Best Online Brokers and Platforms for Day Trading (Top 10 Included)
The digital age changes everything, including trading of securities. In 1980, when the first PCs entered into living rooms, with “ping-pong” usually the only game stored on the computer, the Internet was still a long way off.
At that time, once purchased stock or securities were held for an average of ten years before being redeemed. Another ten years later, in 1990, the holding period had shrunk only 1.6 years, and in 2016 it is only six months on average before a security is sold again.
This is very closely related to the modern digital possibilities of today. Placing a stock order in 2018 and beyond is possible at any time of the day or night and from any location on earth, provided you have Internet access.
The right brokerage account makes things easier.
This makes relying on the right broker all the more necessary in trading. This article explains what is important to know about brokerage and what matters when choosing the broker. First, however, the answers to some questions most people may have asked themselves already.
Why is a online broker necessary?
It's about a lot of money and it's about trust. But while trust is good, control is better. That is why most of the countries where securities are traded extensively issue exchange laws.
These laws outline obligations under which securities may be traded on the stock exchange.
Also, while a broker is committed to these laws, not all brokers are the same. Of course, there is also over-the-counter trading in securities. But as shown in 2007 / 2008 this can have disastrous results.
At that time, over-the-counter trading of real estate certificates by investment banks led to a global economic crisis, the effects of which still affect many countries to this day.
Stock companies as well as investors gather under the umbrella of the stock exchange that ensures with its legally prescribed rules that trading does not get out of hand. Here the broker has the function of a vicarious agent.
What’s behind the term “stock broker”?
A stockbroker can trade in securities for others as well as for himself. The stockbroker acts only on behalf of business clients, trading from company to company.
A a stockbroker holds an accreditation for stock market trading.
This approval is subject to strict conditions that can be revoked at any time by the respective exchange or the stock exchange supervisory authority.
The lead broker determines the stock exchange prices for securities in floor trading. He or she determines the price of a security based on the trading volume.
Like a stockbroker, the lead broker requires an accreditation to exchange trading.
Is this the same all over the world?
The world's major stock exchanges, such as those found in Frankfurt, London, New York, Tokyo, or Beijing and Moscow, have long been committed to each other's standards of trading. This offers both companies and investors legal security.
But it’s different in global over-the-counter trading. While illicit securities trading is punishable in many countries worldwide, there are a lot of countries with a much more relaxed attitude.
In fact, many over-the-counter markets and the products traded resemble high-risk betting shops rather than trading in company shares or goods.
In these cases it does not matter if a lottery ticket is filled in and given away or an exotic stock is bought with promised dream returns. But a lottery ticket usually costs only a few euros and some lotteries support a good cause. Exotic stocks, however, have already completely destroyed many lives.
Finding a suitable broker
Today, many financial advisers offer their services as online brokers. It is important to know that a broker only mediates and always works with a bank or a financial services provider holding the accreditation.
Certainly, the broker provides various tools that allow, for example, tracking the price, but these are not the most important criteria. Crucial for a broker are the following points:
- Cost of the securities account cost
- Cost of the trading account cost
- Cost stock exchange trading
- Which products are offered?
- Which stock exchanges are traded?
- Is a demo account provided?
- Availability of the customer service
- Real-time stock market quotations
- System of payout
Especially for people who are dealing with securities trading for the first time, good customer service is of utmost importance. English should be the language of choice between client and broker.
Familiarizing yourself with the trading environment
After deciding on a broker, familiarizing yourself with the tools provided takes some time. A demo account is the best tool to try everything at leisure and without any risks.
When it comes to executing the first real order a checklist can be helpful. This can be a simple Excel list summarizing the following points about the order:
- Ticker symbol or name of the security
- The volume or number of papers to be dealt
- On which exchange does the trade take place?
- The starting price
- Term of the order or limit for highs or lows
While many brokers offer extra tools for their clients' accounts with similar features, it is still recommended to maintain separate lists of trade movements. It simply helps clarify your own situation in an easy way. In the broker's account, such information is often lost in the flood of numbers.
The information I provide is objective, well researched and, most of all, independent. I am not a financial adviser and you will have to make your own decisions. So, let us take a closer look at the very best online brokers and trading platforms of 2018 to make your search a little bit easier.
I am in the online trading business for more than 20 years. That's why I know exactly what I have to search for, what is important and what is not important at all.
Especially for those who are new in the business, it is highly important to make the right decision when, in the very beginning, they choose their brokerage trading platform.
A bad selection will lead to frustration.
And frustration leads to a lack of concentration that leads to making mistakes and, in the end, to losing money.
In my online brokerage reviews, you will see that I always did my investigations with the eyes of a beginner who is searching for the right trading platform.
