Best Online Brokers For Day Trading

Day trading is not your average trading gig. It takes a lot of active monitoring, and a really good understanding of the stock market and trading platforms. Keep in mind that not all platforms out there will allow you to day trade, and there can be substantial risk to doing so. 

That being said, some people have been very successful with day trading, and if you’re up for the challenge, it might be a good fit for you. But in order to do so, you have to carefully choose your platform for success. 

Day trading typically requires a very active approach, and you will probably have high transaction levels. Look for platforms that support the activity, have reasonable fees, offer a robust trading platform, and provide you with really good research tools as well. 

Take a look at these best online brokers for day trading to help you get started.

What Is Day Trading?

Day trading is exactly as it sounds. This is the art of buying and selling the exact same security in a single day. If we look at the official definition from FINRA or the SEC regulatory agencies, you see the same details. FINRA says buys and sells in a single day in a margin account. 

The SEC provides the same definition, but they also define a pattern day trader.  This definition is someone who executes four or more day trades within 5 business days. It takes a lot of work and focus to be successful at day trading. 

You also will likely not be able to day trade in just any brokerage account, unless you have excess funds available to cover the buys and sells. In most cases, you will need an approved margin account. Accounts are not immediately provided margin, and it typically has to be requested or applied for. 

This is because you are trading against money that isn’t technically there when you place the trade, in a sense.

Margin covers that within certain limitations. 

Day trading is simply trading actively and quickly, buying and selling shares within the span of one day. Yes, when you are day trading you will buy some shares at the start of the day and by the time the day is done, you have sold those very same stocks.

What is the point of day trading? Doesn’t it make more sense to hold onto your stocks for a longer amount of time instead of buying and selling within a few hours? The trick to day trading is that you make small gains with each and every transaction that you make. The hope is that at the end of the process, your net gains will add up to significant sums. 

The 5 Best Online Brokers for Day Trading

Now, check out these day trader broker options.

1. TradeStation

If you are getting into day trading, you want to have a lot of information. Information is key to choosing the right stocks to buy and the right number of shares to purchase. And, thankfully, TradeStation is great for that.

TradeStation has a lot of information, researching, educational tools, and other charting tools that will help you make solid projections and give you good estimates of how your stocks are going to respond to the day and when you should be pulling your investment. 

Visit TradeStation

One of the best things about TradeStation is that it comes with streaming data that is both accurate and easy to read. The accuracy is very important but you can rest assured that all the data is right and you can make an assumption and a move based upon it without worry about it being wrong. 

TradeStation has gone to great lengths to make sure that everything it posts is right and the data is second-to-none with TradeStation.

Their latest platform is called TSgo and it comes with no commissions on all US-based trading equities. You can also use the platform for any type of stock, including penny stocks. But you should keep in mind that you have to pay a small premium for options trades. 

Via TradeStation, you can create, test, tweak, and use multiple strategies and can also use their third-party tools that will help you make the trading experience even easier and less stressful.

Day trading is all about having information and moving quickly and TradeStation knows that. That is why they have done so much to give you plenty of reliable data and tools that allow you to stay up to date and trade as quickly as you need.

2. Interactive Brokers

For years now, Interactive Brokers has been one of the most popular online brokers on the market and it now has a legion of followers.

People rely on Interactive Brokers for a number of reasons and each of them are enough to woo any type of day trader, including the type who is just dipping their toes into this sort of investing.

Visit Interactive Brokers

Interactive Brokers has a customizable platform that comes with hundreds of watchlists and algorithms and you can add up to 450 columns to your interactive dashboard, giving you a lot of access to so much data at one time.

You can also access up to 120 technical factors when it comes to charting too. That sort of in-depth data will also give you in-depth analysis too. This means that any sort of day trading move you make will be based upon research, data, and formative analysis and information.

The thing that keeps people coming back to Interactive Brokers often is the fact that it offers users wonderful and very accurate market scanners. This means that anyone who is using this broker will be able to stay up to date with the market. 

You can have up to the minute information about your stocks, meaning that you will never be out of the loop or even a few seconds behind the latest information. 

If you’re into automated trading, you have come to the right place with Interactive Brokers.

Automated trading has become all the more popular over the last few years and its inclusion at Interactive Brokers is very welcome. With automated trading, you can set up the sort of options that you want and the system will carry out the trade when the time comes. 

The brokerage has always put emphasis on keeping their fees very low while also helping all users carry out their trades quickly. They have followed through with the promise of bringing these things to their expanding customer base.

3. TradeZero

TradeZero actually has a lot of options for users but it has been putting a lot of precedent on making new platforms for its customers lately.

One of these new platforms, ZeroFree is a great way for users to make their day trades. Its premium platform, ZeroPro, is better but of course it requires that you pay more, including with fees. It also comes with a monthly fee that you have to pay in order to use it.

TradeZero gives customers level 2 quotes and provides their users with great insight and a lot of information when it comes to market depth, momentum, liquidity, and more. 

