The Best for Day Trading 2021

Daytrading

While there are many ways to invest in the financial markets, more and more traders are turning to day trading. This investment strategy is an active trading technique that allows you to profit from market movements over the course of a trading day. In this guide, you will learn what day trading is and how to get started as a beginner.

Online trading 2021: The 5 best brokers

  1. eToro: Best platform for beginners
  2. Libertex: Best platform for regulation and security
  3. AvaTrade: Best platform for technical tools
  4. Bitcoin Era: Platform for automated trading
  5. PrimeXBT: Low cost and regulated platform

6 simple steps to day trading

To get started day trading, follow these basic steps:

  • Step 1: Learn about trading and how to become a day trader
  • Step 2: Choose a broker with a suitable platform and low spreads
  • Step 3: Set up a trading account with the broker and deposit funds
  • Step 4: Familiarize yourself with the platform and its functions
  • Step 5: Form your day trading strategy and organize your day
  • Step 6: Open your positions and monitor your account carefully

What is day trading?

Daytrading

As the name suggests, day trading is a strategy that involves buying and selling financial assets on the same day. The day trader therefore usually uses small price movements to speculate on the performance of an asset from a few minutes to a few hours.

Day trading is one of the trading techniques that requires the most attention and availability. In fact, you need to sit in front of your screens to take advantage of every trading opportunity that arises during the course of a trading day.

The main goal is to avoid paying overnight fees, also known as rollover or swap fees. These fees usually have to be paid to your broker when you hold a position overnight.

Day trading is a method of intraday trading that typically uses leveraged products and margin trading to amplify market movements. CFDs or Contracts for Difference are one of the most popular financial derivatives for investors with short-term strategies.

CFDs represent a financial contract between you and your broker to exchange the value of an asset between the opening and closing price of a position. Therefore, you do not own the underlying asset with which the CFD is traded. They are merely speculating on the change in price.

In addition, online CFD brokers are generally good platforms. They offer many markets, robust trading platforms and reasonable trading fees. You still need to hire the right broker….

Which markets can I day trade?

Day trading is a strategy of taking advantage of price movements during a trading session without holding open positions overnight. This makes it possible to day trade any market that is available through your broker. Some of the most popular are:

  • Forex
  • Stocks
  • Indexes
  • Raw materials
  • Cryptocurrencies

How to day trade: Guide

Daytrading

But how can you day trade and where do you start if you are a beginner? In the following steps we will explain how you can start day trading with our recommended eToro broker in a few simple steps.

Step 1: Choose a day trading broker

Since day trading requires responsiveness, you need a broker that can offer fast execution times. Depending on your day trading strategy, the tools and indicators you need should also be available on the trading platform.

Remember that a day trader takes many positions per day. Therefore, brokerage fees, such as the spread, i.e. the difference between the bid and ask price, should be as low as possible.

eToro: Ideal broker for day trading beginners

etoro

A financial services provider based in Cyprus, broker eToro is a highly regulated broker that allows you to learn day trading on an interactive platform.

As a multi-asset platform, eToro offers an attractive environment for those looking to trade multiple markets within one broker, from beginners to experienced traders.

eToro offers over 2,000 assets in various categories such as cryptocurrencies, ETFs, stocks, indices, currencies and commodities and you can trade as little as $200.

eToro also offers technical analysis and research tools on its social trading platform directly on the web. There is a very basic version and an advanced version with more advanced technical indicators and drawing tools (ProCharts). This function serves as a “comparative technical analysis tool”.

In addition, eToro has pioneered the development of copy trading functionality, which allows investors who wish to automate their day trading strategies to copy the trading positions of other investors.

Day trading fees:

  • Spread, which varies depending on the instrument traded

Example of some typical spreads at eToro:

  • DJ30 = 600 pips
  • FRA40 = 100 pips
  • GER30 = 200 pips
  • EUR/USD = 3 pips
  • EUR/GBP = 4 pips
  • USD/JPY = 2 pips
  • OIL = 5 pips
  • Gold = 45 pips
  • Bitcoin/EUR = 0.75 %
  • Apple = 0.18 %

Miscellaneous fees :

  • 5€ redemption fee
  • Conversion fee for bank transfers for deposits and withdrawals
  • Foreign currency fee for deposits and withdrawals
  • Cryptocurrency transfer fee
  • Inactivity fee

Admiral Markets – The broker with MT4 and MT5

Admiralmarkets

Since 2001, regulated broker Admiral Markets has been expanding its Forex and CFD brokerage offering by providing more and more assets and trading features for a minimum deposit of £100. Forex and CFD traders often choose this broker because of its excellent training department and advanced MetaTrader options, including the Supreme add-on and market research via Premium Analytics.

