Some people think that successful day trading is based on some killer strategy. They think that successful traders hide some secret sauce that they whip out every now and again to rope in the dough.
Yes, strategy plays a big part in successful day trading. But that’s not the whole story!
When you get on the internet to day trade, you need more than a winning strategy and a fast connection. You need low friction and good resources as well. This usually translates to low fees and a lot of research/information at your fingertips
There are lots of trading platforms out there, from Ameritrade to E-Trade to Ally Invest. But they all have their advantages and disadvantages.
There are a numerous differences, including:
- the cost of trades;
- the minimum investment amount; and
- the amount of research available.
So how do you pick a day trading platform that is right for you as an aspiring day trader? An ideal trading platform:
Supports high volume trading
Day trading requires a lot of trades per day. You’re looking to get in and out of positions at double quick time to take advantage of quick swings in the market.
Trading volume is high, so you need a platform that can handle lots of trades without charging you lots and lots of fees. To be very clear: you’re not looking for some platform that’s good enough for general investing. You want one that has the 1) infrastructure to support time-critical trades and 2) one that charges you low fees per trade so that you don’t break the back.
Frequently updated information
In addition to the points above, you want a platform that can bring you (literally) up to the minute information that you need to make informed decisions about trades.
Day trading is all about finding stocks to trade. You need to be able to locate and identify those stocks that allowed you to profit on a daily basis. Research is a very huge part of that. Platforms like Ameritrade and ETrade have research components that allow you to find stocks that give you a chance to be profitable.
Putting the factors to the test: Ameritrade vs E-trade
Both platforms charge a fee per trade that can add up on your ledger. If you get charged enough fees, that can really eat into your profits. But finding a trading platform with low fees is a challenge that you just undertake if you want to make money as a day trader.
One of the best things about Ameritrade is the lack of a minimum opening deposit. Most other online brokerage platforms require a minimum deposit. With Ameritrade, you can start with as little as $50 or $100 and start trading right away. That can allow new traders to get online and start trading right away.
Ameritrade has a powerful suite of research tools that traders can use to investigate stocks and sectors of the market. Research reports that give a full picture of a company’s fundamentals and financials. It offers a whole host of investing reports and it also has a bevy of premium reports that can be purchased for an additional fee.
You can trade on a desktop and a mobile device. In fact, the mobile trading platform for Ameritrade is valuable asset for the brokerage. You can trade pretty much any stock or security on a phone.
The Thinkorswim platform from Ameritrade also has an “On Demand” function that allows traders to test out trades or ideas without risking actual money. The ability to that on a regular basis quickly and efficiently is usually considered a premium feature by other interactive brokers, but Ameritrade offers it for free.
Conclusion: It’s a balancing game
Research and tools are a very important part of any day trading platform. However, many platforms can only afford to provide you with such facilities by charging you exorbitant fees. The onus is on you to pick a platform that can help you keep your trading fees under control.
All this so that you can use the trading platform to its fullest ability.