Visit TradeZero

TradeZero also labours to make sure that the execution speed of any trade is quick.

This is very important because day traders are all about making sure their trades go through in the shortest amount of time possible. 

Those who use TradeZero are able to gain access to direct routing once their accounts hit a certain amount. Until that point, anyone will be able to use a variety of useful tools to help them make the right choice on the market. You can look into chart patterns, graphing, and a lot more via TradeZero’s tools.

Customers get great margins and leverage rates with TradeZero and they also get access to a wonderful and robust mobile app and a real-time streaming service that provides up to the minute business news about the market. All of this together means that TradeZero is a one-stop-shop for anyone who wants to pursue a life of being a day trader.

4. XTB

XTB is a well-known day trader online broker because it has a high range of tradable assets to choose from. This empowers clients to have an exceptional array of assets so that they can trade whatever appeals to them at the time. You have access to more than 2,000 global markets through this online broker.

With XTB, you also don’t have to worry so much about excessive costs that present a major burden to your trading practices. This is extremely important, especially with day trading.

Visit XTB

Minimizing costs will be a valuable trait for this site, so that you can avoid excess like high commissions, or even wire fees. 

The trading platform here is known as xStation 5. It’s a nice platform, and the company designed it themselves. It’s a top-notch trading platform that offers a lot of powerful information for you to work with. Trade execution is incredibly quick, which is another important aspect for day traders. 

You will also have access to plenty of support, research, and tools so that you can always make informed trades. The interface is easy to use and read if you are familiar with market charts and numbers. You can even see these charts on the trade screen tab if you want to. 

For residents of the UK that are looking to day trade through XTB, you can appreciate the ability to have a maximum leverage of up to 30:1. This is almost unheard of, so it gives you a ton of flexibility for your trading. 

If you like to closely watch the market, you can create your own charts, follow plot patterns, and take advantages of the resources here to monitor anything you want to. Watch for patterns, utilize the indicators, and set yourself up for success as much as possible. 

You can use XTB from your mobile device, or you can use it from a desktop. The platforms are similar in both places. You can also filter in a variety of payment methods, including e-wallets.

5. Fidelity

Fidelity is a fan favourite platform when it comes to day trading. This has a lot to do with the promotions to set up a new account, but also with the £0 account minimums, and £0 trading fees for certain stocks and ETFs.

They have a multitude of options, and they do allow day trading on the platform once you are approved.

The downside would be if you need broker assistance before making your trades. While the trade fees are £0 on many things, those broker assistance fees can be fairly expensive.

Visit Fidelity

They have amazing customer service, but customer service cannot provide you trading expertise in most cases. 

Their mobile app is one of the best out there. It’s insanely user-friendly, so you can track stocks all day and place your trades with ease. Through the years, Fidelity has come a long way, and they work hard to come up with ingenuous features and capabilities for their customers. 

The investment tools you will have available to you are incredible, with simple charts, graphs, and insights to follow. All of these tools are designed and updated by specialists, so you have the best information at your fingertips. 

One thing to check out here are the margin rates.

Since margin is often needed for day trading, this is something to look at. Fidelity offers the lowest published margin rates, which are currently just 7%. Margin isn’t always required, but it’s definitely a detail you should keep in mind for increased buying power when you need it. 

At Fidelity, you can choose their traditional platform, or you can upgrade to their Active Trader Pro solution. The Active Trader Pro has some additional features and technology that are more suitable to day traders, but it will not be a free account so that’s something to be aware of. 

What Are the Risks of Day Trading? 

Day trading is considered to have much higher risk than traditional trading. This is because your potential for loss is much higher throughout the day. You’re making large numbers of trades, and it’s all based on predicting the market. 

The thing is, you won’t make a big chunk of money on every sale, but rather small profits on every sale that add up. The risk is that you won’t make any money and might actually end up losing money instead.

It might be better to allocate a small percentage of your portfolio to day trading, while keeping the remaining percentage in a more conservative to moderate strategy. 

What are the Rules of Day Trading? 

It’s a common misconception that day trading is illegal, but that is actually not true. However, it is monitored, and if you are actively day trading, you might find certain restrictions that you have to adhere to. These restrictions apply to pattern day traders, as we defined from the SEC above. 

The requirement is to retain a specified amount of equity within your account, which is $25,000 (£20,000) according to the SEC regulations. Even if you are not a consistent pattern day trader, once you are classified as one, you will likely remain that way.

You can work with your brokerage should you cease day trading and need the equity limitations lifted. 

Final Thoughts

Day trading is not for everyone, and it should be done with caution. However, that doesn’t mean that it isn’t a possibility for some people.

If day trading is something that interests you, these online brokers for day trading are conducive to the activity. They have simple platforms, exceptional research, and reliable services to help you be as successful as possible. 

Be sure to look at all of the details before you make a final decision. Choose a platform that will work for your needs and expectations. Always pay close attentions to fees, costs, and margin requirements. 

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