Day traders use day trading platforms, software and apps to actively trade, analyze charts, and evaluate the profitability of specific trading strategies. The needs are more complex than with investing. Level 2 quotes, market routing, short locates and intraday backtesting capabilities are utilized.
But what is the best day trading software for beginners, and what platforms are worth it? I have written multiple posts about my favorite stock screeners, day trading brokers, options analysis programs, trading journals, and research tools, and below, you find an introduction to my favorite day trading platforms.
Besides outlining the features and trading costs, I’ll also link to all relevant resources where you can compare multiple products of the same trading software category in more detail.
1. Interactive Brokers – Best Day Trading Platform International
Interactive Brokers has the best API for automated trading. Clients can build custom trading apps, integrate trading to existing front-end applications, develop commercial trading software solutions and access stocks, options, futures, currencies, bonds, funds and more in 33 countries across 150 markets.
Interactive Brokers offers several different trading platforms for traders and investors. Their flagship trading platform is the Trader Workstation. It is an excellent platform for active investors and traders seeking a flexible user interface with extensive customizable features.
In addition, their IBKR GlobalTrader application for iOS and Android is perfect for novice investors looking to expand their portfolios overseas. Finally, they recently released the new web-based IBKR EventTrader platform, which lets investors and traders trade their opinions on “yes or no” questions using CME Event Contracts.
A significant benefit that they offer is their extensive range of order routing capabilities, with over 100 order types and algos, from basket orders, all or none, dark ice, bracket orders, hidden, if touched, market, limit, and sweep to fill orders to scaling capabilities and more.
Another advantage of Interactive Brokers is the fully integrated paper trading account. New traders should use this tool for a couple of weeks to get used to the platform by placing orders with simulated cash.
Interactive Brokers offers two pricing plans for clients: IBKR Lite and IBKR Pro. IBKR Lite caters to retail investors looking for commission-free trades on U.S. stocks and ETFs, while IBKR Pro caters to active traders looking to achieve the best price execution with each trade at a low cost.
IBKR Pro clients can choose between fixed and tiered commission structures, where the commission on U.S. stocks is between $0.0005 and $0.0035 per share for tiered pricing with separate exchange fees. Alternatively, users pay $0.005 per share for fixed pricing (including exchange fees).
2. Trade Ideas – Best Day Trading Software for Stocks
Trade Ideas is the best day trading software for beginners in the category of the best stock screeners. It is an all-in-one solution with market scans, charting, real-time alerts, backtesting, simulated and live trading, market news and education.
Trade Ideas users can scan and filter market data for over 500 trading-related data points. The combination of all those filters allows you to create thousands of combinations.
The most popular scans are the gap scanner and the momo-scanner, but Trade Ideas also offers more than 20 pre-configured scanner layouts.
The market data subscription costs are already included in the monthly pricing, and Trade Ideas recently expanded the set of functionalities.
For example, the artificial intelligence based stock screening algorithm identifies trade opportunities based on proven strategies. The generated trading signals and scans are available for subscribers, and every trade is tracked.
Once a strategy is identified and tested, the strategy can be traded manually based on the stock screener results or by using the API for automated trading.
That makes Trade Ideas an excellent day trading software solution. Beginners will also enjoy the free trading room and free educational components Trade Ideas provides.
3. Black Box Stocks – Best Day Trading Software for Options
Black Box Stocks is a great choice for day trading beginners who want to join a day trading community combined with day trading education and analysis software for stocks and options.
Black Box Stocks grows fast and provides free trading education for their subscribers with workshops on various day trading topics.
Black Box Stocks is one of the best apps for day trading and provides a pre-configured stock screener with proprietary algorithms that rank the trade alerts in real-time.
One outstanding functionality is its unusual options activity scanner. It scans the options market for unusual activity and separates between normal option block trades and the more interesting category options sweeps.
The scanner results can be exported and analyzed further to develop a trading strategy based on the results. Black Box Stocks is an excellent decision for those starting with day trading. Even one month can clarify if the day trading path is right for you.