The MetaTrader trading platform is particularly popular with day traders. It is a robust, powerful and reliable platform that offers a variety of technical analysis tools as well as automated and algorithmic trading options for advanced analysis. In addition, the execution speed is ultra-fast, with 90% of trades settled within 150 milliseconds.

The broker offers more than 4,000 CFDs on Forex, cryptocurrencies (day trading), commodities, stocks, ETFs, indices and bonds. It is also possible to use all trading styles as there are no restrictions. For example, hedging is allowed.

Day trading fees:

  • Spread, which varies depending on the instrument traded
  • Commissions on equity CFDs (0.1% of the face value of the trade on Japanese equities, 0.07% of the face value of the trade on Australian equities, €1 on European equity CFDs in EUR, $1 on US equity CFDs, etc.)

Example of some typical spreads at Admiral Markets:

  • DJ30 = 1.5 pips
  • FRA40 = 0.8 pips
  • GER30 = 0.8 pips
  • EUR/USD = 0.6 pips
  • EUR/GBP = 1 pip
  • USD/JPY = 0.9 pips
  • WTI = 3 pips
  • Gold = 25 pips
  • Bitcoin/EUR = 1%
  • Apple = 9 pips

Miscellaneous fees :

  • Inactivity fee
  • 0.9% for deposits via Skrill and Neteller
  • 1% of the amount for internal transfers between accounts of the same customer with different currencies
  • Withdrawal fee for bank transfers

IG Markets – The oldest broker

IGmarkets

IG Markets is one of the world’s largest regulated CFD brokers, offering a wide range of assets, DMA CFDs, a robust trading platform and excellent real-time trading charts.

With a minimum deposit of £300 by credit card, you can access over 17,000 financial securities. It also offers numerous financial products such as CFDs, barrier products, turbos and vanilla options. IG Markets also offers extended hours on over 70 US stocks and indices.

The trading platforms offered by IG Markets are intuitive and designed specifically for trading on mobile phones, tablets and online. It is also possible to use MetaTrader 4 and ProRealTime charts to make the most of the advanced trading tools, fast execution and automatic trading.

Day trading fees:

  • the spread varies depending on the instrument traded
  • no spread for CFD shares, but a commission (minimum €5 for Euro shares, $15 for US shares, £10 for UK shares, 25 CAD for Canadian shares, etc.)
  • Costs related to guaranteed stops

Example of some typical spreads at IG Markets:

  • Wall Street = 1.4 pips
  • FRA40 = 1 Pip
  • GER30 = 1 Pip
  • EUR/USD = 0.75 pips
  • EUR/GBP = 1.23 pips
  • USD/JPY = 0.79 pips
  • WTI = 2.8 pips
  • Spot gold = 0.3 pips
  • Bitcoin = 40 pips
  • Apple = no spread, but 2 cents/share commission

Miscellaneous fees :

  • Real-time quotes
  • ProRealTime tables
  • Inactivity fee
  • Documentation fee
  • Production costs

Good to know: All of these brokers can also be reached via your phone. For a full list, check out our guide to the best trading apps for 2021.

Step 2: Register and create an account

Once you have selected your broker, move on to step 2: Registration and KYC process. In the following steps we will show you how to start day trading with our recommended broker eToro, but the process is similar with most brokers.

Open trading account

With this registration form, signing up with eToro only takes a few minutes. Once you click on “Create Account”, you can access the eToro platform.

Verify your eToro account by submitting the required documents

Account verification

Once you are on the eToro platform, you need to click on “Complete Profile” (under your name on the left side). This way you can complete your profile and get your account verified to unlock all the features of the broker.

Step 3: Deposit money into your trading account

To start trading, click on the “Deposit Money” button. This allows you to deposit money into your eToro account via your preferred method. eToro does not charge any deposit fees and you can use bank transfer, credit card and PayPal.

Step 4: Get to know the trading platform and its functions

There are many features on the eToro marketplace. As the world’s leading social trading and copy trading platform, eToro allows you to share and access a wealth of information about various financial assets. It is also possible to copy the portfolios of other successful traders directly.

Step 5: Use eToro ProCharts

To take advantage of advanced charting and trading tools, you can use eToro’s ProCharts option. This way you can use many trading indicators and drawing tools that are not available in the basic platform.

Step 6: Place your various orders to profit from your day trading strategy

Since day trading is all about making multiple trades in a day, you can open your positions as soon as your trading signals appear. Then click on “Portfolio” to view the status of your trades. If you want to close your positions, click on “Close”.

