Day trading, as the name implies, is buying and selling shares in the same trading session. Day trading is not something those new to the stock market should try, as it takes training, intuition, and knowledge and can still be a risky endeavor. The Securities and Exchange Commission (SEC) instituted the Pattern Day Trader Rule to protect consumers after the dot.com crash. The rule requires that you have at least twenty-five thousand dollars before attempting day trading. Choosing a day trading platform means knowing what features and price points are most important to the way you practice day trading. Low-cost trades are essential, but you also need a platform loaded with the features that help you day trade effectively.
Top 5 platforms for 2020
1. TradeStation—day traders love TradeStation for the commission-free trades on ETFs, Options, and stocks. TradeStation offers a wealth of features in both its web-based platform and its desktop platform, allowing you to access the platform any time and from anywhere. The platform technology offers numerous tools, including a customizable rea-time streaming watch list, Matrix which tracks ladder trading, and an optimizer designed to tests advanced trading strategies.
2. TDAmeritrade—TDAmeritrade has almost continuous offers for new customers, including commission-free trades and, at times, free cash for new accounts. One of the most popular tools, especially for those who are still perfecting their day trading craft, is the ability to do virtual trading with fake money. TDAmeritrade is an excellent place to start for those just entering the world of day trading. Traders do not have to worry about outgrowing the platforms, as it offers the advanced tools used by professional day traders, as well. You have the desktop platform, but you can also customize the TDAmeritrade app to have a quick look at the things you are tracking.
With TDAmeritrade, you can plot economic data, replay historical markets in a tick-by-tick manner, and create and conduct real-time scans of stock performance. One of the unique features offered by TDAmeritrade for day traders is the capacity to chart social sentiment, which experienced traders know is crucial for determining their own buy and sell signals.
4. E*Trade—E*trade was founded in 1982 and was one of the first online brokerage firms. That doesn’t mean the platform is outdated. Instead, the platform has invested in keeping abreast of new technology in the brokerage world and offers one of the best performing platforms in 2020. One of the strongest features is that the desktop platform is supported by two different mobile apps, making it one of the best platforms for mobile and options trading.
Given the long history in the business, E*Trade has had plenty of time to perfect their research tools and education. E*Trade works well for those beginning in day trading but remains a favorite of experienced day traders.
5. FirstTrade—This platform is a favorite among options traders, as there is no contract fee for the broker, which is not commonly seen in the crowded field of online brokerage platforms. FirstTrade also appeals to day traders because it offers three different trading platforms customizable to the trader’s preferences and a recently redesigned mobile app. Hence, the information you need is always at your fingertips.
6. Interactive Brokers—the platform offers two different platforms, the pro, and the lite. The pro version offers a favorite among active day traders because of the IB SmartRouting, which helps traders save money on each cleared commissionable order. It is one of the best platforms available in 2020 because it is designed for a truly global marketplace. The platform supports full access to 135 markets in 33 countries, dealing in 23 different currencies. All-day trading, on a worldwide scale, can be conducted from a single integrated account.
Day trading in 2020
From your very first trade, you will be competing against the very best in the field. Finding the right platform, and taking time to familiarize yourself with how the platform works, is crucial to success. Utilize the virtual trade tools that allow you to work with fake money as you build your strategy before starting your career as a day trader. Trades take only moments to complete, but the research that goes into each trade can take hours, especially in the turbulent markets of 2020. Day trading is a field of significant losses and substantial gains, often in the same day. If you are risks adverse, do not thrive on stress, and cannot afford to lose the money you are investing, you should probably avoid day trading. However, if you thrive on a challenge, like taking risks and can afford the potential losses, there is money to be made.