4. Edgewonk – Best Trading Journal to Import Day Trades
Edgewonk is the best trading journal app, where traders can import all their trades to EdgeWonk and analyze them intensively.
The stock market and financial markets, in general, offer many opportunities to day trade. A trading journal lets you analyze thousands of trades, and you will likely identify the most profitable strategies and trading methods.
Why should you proceed with trading strategies that generate no income in the long run? There is no reason to do that, and Edgewonk helps you identify the best strategy and trading methods.
5. Commission-Free Trading Platforms
If you are still with me and made it down to this section, you may wonder why all those trading platforms, such as TD Ameritrade, E-Trade, Robinhood, Webull and TradeStation, are not mentioned yet while other sites feature them in the top spot.
All of them offer free commissions for U.S. stocks, but the question is if something for free can be that good for the investor’s pocket.
All day trading brokers in this list are direct-access brokers with specialized day trading platforms, order routing capabilities and level 2 market data. They all charge reasonably low commissions, but they exist. In exchange for the commission, your orders get routed to the stock exchange directly without delay.
On the other hand side, online brokers like TD Ameritrade and Charles Schwab charge $0. How is that possible?
Those retail brokers still make money even if they do not charge commissions to clients. That’s because they sell the order flow to 3rd parties. That means your order will not be routed to the stock exchange or market maker once you click a buy or sell button.
Instead, it gets routed to the 3rd party order routing systems first. In exchange for providing liquidity to the 3rd parties, the broker receives compensation via payment for order flow.
Best Day Trading Platforms Summary
The best day trading software for beginners is Trade Ideas, followed by Cobra Trading as the best trading platform (direct access broker) and Black Box Stocks as the best day trading program for options (with education, tools and chat rooms).
Trade Ideas continues to innovate the day trading software sector, while Cobra Trading leads in all brokerage-relevant categories (costs, trading platforms, support), always slightly better than the competition. Black Box Stocks knows how to convince with state-of-the-art options analysis tools, including dark pool and unusual options activity scans.
Speed matters to day trade successfully, but all of the mentioned trading software solutions require a paid subscription. It is a realistic estimate that recurring subscription fees of $300 monthly for data feeds, charting software, day trading tools and day trading software are needed.
A day trading stock screener like Trade Ideas and breaking news feed like Benzinga Pro help spot market movements early. But, of course, institutions use those tools, and that is for a good reason.
Retail online brokers are an excellent choice for buy-and-hold investors, but most retail brokers can not compete with the execution speed day trading brokers provide. A pattern day trader often executes hundreds of trading per day, with a much higher trading activity than an average investor. It is also helpful to immediately reach the broker with a phone call instead of waiting longer when using a retail broker.
The decision about the chosen trading platform also depends on user experience, trading activity and pattern day trading eligibility. To day trade, pattern day traders must maintain a minimum of $25,000 in their trading account.Guide
Finding the best online brokers for day trading is easier said than done. There are many dependencies to think about before making a decision.
Trading strategies, type of stocks to trade, the pattern day trading rule, trading costs, paper trading platforms, the minimum deposit and supported financial instruments are just a few examples.
Day trading involves risk, and you need trading experience to become successful using analysis tools, an advanced trading platform, technical indicators for technical analysis, a pattern day trading account and good day trading strategies to become profitable.
Here are the things to consider on how to choose a day trading platform and a broker.
$25,000 Day Trading Account Minimum Balance
Day trading means that you buy and sell securities like stocks on the same day. If you do it only 3 times in a 5 business day range, you can even day trade with small accounts. But real day trading means trading thousands of shares with hundreds of orders per week.
As defined by the Securities and Exchange Commission, you need to have a margin account and maintain an account size of $25,000. Otherwise, your account will get locked for day trading activities. How much money do you have?
Outside the United States, things are different in some countries. Still, if you open an account with a broker in the United States, then you have this hurdle in front of you and handle it by providing and maintaining sufficient funds.