Especially for beginners, it is indescribably important to focus on the right things.
So, it is just as important not to feel overwhelmed by all those big and smart promotional promises.
Every regulated and registered online brokerage has the right to be there.
When people start complaining about losing money because of their online brokerage, in most of the cases they made the wrong decision in the very beginning.
You may also say that they took the second step before the first.
Before you will open a brokerage account, you should better know exactly how and what you want to trade.
At the same time, you have to be sure of your own personal priorities.
About the "how you want to trade"
It makes a big difference if you are a day trader, a swing trader or an investor.
While a day trader needs execution in light-speed and the lowest possible rates, a swing trader has to be more flexible and an investor has to be focused on the capital strength of the online brokerage.
Let me give you an example.
Pattern day traders, as they are defined by the SEC, need to have a minimum amount of $25,000 in equity on their accounts.
Beside this, day traders have to be approved for margin trading – even if their broker’s account minimum is lower.
If their brokerage is located outside the U.S., they are regulated in a different way and the minimum is lower.
But other regulations may lead to other disadvantages.
So, please, be careful at this point.
There is a reason why the regulations were made as they are.
The SEC wants to protect the investors for a good reason.
It is a basic rule that the more money you deposit on your account, the more you should be focused on of the financial strength of the online brokerage company that you have chosen.
Because in the case of a bankruptcy, an account with a deposit of $500 may be a small problem.
But if it is your intention to let your investment work for you - with the focus on your pension plan -, a bankruptcy of your brokerage will cause you a lot more trouble than you ever could imagine.
So, when you consider the importance of safety, paying marginally higher brokerage fees is not always a bad idea.
About the "what you want to trade"
First of all, let me tell you the bad news.
There is no single online brokerage and trading platform that covers everything - from trading stocks, options and futures to trading forex and exotic financial products.
The good news is that there are really good trading platforms for all kinds of preferences a trader may have.
So, if you define clearly what you want to trade, it will be much easier to make the right decision when you choose your online brokerage trading platform.
If you want to trade stocks, search for the best online stock broker.
If you prefer trading options, - yes, search for the perfect options broker.
I know, this may sound very simple.
And yes, it is simple, but sometimes these simple things have to be mentioned to be aware of them.
About the "which extras are important to you"
Yes, free training resources are a big advantage.
But everywhere in the internet, you will find basic information about how to trade stocks, options, futures and forex.
We are not living in 1990 anymore.
There are great trading educators and trading tools on the market.
Just use the market scanners for an example.
It is amazing how many free and chargeable resources you will find out there.
Imagine, when I wrote about the best stock screeners, I had to mention 20 market scanners.
And I didn't even mention all those 3rd party trading software tools, like e.g., NinjaTrader, Trade Ideas and eSignal, with API connections to your brokerage account.
So, all the specific training courses that your brokerage platform may offer are an advantage, but your final decision shoulda not depend on the availability of means for education.
And, at the same time, it should not only depend on the trading tools, like e.g. stock screeners or charting programs.
If you need them, you can easily improve your rate of progress and your effectiveness by using 3rd party tools.
Now you may think: “Oh, no, this will cost a lot of time and money.”
But here you better ask yourself the following questions.
How much does it cost to study?
How much money does a company invest in your education for a job from 9 to 5?
It is exactly the same on the financial markets.
Your training is important and trading tools may help you to improve your skills.
Ask yourself what you already know so far, what you want to learn and where you want to be and make sure to choose the way that offers the highest effectiveness and efficiency.
Keep your stress level low and choose the right trading platform to make sure that trading the financial markets will be fun.
It doesn’t help you and your family if you are stressed because you are losing money and because you are focused on the wrong things.
Trading may be a tough business when you walk into the wrong direction.
Best Online Brokers and Platforms for Day Trading Summary
Securities trading has risen by a factor of 400 since the beginning of the 1980s. The stock holdings, however, has increased only about 24 times. This means that securities trading has long since become an instrument for making money short term.
Sure, old-age insurance is still a factor, but the Internet has made the financial market accessible to a broader public that no longer has to rely solely on bank-specific investment products often associated with high costs.
Simply put, securities trading has become more democratic – thanks to the Internet.
Now you know:
- how you want to trade
- what you want to trade
- which extras are important to you
Now you are aware of the fact that when you search for the best trading platform for your investments, there is more that matters than just the price.
The trading platforms below this are offering a good balance of pricing, customer service, products to be traded, educational resources and technology.
Now you are well prepared to make the right decision.
Best Online #Brokers and Platforms for #DayTrading | via @DAYTRADINGz
Below this, you will find the best online brokers with the detailed review for any major online brokerage.