Advantages and disadvantages of day trading

Daytrader

To determine if day trading is right for you, consider the pros and cons listed below.

advantages

  • You can earn very high returns if you are willing to take the risks involved.
  • Leveraged day trading can multiply your profits
  • Opens the door to more trading opportunities and strategies
  • Fast results: You get your daily results relatively quickly
  • Avoiding brokerage fees overnight
  • Avoidance of price fluctuations that can occur overnight
  • High liquidity, especially in day trading
  • Opportunity to earn a living with day trading

disadvantages

  • High risk and no guarantee that you will make money
  • Taxation can be hard to bear and affect your profits
  • Relatively high starting capital: To start day trading, you need to have sufficient cash
  • Money you can afford to lose if your trades don’t go as planned.
  • Learning day trading is difficult: Day trading requires a steep learning curve, knowledge and a good strategy to succeed

How much capital should you start day trading with?

The first thing to remember is that you should only trade with money you are willing to lose, and never borrow money to invest.

With the many brokers available in the market, there are options for every budget. For example, you can get into day trading with as little as $100. For many traders, starting with $2,000 is reasonable.

The most important thing to remember about day trading is that your trading costs do not outweigh your profits.

Is day trading something for me?

Day trading is ideal for short-term traders who do not want to hold trading positions overnight to avoid overnight fees. It’s also an interesting technique to completely separate yourself from trading at the end of the day.

Since no trades are opened overnight, it also avoids the stress of risks that can arise while the trader is asleep. It is possible that the Portfolio may experience sharp price movements due to an event in another part of the world.

Good to know: To find out if day trading is right for you, you first need to determine the following: Are you an investor or a speculator?

Basic technical indicators for day trading

Daytrading

Since the success of day trading largely depends on the timing of entry and exit from positions, day traders rely mainly on technical analysis. This method of market analysis is mainly done by studying the price trend on the charts.

This allows a technical analyst to identify trends and determine areas where prices may react, such as supports and resistances or pivot points.

Besides pure chart analysis, there are many popular indicators for day trading. There are several categories of indicators:

  • leading as the RSI (Relative Strength Index)
  • lagging like moving averages
  • Oscillators like the Stochastic

Some of the most popular technical indicators for day trading are:

  • RSI
  • Bollinger Bands
  • Moving averages
  • Fibonacci retracements

To find the best indicator(s) for your day trading strategy, you need to consider your trading plan and a few other things:

  • What’s the general situation?
  • What is the underlying trend of your asset?
  • Does the indicator react sufficiently to the price fluctuations of the assets you trade?
  • Is it easy to interpret and use?
  • Can you use it for free on the trading platform?

How do you define a day trading strategy?

Day

In order to determine the best technical indicators for your trading plan, it is important to remember that what works for one trader does not necessarily work for you. It all depends on your goals, your initial capital, and your risk tolerance.

However, it will be easy for you to find those that are suitable for you using the list of popular indicators for day traders. All you have to do is set it up and tailor it to your business:

  • Support and resistance levels
  • Trend lines
  • Channels
  • Fibonacci retracements
  • Continuation, reversal or indecision charts
  • Pivots
  • intersection of two moving averages
    RSI
  1. Invest in yourself to improve your trading skills
  2. Risk only what you can afford to lose
  3. Find the best broker for your needs
  4. Always follow your trading plan
  5. Establish strict rules for risk and money management
  6. Keep a trading diary and make a habit of reviewing your trading history
  7. Refine your trading plan and optimize your strategy first via a demo account
  8. Know the trading hours of the markets you trade on
  9. Always keep an eye on the economic calendar
  10. Be careful with margin trading and the use of leverage
  11. Remain neutral
  12. Be disciplined, patient and focused
  13. accept losses
  14. Learn from your mistakes
  15. Know when to stop trading

Conclusion: How to start day trading

If you want to profit from the price fluctuations of different financial assets within a single trading session by closing all your positions at the end of the day, then day trading is the right strategy for you.

Day trading is a very short-term trading technique and is usually done through CFD brokers that offer a wide range of assets, a robust platform, leverage tailored to your strategy, and technical analysis tools.

To be successful as a day trader, it is important to control your risk, always follow your trading plan, constantly improve your knowledge of the markets and use a good broker like eToro to easily spot trading opportunities and take advantage of them quickly.

Daytrading FAQ – Frequently asked questions

Is day trading risky?

Day trading, like any type of investment, carries a certain risk of capital loss. Since day trading exploits relatively rapid price fluctuations, it mainly involves speculation with leveraged products. Margin trading and leverage amplify price movements, which can quickly increase your profits, but also your losses. For this reason, day trading style is not for everyone.

How much money do you make with day trading?

It all depends on how much capital you start with, how much you risk per trade, and how serious you are about your trading plan. It also depends on what market you are trading (volatility and liquidity) and how much time you spend on your trading education. Your earning potential in day trading also depends on your personality and the strategies you use.

What do I need to start day trading?

Keep in mind that you need the right equipment and powerful software to quickly identify and act on important financial information.

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