Selecting an online broker is a decision that should not be taken lightly. However, what might be the “best” trading platform for me, might be horrible for you. In other words, you’ll have to do your homework to find the best broker for day trading, but here some questions you should be asking while sifting through candidates.
It’s not always about commissions.
Keeping your costs down is very important for any business venture. But make sure you are not sacrificing (money-making or money-saving) features for “cheap commissions.” For example, Platform A offers cheap commissions but you are not allowed to create “hot keys.” On the other hand, Platform B is a little bit more expensive but allows you to create “hot keys.” Speed is critical if you are trading volatile stocks, and if you are day trading, that means you are probably trading a volatile name.
Find a broker whose platform has “hot keys”
Speed Is Key
You need to be able to quickly cancel an order, change your order size, hide orders, and route to various exchanges. How smooth, and how effortless can you change from symbols, charts, and order types.
What extra’s does the platform have?
What kind of charting does the platform offer? Is it decent enough to use or will you have to pay for another charting package?
Of course, if you are not one who trades off charts, you’ll have other questions. What kind of news or research does the platform offer. For example, the thinkorswim platform from TD Ameritrade offers a live squawk. That’s useful if you trade off news or catalyst events.
Does the program allow you to set alerts, create your own filters, or automate your trading?
Let your trading decide what is important
Some traders like trading penny stocks, while others look for low floats that have had exponential moves higher to short. Does your broker do a good job of locating stocks that are hard to borrow? If this is one of your core strategies, then you need to know this stuff. If you are an active trader and prefer to scalp, then commissions are high on the priority list. However, if you are not an overly active trader who looks to take large chunks from a trade, then commissions might not be the most important thing on your list.
As you can see, the best broker for day trading really should fit your trading goals and style. Some traders who do upwards of a million shares per day need to be trading direct market access, and receiving exchange rebates in order to make their strategy viable. Others don’t trade as much and would prefer that the platform provides research and breaking news.
Best Broker For Day Trading – The Final Take
The best broker for day trading has no clear cut answer. That said, most brokers allow you to demo their platform. Free does not always mean better. And low rates doesn’t always mean better. Figure out what you need for your trading to be successful and find the right broker for you.