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Day trading is an alluring option for many investors. The potential to earn short-term profits and make a living executing trades from the comfort of your home is an exciting prospect. However, day trading is incredibly challenging to master.
Many beginners jump into day trading, hoping to make quick profits and kick their 9 to 5 to the curb. Then they quickly realize that while it’s simple in theory, day trading requires a high level of skill, precision, analysis, and sometimes, a little bit of luck.
Thankfully, we live in the digital era. For beginners and advanced traders alike, the advent of software makes day trading much more straightforward and digestible. Good software can be the difference-maker between finding success and leaving broke.
What is Day Trading and Day Trading Software?
Day trading is basically the practice of buying and selling positions, usually stocks, rapidly over one trading day. The goal is to make minuscule profits on each trade so that, over time, the profits add up to significant gains.
Day trading software allows traders to partake in day trading efficiently and consistently. Typically, these software solutions have some level of automation, so that trades can happen quickly. The good ones also include some type of analytical tools.
The right software for you often boils down to recognizing your goals, analyzing functionality, and running a cost and benefit analysis.
So, which day trading software solutions are the best? Here are five of the top choices.
Top Day Trading Software Picks
Ultimately, you want software that:
- Has Low Commissions and Fees
- Is Responsive and Up To Date with Latest Research
- Has a Minimum Balance that You Can Comfortably Afford
- Is Mobile-Friendly
All of the following fits the above requirements, plus offer additional benefits and reasons for why they might be a fit for you.
#1. TradeStation – TradeStation offers professional-grade tools and provides educational resources, too. It’s great for advanced and newbie traders, alike. One of the primary benefits of this software is that it allows you to trade everything from stocks and ETFs to cryptocurrencies, allowing you to have a diverse set of assets. It also offers $0 commissions on stocks.
#2. TD Ameritrade – TD Ameritrade is a terrific option for first-time traders. They offer a multitude of learning tools, education videos, portfolio planning, and more. They even have an AI chatbot to answer questions as you have them. There’s also an option to practice trading with a fake account so that you can learn how to trade before you have real money at stake. There’s not a more comprehensive learning and educational software out there. However, this does come at a hefty cost for day traders. With TD Ameritrade, you have to pay $6.95 per trade. That can be too high for most day traders, but there’s a $0 account minimum, and no annual fees.
#3. TradeSpoon –TradeSpoon is a fantastic software for both beginners and advanced traders. Their usability and interface are dynamic and intuitive. There’s a one-on-one mentoring option, too, which allows you to be mentored as you navigate the day trading world. There’s also a stock forecast toolbox. They offer variable pricing options to fit your needs. However, the beginner option is free.
#4. Interactive Brokers – Interactive Brokers was developed specifically for day traders. So, the tools are catered around the day trading gig. It can be cost-prohibitive. You must always keep $100,000 in your account or accumulate $10 in monthly trade commissions to avoid paying a monthly fee. They offer discounts for high-volume traders. This software is the best for advanced day traders looking for the best selection of stocks and tools. However, if you’re new to day trading, you’ll probably want to learn the waters with a different software first.
#5. E-Trade – E-Trade is one of the most recognizable software solutions on the list. They’re large players in the investment and trading world. Their research and analysis tools are high caliber, but you must have an account with at least $250,000. The app is responsive and straightforward, and it has very little lag. They offer $0 commissions but charge $6.95 a trade, so you’ll need to be careful. While it’s user-friendly, it’s best to use E-Trade as an intermediate or advanced trader.
Choosing the Right Software for You
If you’re new to day trading, be sure to choose a software that integrates educational resources. TD Ameritrade is a fantastic, all-around choice for new traders if you can afford their extra prices.
On the other hand, if you’re a knowledgeable, full-time day trader who wants to maximize what you do, Interactive Brokers is a fantastic option. It was designed specifically for high-volume day traders.
Ultimately, weigh the cost and benefits, and be sure to read the fine print text before committing to any software.
Skylar Hammond is a writer for True Trader who specializes in topics such as stock trading, personal finance, and forex. He focuses on helping beginners and experts alike learn more about the market and improve their trading skills.