The search for the best day trading platforms and brokers is an important part of any serious trader’s process. Speed, reliability, costs, customer service, and charting tools are all key elements of day trading platforms that these highly active investors tend to value the most. Moreover, for traders who implement systematic strategies, backtesting capabilities have gained greater importance as well.
As day traders allocate more time and capital to their endeavors, it is important for online brokerages to provide them with the tools that they need, at a cost that doesn’t eat into their profits. Additionally, reliability of data is paramount, as is the ability to test trading ideas prior to deployment. We’ll look at several brokers who strike the right balance between day trading tools and competitive pricing.
Best Brokers for Day Trading:
- Best Online Broker for Day Trading: Interactive Brokers
- Best Broker for Advanced Day Traders: Interactive Brokers
- Best Charting Platform for Day Traders: Interactive Brokers
- Best Low-Cost Day Trading Platform: Webull
Interactive Brokers: Best Online Broker for Day Trading, Best Broker for Advanced Day Traders, & Best Charting Platform for Day Traders
- Account Minimum: $0.00
- Fees: $0.00 commissions for equities/ETFs available on IBKR’s TWS Light, or low costs scaled by volume for active traders that want access to advanced functionality such as order routing. $0.65 per contract for options on TWS Light; that is also the base rate for TWS Pro users, with scaled rates based on volume. $0.85 per contract for futures.
Interactive Brokers: Best Online Broker for Day Trading
Why We Chose It
Interactive Brokers (IBKR) remains firmly entrenched as our overall pick as Best Online Broker for Day Trading because it offers among the widest ranges of assets available to trade while charging some of the lowest commissions and margin rates in the industry.
Wide range and depth of supported assets
Low commissions and margin interest rates
Multiple scanners across asset classes
Education portal within platform
Intraday news updates within the platform
Steep learning curve for Traders Workstation
Complicated pricing tiers
Founded in 1978, Interactive Brokers is in its 46th year as a broker/dealer, and holds $10.9 billion in equity capital. Headquartered in Greenwich, CT, IBKR has over 2,650 employees across the globe, and has offices in Europe as well as Asia. In 2021, IBKR added support for U.S. spot gold trading. In 2022, Interactive Brokers expanded its cryptocurrency trading offered through Paxos Trust Company.
The strength of IBKR’s platform in terms of day trading has a lot to do with its Trader Workstation (TWS) platform. Giving access to a wide selection of assets, TWS offers reliable pricing, fast order flow, sophisticated charting tools, and automation capabilities. Moreover, users are able to customize their TWS workstation to their liking while also monitoring newsflow. Traders on the go will be able to access IBKR via its mobile app, which is available for both Android and iPhone users. You’ll find many of the same capabilities on the app as you will the desktop, particularly as it relates to setting up watchlists and placing orders. Charting capabilities, however, are more robust on the desktop platform.
While IBKR can work for both the casual and the more serious trader, TWS has a professional feel that seasoned traders will appreciate. The options analytics tool allows users to view how shifts in the options Greeks will impact the options pricing for the asset in question. The reach of Interactive Brokers in terms of markets and assets also allows traders to set up direct trades playing off global market dynamics.
For order flow, IBKR Pro users’ orders are submitted to IBKR’s high-speed, best execution order routing system, SmartRouter. This enables traders to receive optimized pricing and transaction speed. Users of IBKR Lite are routed to select market makers with whom IBKR may have payment for order flow agreements. The impact of this is that IBKR Lite users may be subject to a reduction in price improvement on trade executions.
Although IBKR Pro has upfront costs, it will likely be the choice of most day traders looking for fine control over order execution. Whether Lite or Pro, Interactive Brokers also gives traders access to the industry’s lowest margin rates to leverage up and amplify the returns on positions.
Interactive Brokers: Best Broker for Advanced Day Traders
Why We Chose It
Interactive Brokers continues to be our top pick for advanced day traders, as well. Its speed and efficiency specific to order execution complements its low rates on margin trading and provides advanced traders with a strong option to execute their strategies. IBKR has also continued to add tools to an already powerful arsenal, along with tradable assets and other key capabilities.
Superior order execution
Contingent orders for every situation
Low margin interest rates
A plethora of tradable assets
Backtesting strategies is cumbersome
SmartRouter only for Pro customers
IBKR continues a long run as our pick for Best Broker for Advanced Day Traders because it fulfills the needs of seasoned traders across multiple asset classes. Traders will find a wide selection of assets to choose from, as well as rapid and efficient order execution.
We expect most advanced traders will take advantage of the IBKR Pro offering in order to access SmartRouter. In doing so, traders can avoid the potential for order execution to be compromised by payment for order flow (PFOF), as may happen to Lite users. Additional features that push Interactive Brokers to the top for advanced traders are its robust selection of assets, wide selection of stocks on the easy-to-borrow list, and advanced charting tools. Trades can be placed directly via the chart itself and TWS is highly customizable in terms of standard analysis and displaying trading opportunities.