Trade Frequency
Stock trading, options trading and futures trading can be done with any broker. But it makes a massive difference about the best day trading platform for you if you either plan to trade frequently or not.
The more you trade, the more likely you will use the best direct access broker to route your orders based on the trading strategy used for your favorite stock exchange. Active, experienced, and professional traders often go this route.
That’s because even using a stock trading platform in the retail brokerage segment will not serve your expectations about order execution speed.
On the other hand, if you do trade less often and prefer to have online trading platforms with some trading tools to analyze the stock markets or buy mutual funds and exchange-traded funds, a brokerage account with a retail broker does the job well.
Do you want to short stocks? The best brokers for short selling are direct access brokers since they have the largest list of easy-to-borrow shares and a better chance of locating hard-to-borrow shares for a reasonable price.
Retail Online Brokers vs. Direct Access Brokers
Retail brokers like TD Ameritrade and Robinhood offer zero commissions. But they will sell the order flow from client orders to third parties. Direct access brokers route your order to your preferred stock exchange or ECN. Investors often decide on the retail broker, while day traders focus on high-speed executions using direct market access.
Benefits of Day Trading Software and Platforms
Automated day trading software is a powerful solution for experienced traders. Automated day trading software eliminates potential human error when trading strategies and executing trades.
In addition, automation helps to reduce stress and keeps emotions out of the trading process.
As a result, traders often see better performance, a more relaxed mind and more time for further analysis and strategy development.
Risks of Day Trading
According to various statistics, most day traders lose money by buying and selling stocks on the same day. Independently, if a mobile app or more advanced trading tools are used, and no matter what online broker or market makers are involved in trade executions, it can be expected that only 25% make it through the taunting process of becoming a successful day trader.
Often mentioned reasons for failing are the over usage of margin trading, high-risk options trades, undercapitalization, high stress levels and high-risk investing in assets such as penny stocks are frequently mentioned.
The risk of day trading is there, and it can’t be denied that this risk exists. That’s why it is important to start day trade activities on a paper trading account or simulator and only make the transition to real-money trading if there is success with paper money.
Day Trading Brokers
Day trading for beginners can be challenging and requires clear commitment. Day trading is more demanding than a 9 to 5 job, and a budget of $25,000 is needed to start day trading as a beginner.
The trading frequency will probably start with about 10 trades per day and can go up to an average of 300 transactions per day or more.
The best online day trading software programs offer charting, real-time data, technical indicators, and pre-defined trading strategies with good profit potential.
Retail brokers like TradeStation, E-Trade and Interactive Brokers offer their clients API access to route orders from external signal-giving tools directly via the brokerage API to stock exchanges like Nasdaq and NYSE.
Good trading software has integrated hotkey trading or mouse-click trading. A direct access trading platform like Cobra Trading or the LightSpeed Trader is more expensive but provides instant trade executions even for higher-sized orders.
Day Trading Platforms
A day trading platform the best online brokers offer is fast and provides unfiltered tick data. Most big retail brokerages have implemented the majority of the best indicators for day trading within their tool.
The data centers are often near stock exchanges like Nasdaq and NYSE. Stock traders enjoy level 2 or even full book access like Nasdaq total view with the full market depth and real-time data.
Trading Platform Types
A trading platform can be web-based or software installed on your personal computer with a desktop platform. Most trading platforms have integrated analysis tools, low cost or even free market data.
The profit potential of a trading strategy increases with the speed of trade execution.
Investors who feel they need clarification about whether day trading is the right decision consider using a stock market simulator first that supports day trading with real-time tick data.
Costs per Trade
Retail brokers offer commission-free trading, forcing your order to go a pre-defined order route. If you want to trade stocks commission-free, you must accept that the broker may match your order in-house or sell the order flow to a third party. With a low frequency of trades, that might be okay.
If coded algorithms in C# or EasyLanguage for automated trading are preferred, using such an online retail broker can be beneficial. Day trading brokers charge about $0.005 per share traded or a fixed commission per trade.
With higher trade frequency, the costs per transaction may go lower, and you can also negotiate your rates.
