Penny Stock Trading Advanced Strategies PDF (eBook)

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Trade Like A Pro With Zecco

This guide is neither affiliated nor endorsed by Zecco Trading, Inc. 2

Introduction

For as long as the stock market has been around, only select investors could get

access to trade. You either had to have enough money to afford a seat at the

market or you had to have the right connections to have someone represent you.

These representatives – calling themselves "full service brokers" – would advise

you what to buy and what to sell and when to transact. They would look over

your portfolio and make assumptions about your risk tolerance and time horizons

and advise you accordingly.

The problem is, they wouldn't talk to you daily. They were profitable only when

they had several clients so that kept them busy. And many were paid based on

the transactions they performed instead of on your own financial well-being.

Then something changed.

Two fundamental shifts in the industry grew occurred around the same time:

First, the internet rapidly disseminated information, turning once-unknowing

investors into savvy investors. Second, the internet made "do-it-yourself"

investing available to everyone through self-directed discount brokers. The result:



Smarter, better informed investors now had access to the markets in a way they

never had before.

Trade yourself. Trade successfully.

And that's where Zecco fits into the picture: They offer investors a way to take

control of their own investment portfolio and trade directly with the market, and,

they educate investors to make better trading decisions. In this guide, you'll learn

more about trading successfully with the wealth of resources and tool that Zecco

offers.



Why Zecco?

There are many discount brokerage services available to investors. So why do

many investors choose Zecco?

• Sign up for free

• Fast sign up allows for faster trading

• Ability to link your account to an existing bank account

• Ability to transfer existing brokerage accounts to Zecco

• Access to a variety of trading (stocks, mutual funds, forex, options)

• Trade at an attractive per-trade price (even free in some situations)

• Up-to-date information and real time trading allow for as fast as possible

action and reaction

• Easy-to-use, intuitive trading interface allows for fast, enjoyable trading

• Cutting edge stock screener that helps investors perform insightful

research quickly

• Access to valuable instruction and education so they learn how to invest

more proficiently (including stock alerts, newsletters, reports, strategy

builders, tax optimization, and more)



• Amazing customer service when needed to minimize downtime and to

enjoy a seamless experience

• Member of FINRA and SIPC

• Accounts are SIPC insured

• Participate in the Zecco Community of traders to learn more about

investing and to uncover opportunities you might not have heard of

To get started, visit: Zecco.com




Getting Started

Signing up

Signing up to Zecco is very simple. It costs nothing to start and takes just a

moment to open. US-based investors require a Social Security Number to join.

Foreign investors will need to meet additional requirements.

1. Go to Zecco.com

2. Click the open account link

3. Choose a username, password, security question

4. Fill out your personal information, including country

5. Complete the profile

You can print out the application for your records at any time.



Funding your account

Once you've opened your account, you'll need to fund it in order to start trading.

You can link a bank account, pay by check or wire transfer, or even transfer an

existing brokerage account to Zecco. To pay by check, make your check payable

to Penson Financial Services and include your Zecco Trading Account number in

the memo line. Send checks to:

Zecco Trading

PO Box 60670

Pasadena, CA 91116 USA



Your Account Overview

Everything you need to do is available from your main account page (pictured

below).

Navbar

Use the Navbar to navigate to important parts of your account. Explore gives

you overviews of basic investing categories and trading opportunities on Zecco.

Trading gives you access to the dashboard you will use to buy and sell



investments. Quotes and Research is where you'll go to find and investing

investments to by and sell. Tools gives you various tools to build strategy and

uncover investments. Community links you to a dashboard where you'll interact

with others. Forex links you to the dashboard to buy and sell foreign exchange

investments1.

Trading Center Menu

While your main screen gives you an at-a-glance look at the

information in your account, this menu (pictured at the left)

gives you one-touch access to deeper account-related

information.

So, if you want to know what stock positions you hold, click

Positions to get the list. If you want to know what your

account balances are, click Balances. If you want to know if

an order has been filled, click Order Status.

Trading Center

The main portion of the screen (pictured below) gives you an overview of your

entire account and gives you the ability to quickly find stock information and

trade.

1 We won't be covering the more advanced Forex market in this ebook



At the top of the screen is a fast order input screen so you can buy or sell right

from there. (More about that in an upcoming chapter). Below that is the Total

Account View, which give you an overview of your account value and cash

balances. Positions gives you an at-a-glance look at what you are holding.

