In the journey to becoming a proficient day trader, you will eventually have to decide what tools to use to your advantage. This is not easy when you’re also developing a style, risk profile, and learning about all the nuances of trading. However, the more you can narrow down your goals and recognize your trading strengths, the easier you can let your platforms and resources help mitigate your weaknesses.
We’ve cataloged a list of different brokerages, trading tools, and strategies to implement. Read more to find out which sounds best to help you improve your trading ability quickly.
Trading Platforms to Be Aware Of
The only tool absolutely necessary for trading stocks is a brokerage. These will house your trading platforms, and they all have different features that are conducive to certain styles of trading.
Some longer-established brokerages will offer more wealth-management advice, with their own set of investment opportunities, such as Vanguard and its respective mutual funds. With the surge in younger and more mobile traders, platforms such as Robinhood or Webull have exploded onto the scene. These apps allow for quicker trades and simpler execution, but have a little less infrastructure and security than their counterparts.
Disclaimer: While these are some of the most widely utilized platforms, StockAbility™ does not endorse any of them.
Here’s a list of 10 of the more favored brokerages in no particular order with a quick blurb about their top features
This diverse trading platform is famous for low fees, great ETF’s, and its customer service. The user interface is relatively intuitive, though trading is only moderate in terms of speed.
Vanguard offers some over the counter trading, though they do charge some foreign exchange and security fees. Additionally, their brokerage is well-known for its retirement accounts and broad wealth-management resources.
Similar to Vanguard, Schwab has become increasingly popular for not having any sort of OTC or foreign stock fees. This is good for investors looking into niche markets. Additionally, they have recently made their app more accessible and faster for traders on the go.
This is a more complex brokerage, but it also comes with a very powerful and efficient trading tool called Think or Swim. Think or Swim is a multi-faceted software that allows you to chart, scan, and trade at lightning speed. We recommend this for advanced traders.
Made famous for bringing easy trading to the phone, the user-friendly interface and quick trading are a benefit. Robinhood can experience some app difficulties at times, but otherwise its convenience is fantastic. Most importantly, Robinhood has brought user experience connectivity to trading via referrals, contests, and tracking public statistics.
A comparable platform to Robinhood, but a bit more advanced in its teaching tools, trade capacity, and user interface. It also has some great sign up and referral bonuses, which is uncommon and modern among brokers. For investors looking to learn quickly and have a fully mobile experience, we recommend Webull.
A dynamic brokerage in terms of being established, having modern practices, and great customer services. E*Trade is very intuitive for beginning traders and focuses on financial education and well-rounded risk management.
7) Merrill Edge
Known for their teaching tools and customer service, Merrill Edge does not trade as wide a variety as certain other platforms. They do offer referral and signup promotions, which many older brokers do not. Additionally, they are fully integrated with Bank of America, which is nice for prior account holders.
IBKR has gone to zero commissions and allows you to trade every type of exchange. The interface takes some getting used to, but once you have some experience there, it is a smooth platform that can execute trades quickly. Additionally, they offer fractional shares and a wide array of asset classes, making it a great platform for intermediate traders.
Known for their wealth management and educational tools, SoFi makes for a good blend of interactive trading and long-term investing. They offer career counseling and loan discounts, as well. One of the unique features they hold is the option to activate an automatic investing — you can use some of your day trade profits to auto invest if you are taking some time off, which is a useful tool.
So good we had to reference it twice. Think or Swim can be purchased as a separate subscription software without a TD Ameritrade account. It comes with Benzinga Pro (a lighting fast news source), and has highly efficient tools for day trading. It is not uncommon to pair with a different broker.
Think or Swim can be customized to work with almost any sort of software, operating system, or broker. It is truly the Swiss army knife of advanced day trading, but don’t feel compelled to use it until you have explored the basics first.
Any of these brokerage platforms can be customized for quicker day-trading, including hotkeys and secondary software. However, we recommend that you learn the basic functions of a brokerage so you are comfortable before turning the knob up.
Other important things to research for each of these brokers are their margin rate, their specific pattern day trading rules, and any other nuances that might restrict or enable your trading style.
Online Trading Risks and Rewards
It is commonly brought up that investing and holding is the safest way to build equity in the stock market, and it is often questioned if day trading is profitable. There is some truth to each of these, but we believe with proper education, emotional control, and utilization of tools, day trading can be extremely financially rewarding.
Given this, here are some common risk/reward propositions to consider when trading stocks.
What is the average day trader’s salary?
For those that qualify themselves as full-time day traders, the average listing is roughly $80,000. This can range from low five figures into seven figures, but what is important to understand is that these are the people who succeed and report earnings. There are no guarantees in day trading, and the majority of people lose money in their attempts.
This is not an effort to deter you from starting or learning; in fact, it is the opposite. We are solely advising that education and slow experience take precedence over rushing in with the expectation of immediate riches.
This phrase is a bit misleading, as brokerages need to make money in some fashion. This can be in fractional cents from each bid/ask spread on trades, margin interest, monthly fees, or using your data. While the prevalence of zero commission trading is largely good for day traders, it is not without risk.
This is the most straightforward risk in trading- there is no such thing as a given in the stock market. Even the best trades hit snags, and you need to be equipped to handle certain swings in any style of trading. As always, do not trade with money you cannot afford to lose.
Day trading is mentally taxing, takes significant time to learn, and money can be an emotional catalyst in either direction. Make sure not to overextend your mental and emotional bandwidth, and to maintain a healthy lifestyle while day trading.
There are myriad other factors to consider, and a great upside to learning day trading. Much like any other independent endeavor, the potential for financial freedom is there if you work hard and give yourself the best chance to succeed. The key is utilizing your proper resources and limiting your downside, which is where StockAbility™ can help get you set up.
Set Yourself Up for Success
The platforms and associated tools you use for day trading can make or break your experience. Especially as you are starting out, having an unwieldy or counterintuitive platform can influence your decision making when it should be focused on what to trade and when. Additionally, the learning resources you lean on need to be pointing you in the right direction, or else you will be treading water at best.
StockAbility™ has decades of experience in creating courses for stock trading success. We have traded through every type of market, advised a host of different trading styles, and can bring you the technical knowledge to profit. If you are looking to accelerate your education in investing and day trading, register for one of our online courses today — together, we can build equity well into the future.