If you’ve been wondering how to find a day trading broker, this article is the one for you. We will discuss everything from where to start to what steps you need to take and what you can expect.
How to get started
The hardest step on a new project is the first real step. Researching and finding inspiration goes a long way, but actualizing a goal is harder than it seems. Though finding a day trading broker is a good way to start day trading, there is another step that can be helpful to complete before that, namely finding a strategy that caters to your needs.
Finding a strategy
Finding a strategy is easily made by doing research, and your trading strategies will work in two ways. First, there are strategies for how you take trading action. Second, an important tool is to have a risk management strategy. This is a strategy that helps prevent enormous losses, and can include elements such as a daily limit on the size of your losses, at which you stop if it is reached.
How to find a day trading broker
Though it is possible to find a day trading broker on your own, it is time-consuming to find and compare them. Luckily, there are plenty of comparative services that compile information on several broker-options so that you can simply go down the list.
Factors to consider
- Costs
When it comes to day trading and its brokerage, there may be several different types of fees that you should be aware of. These fees can include minimum deposits, commission rates, margin rates, daily activity limits etc.
Most of these costs are put in place to act as security measures due to the high volatility of the market, but these costs may also differ between different brokers. Some brokers also use the fine print to add extra charges, so make sure you read and compare those costs before you signany contracts.
- User-friendliness
Most brokers use online platforms to communicate with their clients. Given this fact, it is important to consider the user-friendliness of the platform. Is it easy to navigate and find what you’re looking for? Is it easy to find emergencyhelp and customer service information?
- Market accessibility
It is still quite uncommon for brokers to deliver global services, and they are therefore typically linked to one type of national market. There are international services available in larger industrial countries, such as USA and Japan, but it is always best to check that the broker provides access to the markets that you are interested in.
- Strategy
For the most part, brokers will accept almost any strategies. However, due to the high volatility of the market, brokers will sometimes impose restrictions on the strategies they are willing to work with. For example, riskier strategies such as automated trading or short-selling might not be allowed on certain platforms in order to preserve the safety of the trader.
Thus, if you are interested in these strategies in particular you need to double check that the broker provides service for these types of trades.