Order Status keeps you up-to-date on orders that are waiting to be filled. To the

right is the Snap Quote, a quick way to do research.

Each of these sections gives you an overview and you can access to further

information through left-side Trade Center Menu.



Research

The foundation of all good investing lies in research – finding investments that

match your risk/return preferences and learning more about them. Zecco makes

this easy with the Quotes and Research button and the Tools button on the

Navbar

The Quotes and Research page gives you access to:

• Top performing investments

• Market sentiment charts

• Most-held equities among Zecco users

• News

• Events

• And more

The Tools page gives you access to tools that help you identify, analyze, and

monitor stocks or educate you. Tools include:

• Screeners

• Quotes

• Strategy builder



• Portfolio analysis

• Zecco streamer

• Alert Center

• Education

• Retirement planning

Doing Research

When you find an investment that seems interesting to you, go to the Stock

Screener and type the name of the company or the symbol2 into the research

line.

The resulting screen will give you a detailed analysis of the business. We have

typed "GOOG" into the research line and the Snapshot for Google looks like this:

2 A symbol is usually a 3-letter or 4-letter short-form that the stock market uses to represent an investment. "GOOG" is the symbol for Google. "JNJ" is the symbol for Johnson and Johnson.





At the top is an at-a-glance view of the stock price, the range over the past year,

as well as a bearish or bullish overview3. Then two large and interactive charts

give you historical price and stock activity information and compare Google with

the performance of its peers. On the right is company highlights and other

valuable information financial information (called "fundamentals"). News,

company profile, and analyst ratings round out the details.

By looking at this one screen, you can get a lot of information about a stock and

you can base a buying or selling decision on:

• Whether analysts are bearish or bullish

• What the stock has done in the market

• How healthy the company is (based on its fundamentals)

• How the company is performing against its peers

• What news has recently been released about the company

3 "Bearish" is a reference to downward movement and investing experts who are bearish on a stock mean that they are more likely to sell it. "Bullish" is a reference to upward moment and investment experts who are bullish on a stock mean that they are more likely to buy it.



Buying and Selling

Buying and selling is so easy on your Zecco and it can take place right from your

main account screen (pictured below).

You'll notice that the top-most section of your screen has a dashboard allowing

you to perform a transaction. Transactions you are most likely to perform are Buy

and Sell (although Short and Cover are also available4).

4 Shorting and covering are an advanced form of trading that should only be attempted by someone who is already comfortable with more traditional buying and selling of stocks.



Buying

Let's use an example to show you how it works:

Step 1: Select the transaction type. It's a dropdown menu but Buy (pictured) is

the default.

Step 2: Choose your quantity. Although you can choose any number of stocks,

most investors trade in 100 share increments. We have chosen 100 shares for

our example.

Step 3: Indicate the stock. Write in the symbol of the stock you want to buy. We

have selected Google (Symbol GOOG).



Step 4: Choose your order type. A market order, which is the most common

type of order, is an order to buy the stock at what the market is offering to sell the

stock for. There are other types of orders and we will talk about them in an

upcoming chapter.

Because we have chosen "market order" as our order type, Limit Price and Stop

Price are not relevant to this trade and their boxes are greyed out and

inaccessible.

Step 5: Choose your duration. There are two different durations to choose

from. "Day" (which is the default) means that the order is good for the rest of the

day that that stock market is open. If you can't buy the stock by the time the stock

market closes for the day, the order disappears. "GTC" (which means "Good 'Til

Canceled") is an order that will remain until it is filled, even if it takes a few days

or weeks.



Step 6: (Optional) Choose AON. The last checkbox, labeled "AON" stands for

"All or None". This is an optional box that you can choose to check if you want.

An order that is checked "All or None" means that the order will only be filled if all

of the quantity of stock can be purchased. If the entire quantity can't be

purchased then the order won't fill. Conversely, if the box is not checked, the

order will be filled with as much as can be bought in those parameters, even if it's

just a fraction of the quantity you asked for. In our example below we have

checked the box.

Step 7: Preview order. Preview your order (pictured below). If all of the details

are correct, click "Place Trade". If you want to change something, click "Cancel".



Selling

Selling works in exactly the same way. Obviously, in this case you would need to

have the stock in your portfolio in order to sell it. But you simply go through the

similar steps.

Select "Sell" from the transaction type. Input the amount you want to sell (you

don't have to sell all the stock at once; you can sell it in smaller amounts if you

prefer. Select the symbol of the stock you want to sell. Select the order type from

the dropdown menu. Select the duration. Optionally click the "AON" checkbox.

Preview your order and click "Place Trade" if it is correct.

If you know how to buy, you know how to sell!



Buying and Selling Order Types

So far you've seen how to buy or sell a market order. In this chapter we'll look

briefly at the different kinds of orders and why they might be the kind of order

type you'd prefer:

Market orders

Market orders fill the fastest because you are simply going along with whatever

the stock market is offering as a price to sell you stocks or buy it from you. If you

choose to sell something "at the market", and the market is bidding $5.50 per

stock, it means that you will likely sell your stocks at $5.50 each.

Limit

A limit order is the maximum amount you want to buy the stock for or sell the

stock for. Investors use this type of order to put a cap on how much they are

willing to spend or get for a stock. For example, if you have a stock that you're

interested in buying and it is currently trading at $15, you can place a limit order

for $20 and the order will be filled at any price between $15 and $20. This is a

good technique to use in volatile stocks where you want to place a trade but the



price is moving rapidly, or where you are trying to build up a position and you are

willing to buy within a certain price range.

Stop

A stop order is a buy or sell order in which you indicate that you want to sell at

certain price or better. For example, if you see that a stock is selling for $10 but

you want to buy it for $8 or less, you can place a stop order for $8 and if the

stock reaches that price, it will trigger the order and you will buy your stock for

that price. (If it does not reach that price, your order will not be filled). Likewise, if

you own a stock that is currently selling for $15 and you want to sell it

automatically at $20 or higher, you can place a stop order of $20 so that if the

price touches $20, it will trigger the order and sell at that price (or higher).

While a stop order might not always be filled, it is a good way to make sure that

you get out with a nice profit or you cut your losses, especially if you are not

always going to be near your computer. Some investors place stop orders on all

of their stocks as soon as they buy them in order to automate the sale. (Just

make sure that you choose "GTC" as the duration so that the order will remain in

effect until it is filled).

Stop Limit

A stop limit, as you can imagine is the combination of the two order types above.

In effect, you are creating a "window" in which you are willing to buy or sell a



stock. The limit-portion of the order creates the outside price and the stop-portion

of the order creates the inside price.

For example, let's say that you want to buy a stock. The stock is currently selling

for $10. You don't want to buy it yet but you want to buy it if it starts to achieve

some upward momentum so you set a stop limit order. The stop price is $12 and

the limit price is $20. Your order will start to be filled once the price reaches $12

and it will continue to be filled up until the price reaches $20.

Trailing Stop

A trailing stop is way to help manage your profits. Remember that a stop order is

an open order that is "triggered" when the stock price reaches a specified point.

A trailing stop is a type of stop order that moves in conjunction with the market

price.

Let's look at an example: If you buy a stock for $20 and you set up a regular stop

order (which you read about above) for $15 (just in case the price goes down and

you want to get out with some of your money still intact), you might feel good

about stepping away from your computer for a short time. Should the price drop

to $15, your order will be filled. But let's say that the price doesn't go down.

Instead, it goes up to $50. Your stop order is still for $15! You're not ready to sell

it yet but you also don’t want to sell if the price plummets to $15. If the price

drops from $50, you might want to get out with some profit.



A trailing stop order is the answer. A trailing stop is an order that trades at a

percentage of the market price. So if you have a 20% trailing stop order in place,

the price can drop from $50 to $45 (that's only 10%) and nothing happens but if

the price drops from $50 to $40 (20%) it triggers the sell order. Let's say that the

stock doesn't drop to $40 but continues to climb up to $100. Your trailing stop

order continues to "trail" behind the market price so just in case the price drops

20% from the market price, the order will be filled and you'll protect some of your

profits.



Wrap-Up

Thanks to the internet, stock markets have never been more accessible to

investors. Today, investors don't need a full service representative to advise

them. They can educate themselves and invest according to their own interests.

Zecco makes it easy with its robust, helpful tools and intuitive user interface. You

can join Zecco without knowing very much about the market at all and within no

time you'll be trading like a pro!

Check them out at: Zecco.com


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