Hi, I have been swing trading for about a year now through Etrade and have been doing a lot of research. I want to be able to day trade more now, which I tried my hand at the past couple months and hasn't gone so well. I broke even for the year after being up prior to day trading. Etrade is definitely not a good platform for an active day trader at $9.99 per stock trade. I usually only trade equities and would trade about3- 5 positions a day if day trading. And I have about $25K to play with. I'm looking for a broker with a good platform, low commissions, good charting, research and T/A options. I want to be able to have about half my position in long/ swing trades and the other half day trading. I have been looking into interactive brokers, think or swim, light speed and trade station. It seems most people here use IB in one for form or another. Any suggestions would be highly appreciated.
What do you trade and what will you want to trade in the future? Stocks only? And even if you daytrade stocks only, you probably want to be able to look at the futures in various exchanges. IB is one of the best in trade execution and low fees. But their platform is way sub-par, specially for daytrading. Many use IB for trading, but use it with another platform. Some platforms allow you to save money by using your IB data feed. Others provide the data feed as well. I can guarantee that you won't be successful at daytrading when you have to pay $10/trade. With IB, you pay $1 for every 200 shares. You can position in and out of trades much cheaper with IB. Tradestation is an awesome platform, but they charge a lot if you don't trade 5,000 shares/month. They also charge for exchange subscriptions while IB provides many of them for free. I put a quick Youtube video together that may give you some insight. http://www.youtube.com/watch?v=8uDY52C45Us
Thanks Trader. BTW, love your name. I only trade stocks for now, but will like to trade futures, options, commodities, and some international in the future. I would really like to not have to use multiple brokers. What really is important to me is execution, price, charts, margin ability/ cost, real time data research/ feed and the actual platform. I'm still under-capitalized, so I need to save as much as possible on costs. I saw that the .05/ trade or $1 for every 100 trades is for people who use their smart routing API order? Isn't this for people who use algo-programs to execute automated trades? I wouldn't be doing that. I like think or swim because it seems like the best one stop shop. But, their margin rates are high.
No. You don't need a separate API. You can just place trades directly from the IB platform and get $.005/share pricing (200 shares is $1). You do need to use their smart routing, which means you let IB route and fill your order rather than you routing it to a specific exchange or ECN. Depending on how you daytrade, the fees can eat you up quickly. My recommendation to any new daytraders is to trade high dollar stocks ($75+/share) because then you buy/sell only 100 or 200 shares at a time. At $1 per trade, at least you can keep trading costs minimal. Think or Swim is VERY expensive. Their minimum fee per stock trade is $5.00. Believe me, those can add up real quickly. Each position (to get in and out of a trade) will cost $10 with Think or Swim and only $2 with IB. Options and futures are also much less expensive with IB. But IB's Java based platform is horrible and a resource hog. I don't know of any daytraders who don't use a separate API with IB. Some are even free, like Ninja Trader. But they're not very elaborate platforms and leave a lot to be desired. If you trade more than 5,000 shares a month, Tradestation has a very nice platform, but there are downfalls that I discussed in my video. Maybe others can chime in and give feedback on other brokers and platforms that may suit your needs better. Good luck.
Thank You. I guess it just seems a bit too complicated for me at this point as I still consider myself a novice. It seems as though I would have to go with a combination similar to IB+NinjaTrader+Esignal or Kinetick Broker + API + Data/ Charts Is that correct? Being able to have fast up to date data and charts is of utmost importance. I have missed on many trades because the lack of data. I saw your video. Really well done, but only outlined two brokers and I don't think Tradestation would work for me. That's for the serious pro. MBTradinbg is looking rather appealing right now as well. Seems like a good one stop shop, good commissions, but lacking real time data
You are correct, kind of! API can be your platform and include charts. It can also include data too! For example, Ninja Trader is just a charting platform. It can use your IB account to get it's data feed or you can subscribe to another data feed. E-signal on the other hand provides the charting AND their own data feed. E-signal also includes an API to use their charts and place trades directly with IB. On the other hand, the free version of Ninja Trader doesn't have an API to place trades with IB. You have to Pay (lease or buy) Ninja Trader to be able to place trades with IB directly from the Ninja Trader platform. This is specially important to daytraders. It can be a bit complex and overwhelming at first. But I think you should do it right from the beginning. Just be patient and do more research. Try out the free version of Ninja Trader with the free delayed data provided by Kinetick. See if you like Ninja charts. MBTrading is still $5.00/trade. I feel that's too high for daytrading purposes. The beginner falls into the psychological trap of not wanting to get out without losing their trading fee. $10 is harder to make up than $2. Good luck!
Tradestation and MB Trading are not true all-in-one brokers in that in order to trade equities AND futures, you need to have 2 different accounts with them and then shuffle funds back and forth between the two. With IB, it is all in one account (from the client perspective) and you can trade stocks/options/futures/forex/bonds side by side in the same account. For some people, this can be VERY important when it comes to availability of funds for trades. As to daytrading equities (which seems to be what you want right now) both Lightspeed and Genesis' Laser (they still offer retail accounts) offer better alternatives than the platforms already mentioned. Both of these platforms are 2 of the top 4 platforms used by props for daytrading stocks. (BTW, Lightspeed also offers futures too).
You state that you are "under-capitalized" yet you wish to daytrade, which means that if you become a PTD (pattern daytrader) the broker is going to want 25k minimum in the account. You can avoid this by not getting "flagged" as a PTD. If you require buying power, then you can always join a registered prop firm and daytrade without the 25k minimum. I use Think or Swim for swing trading stocks and options, and for watching futures. It's a great platform as they give you lots of extra features without the extra charges. Perhaps you can demo a few platforms and see which ones work best for your style. Good luck.
if your style is primarily price action oriented ,discretionary ,and chart flexibility is your primary concern, IB and Quotetracker is a combo that's hard to beat..QT charts are way better than most of the others i looked at in terms of unique ways of looking at price.
This guy's got some day trading info that might help you out. http://www.day-trading-stocks.org/day-trading-platforms.html