Best Brokers for Day Trading

Last Updated August 10th 2021
7 Min Read

During these highly volatile and uncertain times, financial markets are also undergoing unprecedented changes that impact all investors. There have been some changes in the online brokerage industry, which many investors are unaware of.

Speed, reliability, and affordability are the main factors that day traders look for in an online broker. They are seldom impressed by the features designed for long-term or infrequent traders. Day traders need reliable online brokers that can help them make a lot of transactions with no position at the start but close the trades by end of the day.

Here are Three of the Best Brokers for Day Trading:

Let’s take a closer look at them:

eToro

Based in the UK, this company founded in 2007 has over 17 million users spread over 100 countries, including the US. In the beginning, eToro was a graphics-intensive forex platform. However, it has adapted to the changes and has come up with tools for crypto trading. Non-US traders can trade additional asset classes such as CFDs and stocks on various exchanges.

eToro is best suited for traders with a basic understanding of forex and crypto trading. And, although the withdrawal fee was eliminated for US customers, a $5 fee is charged for non-US clients.

Who eToro Is For?

As mentioned above, eToro has a graphics-intensive platform serving crypto traders in the US while traders outside the US can trade on stocks and contracts for difference. The main feature of this platform is the ease with which an individual client can perform copy trading.

The eToro platform includes traders who can be copied and who follow risk-control rules. It means that the retail account holders can mimic the trade moves and trading strategies of the most successful traders automatically and in real-time. However, you should be aware that copy trading does not guarantee the same results.

Advantages of eToro

15 cryptocurrencies traded 24/7 with the US customers having access to Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and XRP.

User-friendly website and mobile app as they are almost identical, smartly laid-out with easy navigation

A good option for cryptocurrency traders because they can follow what others are doing, follow the recommendations of members who allow copying their trades

Disadvantages of eToro

Although there aren’t any explicit commissions, spreads for trading cryptocurrencies are relatively wide as trades are completed with specific spreads that vary from coin to coin

You need a minimum of $25 to buy any cryptocurrency. It means it might be difficult for smaller accounts to spread their balances over a larger number of coins

Although copying trades is possible the relatively high minimums required for most copy trading is $200 or more for each copied trade

Serviceability

It is easy and simple to open a new account online. However, after submitting the required information, it might take several days for the completion of identity verification and operating the account. US residents can open an account for $50, while the amount is $1000 for almost all non-US residents. eToro employs Plaid to connect a bank to your trading account. But, in non-US countries, it allows the use of credit cards and other options such as PayPal, Rapid, Neteller, Skrill, Transfer, iDEAL, and Sofort, among others.

Trading

Trading on eToro is simple. You just have to click on the “Trade” button while viewing the coin on your watchlist. Use the “Buy” button on your portfolio listing to buy. You can click or tap a drop-down to select ”Sell” to sell a coin. You can close the whole position or just part of it, especially if you purchased it in different lots. However, you cannot sell a portion of a single lot. So, if you buy $50 of Bitcoin and wish to sell it, you will have to close the entire transaction and not just $25 worth or so.

As a user, you can create customizable and sharable watchlists using mobile apps. However, there are fewer analytical capabilities on mobile apps when compared to the website.

Although eToro offers 17 cryptocurrencies to US residents, there don’t offer any short sales, options, fixed income, or mutual funds. Furthermore, order types are limited to market orders and no conditional orders are available, although stop-limit orders can be placed while opening the following trade.

Also, once a position is open, it is possible to set a stop-loss, although you cannot do that during order entry. However, non-US customers can set a buy rate, stop-loss, and profit from opening the position.

eToro’s charges depend on your location and the asset classes you trade. Transferring a cryptocurrency out of eToro into your wallet incurs a charge. There are minimums for each coin.

In short, eToro offers newbie cryptocurrency traders an attractive and easy platform until you gain enough confidence on your own.

Don't Miss: 10 Steps to Becoming a Day Trader

Interactive Brokers

Interactive Brokers offer day traders investment opportunities in a wide array of instruments on a global level to access around 125 markets in over 30 countries. They also offer the widest range of order types and a multitude of analysis tools to help you discover your next trading opportunity.

