:: choose a broker

choose wisely - a good broker can be the difference between day trading profit and loss

A direct access broker (DAC) will send your orders DIRECTLY to the market, meaning very fast execution speed. Online brokers (like Datek, Ameritech etc) can't really compete with this speed, which is pretty much essential for day trading. Direct access software tends also to be much more geared towards day trading, with shortcuts for the fast day trader such as default trade size, default routing and so on. Properly configured, most direct access broker software will allow you to simply click once to place a typical order. Also, having control over the routing gives you much more options in your trades. In trading emergencies (such as when a stock goes into free fall) you will find it much easier to get your order placed than if you are hopefully clicking repeatedly on your online broker's lame webpage. If you use an online broker, you might find a day trading fee structure that charges you, say, $10 per trade, up to 1000 shares. WIth a direct access broker, and an ECN route, you may have to pay 3 times as much. HOWEVER, the day trading benefits (execution speed, trade price and so on) will usually FAR outweigh any downsides. You will also probably find that the majority of direct access brokers will waive your fees if you make a minimum number of trades per month, and this won't be hard to acheive if you intend trading for a living. For a list of excellent brokers, click here.

The alternative gaining ground is to open a spread betting account for day trading, especially if you are trading in theUK or Europe, as there are certain major tax advantages over traditional day trading accounts at time of writing (although the spreads tend to be relatively large). Trad Index is the best spreadbetting house, followed by Deal4Free, Finspreads and IGIndex.

Back | Forward