Hello everyone, hope everyone is doing well. I'm here looking for advice / suggestions on which brokerage would be the best for my needs. A little background on what type of trading I'm planning on executing: I'm looking into day trading stocks which usually range from $5-$100, but I will sometimes touch a stock that's $100 if there's some sort of catalyst and the opportunity is right. My account deposit will be around $30,000-$35,000 and I will not keep any shares overnight. I am currently (paper trading) 50% long / 50% short, thus the brokerage must have a good short locating system in play. My share size is equivalent to around $20,000-$50,000 depending on the situation. After a quick rundown, I know paper trading is nothing like real trading (mainly emotions), so I am going to take it slow and small the first few weeks. In other words, I'll use small share size to get familiar with everything and how the market performs. I am only focusing on 1-2 patterns followed by some technical analysis / VPA and I have a decent strategy in place (no more than 2% loss a day, no more than 200$ loss per trade, etc). So these are the brokerages I came up with that seems to fit my needs: My Location = California (USA) TD Ameritrade + TOS Pros: Great customer service. | Well established with tons of walk-in locations. | TOS is a great charting program, I love it. | Overall commission (when lowered) can be $3-4 per trade which is nice. | I have a TDA walk-in location within 2 miles of me. Cons: Not direct access, thus slower execution time. | Usually doesn't have the same stock availability for shorts, especially for stocks under $10 (big factor). | (Not sure if this is true, but doesn't have REAL level 2 data? Correct me if I'm wrong). Overall: I would try out there 60-day commission free trading but in the agreement, it states I have to leave the deposit amount in the account or I will be charged with the cost of the fees, etc. I love TOS as I think I'll be using this charting system regardless. If they had best shorting availability, I would definitely give TDA a shot due to TOS. Interactive Broker + TOS (for charting) + DAS Trader (level 2, order executions) Pros: Direct access resulting in quicker executions. | Great availability when it comes to shorting stocks. | Lower commission rates when using tiered option. | Most professional day traders use this over TDA. Cons: Iffy customer service as well as no walk-in locations. | When buying share size of 1000+, it starts to add up in commissions, especially using fixed option. I may be mistaken, but using the tiered option provides cheaper commissions due to rebates from liquidity. Overall: I am leaning towards IB but I still need a better understanding of the difference between tiered and fixed commissions. On top of that, I need to read more on direct access trading as I'm still unfamiliar with that. I'll probably google it and if I can't fully understand it, I'll make a post. CenterPoint Securities + TOS (charting) + Some execution software Pros: I heard it has better short availability than IB. | There's a location in San Diego which is in the same state as me. Cons: I heard it can be expensive? | Not as well-known as TDA / IB. Overall: Throwing this in the mix because I heard its a great alternative to IB, which is also on the list. Sorry for the long post, but I just want to make sure I pick the right brokerage for day trading as well as overall performance, shorting availability, execution speeds, etc. THANK YOU VERY MUCH !!!
RKJSF, I'd like to add Lightspeed to the mix. There is no reason why you need to have a walk in location to get a great broker. Lightspeed Trader would offer fast access to US Listed Equities. You can choose from a per trade or per share rate. We introduce to Wedbush Securities where your account would custody and clear with Lightspeed as your broker. We offer locates on HTB stocks from two sources. The locates from Wedbush the clearing firm, are free. We also offer third party locates that have a cost. Contact me directly to set up a time to talk or if you want a demo. https://www.lightspeed.com/trading-platforms/lightspeed-trader/platform-features/ https://www.lightspeed.com/pricing/commission/ https://www.lightspeed.com/pricing/routing-fees/ We also offer Sterling Trader Pro and Realtick. https://www.lightspeed.com/technology/trading-software/ And welcome to Elite Trader. Bob
How do these "free" locates from Wedbush work? Was TLRY totally free to borrow on the way up? I highly doubt that
He is a day trader so I was discussing locates not borrows. All stocks held short overnight have a borrow rate. TLRY was generally available on the Short locate feature from Velocity Capital but not for free on days that it was not a threshold stock. Wedbush had very few shares to offer. Clients first request locates on any stock that is not on the ETB list from our support staff. If they do not get a locate, they can use the Velocity Capital locate feature built into Lightspeed Trader and Sterling to pay for a locate. The service is expensive but very popular.
Considering you are trading stocks, you cannot limit it to 2% loss when your share size is $20,000 to $50,000 per trade? And your total capital is $30,000-$35,000? You are taking too much risk per trade and will blow out your account. And real life trading is nothing like simulations. Slippage is real and bid and ask spreads could be very wide at times! And you should know that borrowing shares to short it is very risky. Your risk to the upside is unlimited. As for the brokers, you pretty much have your information to decide which one.
Hello Bob, with no disrespect (I see you work with Lightspeed), the reason I haven't considered Lightspeed is because throughout my own research, I haven't seen anyone suggest it as often as IB, TDA, and CP. On top of that, when I google search Lightspeed, most of the reviews are 3-3.5/5 and 7.5/10 while IB and TDA are 4-5/5 and 9-10/10. But that doesn't mean I'm not willing to give you guys a chance, but that's why I didn't put it on the list. I will conduct some research about Lightspeed and if it seems like a great opportunity, I'll consider it greatly. Thanks for the advice / welcoming. You are 100% correct. I should reconsider my share size to match the risk / reward of each stock. I will play around in paper trading a little more and resize my share size. If I'm correct, slippage usually occurs with stocks with bigger spreads and less liquidity? In papertrading, I rarely use market orders as I have hotkeys that buy / sell @ ask / bid. But I read somewhere a LIMIT order becomes a MARKET order when the order is executed, not too sure. As for shorting, you are also correct. It is unlimited as the stock can become the next bitcoin (stock vs currency, apples vs oranges, just using analogy). I usually short only if I see a great buy such as negative news as well as only short near a resistance. Which brokerage do you currently use? Thank you for the reply and advice!
Free! If you find another one that gives you that, please let me know. Too bad they don't have real-time API afaik. BTW you don't have to combine display with execution although it's convenient for sure. Let us know what you choose.
This looks to me like Level 1 data, Level 1 provides 1 level of each ECN/Exchange. Level 2 shows depth at varies prices within each exchange like NASDAQ. Like this: