Best Day Trading Brokers for Beginners
So, you’re new to day trading and you’re looking for a day trading platform. First of all – welcome to the community, Trader! Day trading is exciting, challenging, and often rewarding. But first, you need to choose the best broker for your day trading goals.
How do you choose the best beginner day trading platform, though? And is there a difference between, say, the best online stock brokers for beginners, and best brokers for large accounts?
Don’t worry! I’ve made it super easy for you to start your search. Whether it’s the best broker for small account day trading, or a broker for larger trades, there’s something on this list for you! So, let’s dive in.
Is There a “Best” Day Trading Platform for Beginners?
The short answer is no. The best trading platform is one which delivers the tools you need, to help you reach your goals, at a reasonable cost. Whether you’re swing trading or options trading, the best trading platform depends on what you need from the service.
So, just because you see a successful trader using a certain platform doesn’t mean you’ll get the same results. I’d encourage you to bear this in mind as we move through the article.
Day Trading Platforms for Beginners: Misconceptions
I want to briefly address two misconceptions you might have as a new day trader. These are around commission fees and where’s best to trade.
When choosing a broker, you might be tempted by promises of zero commission. But whether a platform charges commission should not be a deciding factor.
Why? Well, let’s think about it. Just because there’s no commission doesn’t mean it’s a reliable platform or suitable for your goals. Here are a few examples.
Sure, you could save $5 on commission. But maybe you’re filled with 50 cents slippage.
Or, say you save a few dollars on a trade. The downside? You don’t have short stocks available when low float penny stocks catch your eye. Penny stocks which are pumped 400% and extended on the day.
The reality is that commissions and fees are part of using day trading platforms. For me, they’re worth the better execution speeds, profits, and fills.
What about day trading on a mobile – surely this is better than a desktop, right? Wrong! Actually, execution speeds are often faster on desktops than mobiles.
What to Look for in a Day Trading Platform
Briefly, then, what should you look for in a day trading platform for beginner day traders? Well, I’d say you should look for platforms that offer:
User-friendly interface
Reasonable commission fees (based on what’s on offer)
Reliable and speedy customer service
Clear and transparent pricing structure
As a new day trader, you’re still learning the ropes. Whichever day trading platform you choose should make it easy for you to reach your potential. It shouldn’t have a steep learning curve.
Without any further ado, let’s get into the brokers I think are best for day trading – especially if you’re a new trader.
Best day trading brokers for going long stocks:
1. Interactive Brokers:
Account minimum: $2,500 USD
Pros: Cheap commissions. Getting better at having short borrows on small call penny stocks. I use this broker for day trading penny stocks. Plenty of easy to borrow stocks to short at no extra borrow cost.
Cons: Expense on monthly individual data subscriptions add up. Terrible customer service. No hard to borrow stocks and short stock locate function.
Let’s start with the most basic brokers for most beginner traders to get started. Going long. I personally started with learning long strategies and that's how I built my small account that way. Interactive brokers is the first broker I got when I started day trading six years ago.
At first glance, IB is indeed a lot cheaper than most other brokers out there.
Basically, the cost for buying and selling US listed stocks is $0.005/ US per share, with a minimum of $1USD per trade. So, for newer traders with small accounts this is really affordable and their execution and fills are decent as well.
Keep in mind to trade on IB you will need to purchase additional market data subscriptions on their platform Trader Workstation (TWS). If you are day trading mostly the US Nasdaq and NYSE stocks and options like me, this is what the subscriptions would look like, and it adds up to about $30 US a month.
That includes things like equities and options quote for Nasdaq exchanges, level ii etc. But if you trade those true sub dollar penny stocks, you need to purchase additional OTC or pink sheets data for I think $10 extra per month.
As for the ability to short, IB has generally good short locations for the large cap stocks, basically anything but a low float runner on day one. They do not offer the function of locating borrows but any short availability is free of any extra charge.
Interactive brokers are available in the US, Canada, and most international countries. If you are in the US, there is the option of IB Lite, which is free commission trading, but I believe you would only be able to trade on IB Lite on mobile or web, not on their TWS desktop platform.
Check out Interactive Brokers HERE
2. Fidelity Active Trader Pro
Pros: Good execution fills and customer service.
Con: Outdated trading platform, sometimes the buttons lag.
Let's talk about Fidelity Active Trader Pro. I have not used this broker myself, but I hear from many traders I trade with every day that they have great execution fills. For a broker that’s gone commission free, that's amazing. Another thing to note is their customer service support line.
They pick up the phone with only one minute wait and this broker has good short availability for mainstream large cap stocks, such as the ROKU and TSLA, at no additional borrow cost. Basically, they are around the same level as interactive brokers.
But the cons of Fidelity Active trader pro, is their platform. The reviews from the traders I know are generally the same. Their platform functions are outdated and clunky.
So keep that in mind. Fidelity is available outside of the US as well so make sure to check their international website for details.
Check out Fidelity Active Trader Pro HERE
3. TradeStation
Pros: Great for trading automation, direct access broker, Matrix feature for faster order entries.
For all you traders interested in trading automation and coding your own making it rain Lamborghini trading bots, you might be interested in Trade Station. Trade station is another direct routing broker that offers good executions for traders. Their shorting availability is on par with Fidelity and IB, where most general large cap stocks are available to short for free. Their platform has this Matrix feature, which is a more advanced but easy to follow L2 montage.
