What actually happens when you buy a stock: choosing a broker, funding an account, placing the order, and the costs that quietly eat small trades.
The mechanics are straightforward; it is the costs and the order type that decide whether a small trade is worth making at all.
A broker is your access to the market — you cannot trade on an exchange directly. Opening an account requires identity verification under standard know-your-customer rules, and funding usually takes a few business days to clear before the money is tradable.
If you intend to trade sub-$5 stocks, check two things before you fund anything, because brokers differ enormously here and most people find out too late: whether the broker permits OTC securities at all, and what it charges for them. Commission-free equity trading very often excludes OTC, where a flat fee per trade is common and can swallow a small position outright.
Choose your order type deliberately. A market order fills at whatever price is available, which on a thinly traded stock can be materially worse than the price on your screen. A limit order caps what you will pay and may not fill at all. On penny stocks the limit order is close to mandatory, and the reason is the spread.
The visible cost is commission. The invisible one is the bid-ask spread — you buy at the ask and sell at the bid, so a stock quoted 0.010 / 0.012 has you roughly 17% down the instant you fill, before the price has moved at all. The stock has to rise by that much just to get you back to even.
That single arithmetic point explains more losing penny stock trades than any amount of bad chart reading. Check the spread and the dollar volume before you decide a setup is tradable.
Trading guides on StockMarketWatch — the same material for large caps, with live data attached.