stock markets, go learn some more!
It’s important you get knowledge and advice from people who know what they’re doing and have a track record of success.
Educate yourself, learn, and use that grey matter between your ears.
Tip 2 – Know Whats Important and Whats Not!
This is a big step as you learn about trading and the markets, you’ll start seeing the billions of bits of information floating all around. You’re going to need to learn what’s important and what’s not.
Knowing what information to ignore is more important than what information to pay attention to!
Let me help you with an easy one… don’t EVER blindly follow tips (even from your BROKER).
I don’t care who gives you a tip… your dentist, doctor, your kids school teacher, your brother-in-law, your broker. Ignore what they say because you’ll only hear them brag about their big wins, never their losses.
You have no idea why they’re investing or what they’re trying to accomplish, or where they got the idea from. Consider this… they might have found their hot tip from a scam artist and you’ll just become another victim!
Just do yourself a favor and don’t follow hot stock tips .
Tip 3 – Do Your Own Penny Stock Research
The third step to protecting yourself from bad penny stock brokers is to always, always, always do your own research.
If you have a broker giving you recommendations, always pause and do a bit of research.
Ignore their pleas of urgency.
Remember, your broker makes money when you trade so he’s trying to get you to buy or sell something FAST. When he makes a recommendation, pause for a moment, and do a bit of research.
Think about what he’s recommending.
Look up the company financials… read their website review, their SEC filings.
Spend a few days or weeks reading up on these penny stocks your broker recommends and make sure you’re investing in GOOD solid quality penny stocks with great business models, financial stability, and strong management teams.
Dont just trade because he asks you to!
Tip 4 – Fire Your Broker
The best way to avoid dealing with a bad penny stock broker is to not use one at all. Learn to manage your money and trade it yourself.
Don’t rely on an overpaid broker to try and stuff you into bad trades.
Sign up online for a trading account and use the web to place your orders.
If you skip out on the bad advice from your broker, you avoid bad advice from brokers all together and that’s the best way to protect yourself from bad penny stock brokers!
Profitably Yours,
Penny Stock Research
Category: Penny Stock Alerts, Penny Stock Tips