The matrix offers lightning-fast order entries on all different kinds of orders like bracket, sell and buy stop orders. Like I mentioned earlier, TradeStation platform also allows you to build your own automated trading strategies.
If you ever build a bot that will make it rain Lamborghinis, make sure to call me. However, their fees are on the higher side in comparison to all the brokers we mentioned before, but the direct routing executions and fills make it worth it.
Check out Trade Station HERE
Best Broker for Long Term Swing Trades
Next let's talk about choosing a broker for those cool and exciting long term swing trades. The first broker that comes to mind, for me, is Moomoo.
Moomoo
Although relatively new, Moomoo is a promising and versatile trading platform with a simple but powerful interface. There are no inactivity fees which is great for new traders taking their time learning the trade. What’s more, it offers plenty of educational tools and support to keep you on track, and it’s super easy to open an account.
Pros: Comprehensive analytical tools which help new traders. High interest on uninvested cash. Commission-free stock trading.
Cons: There’s only one account base currency. Moomoo as of yet doesn’t support all asset classes such as mutual funds. And you can only withdraw via bank transfer.
If you’re looking for the best broker for small account day trading, you can’t go wrong with Moomoo. Learn more about it HERE.
And right now, you’ll get a free welcome bonus depending on how much you deposit!
2. CenterPoint Securities (Broker for shorting with large account)
Pros: Great list of hard to borrow stocks to reserve short, at a more premium price. Great customer service.
The next broker is also amazing for shorting HTB stocks, and that is CenterPoint Securities. They are a little bit more expensive in terms of short local fees than Cobra Trading, and there is also additional 3x overnight fees if you swing stocks short at CenterPoint. However, they do offer amazing customer support service, direct access trading, and connection with DAS Trader pro.
CenterPoint Securities is available for traders in the US, Canada, and many other international clients with an account over $30K.
Check out CenterPoint Securities HERE
Best brokers for Shorting Stocks with a Small account
1. TradeZero (PDT rule still applies for US)
Account minimum: $2500 USD
My Trade ZeroPro platform set up:
Ok let's talk about the top choice for shorting if you have less than $25K. That is Trade Zero. Trade zero is an offshore broker in the Bahamas.
They have great short locations on these hard to borrow penny stocks just like Cobra Trading and CenterPoint, and you can open an account with them for $2500 minimum. However, their location fees are a lot higher.
Even though they claim to have free commission trades on limit orders, Trade zero loves to ding traders for like, wire fees, statement fees, deposit fees, and everything like that definitely adds up.
Another thing to keep in mind is their platform Zero pro. The executions and fills are extremely clunky and sometimes it freezes during times of volatility.
TZ is definitely a great option for short sellers with a small account. Americans can open an account with Trade Zero America, but you’ll still have the PDT rule restriction under 25K. Canadians and other international traders can open accounts with TradeZero international.
Now what if you want to avoid trading under PDT restriction. PDT stands for pattern day trader rule. Basically it limits how many times you can trade if your account is under $25,000. Under the PDT rule, the day trader can only place 3 day trades in a consecutive 5 day period.
PDT rule only applies to US traders with US based brokers, such as all the ones we talked about earlier, IB, Trade Station, fidelity, thinkorswim. Premium brokers like Cobra and Centerpoint don't even take clients under PDT. If you are in the US and want to avoid this restriction, you can open a cash account with any of the brokers I mentioned earlier, or open an offshore trading account with CMEG.
Check out Trade Zero HERE
Best Day Trading Broker for Beginners: Which Broker Should You Choose?
Whether it’s the best broker for large accounts, or the best stock brokers for beginners, there’s one thing to look for. And that’s FDIC insurance! FDIC insurance means your deposit is protected if there’s a bank failure. Without insurance, you could lose big.
Not all US brokers are insured. Check this carefully before signing up for a day trading platform.
What else should you look for? Ultimately, there’s no one best day trading platform. No one platform will suit everyone (and that’s okay!). So, here’s what I’d suggest you think about when you’re making your choice.
Common Mistakes to Avoid When Choosing Best Brokers for Beginners
Okay, so that’s how you should choose the best broker for day trading. But are there any “red flags” to look out for? Definitely. Let me recap common mistakes I suggest you avoid when choosing a day trading platform.
Choosing uninsured brokers
Selecting a platform based solely on commission fees
Choosing without thinking through how the platform supports your trading strategies
The main takeaway is that there’s no one size fits all broker out there. But I’m here to help if you need a little guidance on choosing a broker. Learn more about the Humbled Trader community and connect with me!
Get Help Choosing a Day Trading Platform for Beginners
Feeling a little confused or overwhelmed by the choices out there? I understand – there are so many great options to choose from! So, how do you actually get started, and how do you avoid making common mistakes?
Well, that’s why I recommend joining the Humbled Trader community. You’ll gain hints and tips from other Humbled Traders based on real experiences. They’ll tell you what it’s really like to use any trading platform! And they’ll be honest about their mistakes, too, so you can learn from their mishaps.
We’re a welcoming and knowledgeable community. Not only will you gain insights, but you’ll feel part of a team. And a team is indeed what we are. After all, we’re all working on becoming the best traders we can be!
To learn more about brokers for beginners, and to become part of something special, become a Humbled Trader. Join our community and take a huge step towards reaching your potential.
