How To Chose the Best Trading Platform For Day Trading
Day trading was once an exclusive form of trading only available to large financial institutions and professional speculators, however electronic trading and margin trading has lowered the financial capital requirements to start day trading and opened up the doors of day trading to everybody with an internet connection.
Unlike Day trading where speed is an important factor, time and care should be taken when choosing a broker.
With day trading, one of the primary concerns should always revolve around the online broker itself, it is paramount that you go with a trust worthy and reputable broker and always choose one that is regulated by a respected authority such as the Financial Conduct Authority in the UK and CySEC in Cyprus.
On top of being a regulated broker there is some fundamental factors that need to be taken into account when find the best day trading broker for you. We have taken into consideration the main points that should be considered when choosing a broker for you and provided a list of some of the most popular online brokers around today.
10 Factors To Consider When Choosing A Day Trading Broker
One of the primary concerns for traders searching for a suitable broker should be to ensure the broker is registered and authorised with a relevant governing body. As a general rule, brokers who a regulated by a trusted regulatory body will clearly state this fact on their website.
For example, a regulated broker like AvaTrade, the website clearly states they are regulated by multiple organisations.
Customer support is seen as being a reliable barometer of the site in question. Is only a static “info@” email available or are there options such as telephone contact and a live chat widget? Those platforms that offer multiple avenues are seen as being the better choices.
Day trading is an extremely fast-paced system. Not only should the site be updated constantly, but the trader also needs to be able to enjoy an extremely streamlined central platform. All values should be clearly displayed and the “buy” and “sell” options should ALWAYS be present. One’s account balance and current profits need to be clear and every position needs to be quickly accessible. This can normally be determined by opting for a demo account (see below).
Also known as demo accounts, these are excellent ways for the user to understand the functionality of the site. Most of the larger day trading brokers will provide such an account as one of their options. However, it is wise to note that not all features may be available (such as advanced analytical tools). Still, opening a trial position will provide the insight necessary to make the correct choices. Sites which do not provide such an option are likely to be smaller and again, they should not be used.
Due to the fluid nature of day trading, many users will opt for automated trades as opposed to manually following many disparate positions. In other words, once a certain level is reached (or the resistance is crossed), the position will automatically be opened or closed. These levels can be preset by the trader and both novices and professionals alike use this tool frequently.
One of the best ways to hone one’s skills is to appreciate past performance. So, any day trading broker should also supply longitudinal data as a standard feature. As opposed to mere text, the best will use charts and graphs. The user can then select the time period that he or she wishes to observe. Most traders will provide the ability to see back at least as far as one year.
In this case, we are referring to how capital can be deposited or withdrawn. It only stands to reason that the most trusted payment methods should be used such as PayPal, TransferWise, credit cards and direct deposit into one’s bank account. As all of these (and others) will employ the aforementioned SSL encryption, personal details will remain secure. Along these lines, what are the withdrawal fees that are taken by the broker? These will naturally differ and comparing these amounts will enable the potential day trader to enjoy the best profit margins.
8.Access to Diverse Indexes
Even novice traders should have access to a large number of indices. While the major ones such as the Dow Jones, the FTSE and the NASDAQ should all be present, others including the CAC 40, the FTSE 250, the FTSE All-Share and even the OTC markets are considered important to view. This will enable the trader to diversify his or her portfolio and therefore, the aggregate risk can be substantially lowered.
Not everyone will have ten thousand pounds to invest in order to open a VIP trading account. Thankfully, the reputable providers will offer a number of different accounts. These can range from a basic platform to a “silver”, “gold” or platinum” status. While these names sound impressive, it is critical to ascertain which benefits each level can offer. For example, automated trades are likely to be possible with every account but only upper-level positions may be able to enjoy the free use of analytical tools.
Day trading is unique in the fact that a position can suddenly be “in the red” in a matter of seconds. So, it is apparent that fast information is all but essential to guarantee success. One of the lesser-known facts is that even real-time information can be slightly delayed. This has to do with the means by which the data is fed to the user. Some platforms will feed their data through one of their proprietary servers. This can take longer to be provided to the individual. The best brokers are those which allow this information to be sent directly to the user’s operating system. More streamlined access equates to a quicker reaction time.
Each of these features needs to be considered alongside all of the others. In simpler terms, there is no one single metric which defines a reputable and reliable day trading broker. Other variables such as how long the site has been in operation should be taken into account.