Their central platform for day traders named Traders Workstation (TWS) platform has excellent features. Although some platforms have better features in a particular type of trading, the overall quality of trading experience offered by TWS across the same number of markets and instruments is excellent. TWS is one of the most customisable platforms, but the learning curve is pretty high.

Interactive Brokers collaborated with TD Ameritrade for better range and flexibility of their charting tools. They allow you to trade directly from a chart and to customise the charting views to almost any situation. Interactive Brokers acquired this category for day trading because their overall asset pool is much larger.

Advanced day traders get better utility as they can get more from it. Back testing and all the other tools for the implementation of multi-layered trades with contingent orders are present. Furthermore, TWS scores highly when it comes to monitoring your entry and exit. Both of them are critical to trading success. There are third-party algorithms to fine-tune your order selection. The algorithms offer you control on how a position is entered or exited. It facilitates minimisation of slippage or maximisation of speed as the case may be. Interactive Brokers offer one of the lowest margin interest rates.

Advantages of Interactive Brokers

An unmatched range of assets can be traded and the number of markets you can trade them in

A strongest overall platform for day trading with customisations and tools suited even for the most sophisticated traders

Allows fractional share trading, a feature lacking in some other platforms

Disadvantages of Interactive Brokers

There is a nominal fee, which makes it costlier than some other platforms

Streaming data is possible to one device at a time, which could affect traders with a multi-device system

The learning curve is high

Check Out: How Much Money Can I Make as a Day Trader?

Fidelity

Fidelity is the best low-cost day trading platform. Active Trader Pro is an outstanding free platform for trading that adds value for a typical day trader. Fidelity does not charge fees on stocks, ETFs, or penny stock (OTCBB) trades. No-fee stocks and ETF trades are common. However, no-fee penny stocks are relatively rare even today.

Fidelity holds the edge in the firm’s order execution. Over 96% of Fidelity orders occur at a price that is better than the national best bid or offer that results in cost savings for day traders. If you wish to keep your costs as low as possible, Fidelity is perhaps the best brokerage for you.

Advantages of Fidelity

The costs are low, with its exceptional order execution

Fidelity has an array of excellent research and screeners

Active Trader Pro is a flexible and powerful trading platform in terms of functionality

Disadvantages of Fidelity

Fidelity does not extend futures, futures options, or cryptocurrency trading

Traders looking for in-depth research may have to use the web platform in addition to Active Trader Pro

Read Also: 10 Day Trading Strategies for Beginners

How do Day Traders Use Their Online Broker?

Day traders might place their trades manually or set up an automated system to generate orders on their behalf. Observing factors such as trading volume, price volatility, liquidity, and breaking news is vital for success in day trading.

Day traders favour brokers that charge per share instead of per trade. They also need real-time or live margin updates and buying power renews. Brokers afford their day-trading customers the ability to enter orders quickly by customising the size of trades.

A key consideration for day traders is the quality of the trading platform. It influences the execution speed as well as price quotes. They need flawless data feeds for error-free information. Most brokers offer speedy trade executions, although slippage continues to be a concern. Day traders should test how long a platform takes to execute a trade.

Some of the top concerns for day traders include commissions, margin rates, and other expenses. If a day trader consistently beats the market, and if it exceeds the cost of commissions, he will earn profit from the positions. If you are a high-volume trader, commission costs could amount to hundreds and thousands of dollars each day.

Day traders should consider several factors such as customer service and the broker’s financial strength because small brokerages can go out of business.

Conclusion

Day trading requires time, skill, and discipline. With ample practise and consistent performance evaluation, you can improve your chances of beating the odds. Your broker can help in achieving your day trading goals.

eToro – Best Trading Platform for Day Traders 

etoro broker

eToro have proven themselves trustworthy within the industry over many years – we recommend you try them out.

67% of retail investor accounts lose money when trading CFDs with this provider.

Read More:

Forex Vs. Stocks: Top Differences And How To Trade Them

How to Day Trade Stocks in Two Hours or Less (Extensive Guide)

Blueprint for Day Trading Stocks with $1000 (or Less)

How to Day Trade Forex in Two Hours or Less (Extensive Guide)

Day Trading Secrets: Top 10 Trading Secrets For A Successful Trade

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    67% of retail clients lose money when trading CFDs with this provider.