For mobile users, both Android and iOS users will be able to take advantage of IBKR’s mobile app. In addition to rapid order execution, traders can use the mobile application to review equity fundamentals, monitor valuations, and check environmental, social, and governance (ESG) ratings. Within the mobile app, traders on the go can trade options, view order books, and implement exit strategies directly from the app. Advanced traders will, of course, be working on Traders Workstation whenever it is feasible as the trading environment is more expansive than even the most robust mobile translation. While the broker has filled a major gap with the introduction of cryptocurrency trading, the lack of a user-friendly backtesting environment will still bother some more advanced traders.
Interactive Brokers: Best Charting Platform for Day Traders
Why We Chose It
There are a lot of competing platforms that have robust charting built into the trading interface, but none have what it takes to dethrone Interactive Brokers as our pick as the Best Charting Platform for Day Traders. Although IBKR holds its own in terms of charting functionality and the easy application of customized views and indicators, the robust selection of assets, ability to both chart and trade within one platform, and breadth of technical tools available to users all combine to keep IBKR firmly in the top spot.
Trades can be placed directly from customizable charts
Ability to chart and trade assets from multiple markets in one platform
Robust offering of technical tools
TWS takes time to fully customize
DIY backtesting feature is available to IBKR PRO users only
Intra-day traders will quickly find that IBKR provides them with valuable tools, robust asset selection, efficient order execution, and competitive costs. Day traders who are practitioners of technical analysis will feel at home when applying studies and indicators to a wide variety of assets across markets. There are a bevy of tools to choose from, and it’s unlikely that users will find themselves needing to go elsewhere for indicators or analysis. Furthermore, those who do not lean on technical analysis primarily will still find more than enough tools to fulfill their trading needs by identifying tradable events and fundamental data.
The challenge won’t be whether the tool exists on IBKR’s platform as much as it will be deciding which tools not to make use of. The standard relative strength index (RSI), Bollinger Band, stochastic cocktail of tools is available, as are more nuanced ones such as DeMark indicators, Connors RSI, and Donchian channels. The ability to apply statistical bands to the volume-weighted average price (VWAP) study is another feature that signals IBKR’s commitment to helping traders identify price inefficiencies.
Mobile users can make use of the same tools and indicators that are available on the desktop version, although they may find it more challenging on the mobile platform, which is not uncommon across the industry. Finally, traders can trade directly from the charts themselves via IBKR’s Chart Trader option.
All told, day traders will find tools, reliability, low cost, and speed with IBKR’s charting platform. This is, of course, in addition to all the other bells and whistles that won IBKR both the overall and best for advanced day traders categories.
Webull: Best Low-Cost Day Trading Platform
- Account Minimum: $0
- Fees: $0 commissions for stock, ETF, options, and cryptocurrency trading (small markup is priced in)
Why We Chose It
Webull is our top selection for Best Low-Cost Day Trading Platform because it provides impressive platform features while levying no direct costs on its users.
Quick and easy account setup
No fees or minimums
Extended hours trading
Robust desktop and mobile trading platforms
Available paper trading
Limited selection of assets
Payment for order flow can lead to slower execution speeds
Below average customer support
Limited educational materials
No income on excess cash
Where many brokers claim to be low-cost brokers, Webull essentially has zero (direct) costs. Users of Webull will enjoy commission-free trading of stocks and ETFs, along with no account minimums or deposit requirements.
Founded in 2017, Webull is a Chinese-owned broker and trading platform headquartered in New York City. Webull labels itself as a financial company driven by technology. Webull offers a strong low-cost platform for day traders looking to focus primarily on equities and ETFs. Traders who are looking to access managed futures, forex, fixed income, or advanced options capabilities will not find any at Webull.
As is the case with some other discount brokers, there is a price to pay for Webull’s low cost structure. This is primarily due to Webull receiving payment for order flow, which presents the potential for lags in transaction execution. In addition, the social tools offered by Webull and many other online brokers can promote overtrading through gamification. Still, Webull users have access to all U.S.-listed stocks, ETFs, cryptocurrencies, and options on a platform that is quite solid overall. Day traders who wish to establish short positions have access to approximately 2,500 stocks on Webull’s easy-to-borrow list.
The Webull trading platform has fairly impressive charting capabilities for a discount broker, with many popular technical indicators available, in addition to stock screeners and newly added options screeners. Those who wish to convert those screens to watchlists are able to do so with ease. For trading, users can set only basic market, limit, stop, and stop limit orders for order entry and exit. Paper trading is also enabled for those who wish to try their ideas out without risking capital. Users are provided with up-to-date news flow, and the Webull platform keeps a running tally of best performing industries and most popular ETF’s. Some of the drawbacks that traders may find are the inability to backtest or automate trading strategies, as well as a lack of the more advanced trading tools.
IBKR has many rivals that can challenge it in specific areas. TradeStation has better backtesting, TD Ameritrade’s powerful thinkorswim platform is more intuitive than TWS, tastyworks from tastytrade has a better all-around options trading experience, and Webull is cheaper. In this industry’s current state, however, no one broker can compete point-for-point with IBKR. It has the tools, asset range, speed, and global reach that make it a day trader’s dream in terms of constantly finding new price inefficiencies to exploit across markets and asset classes.
Of course, there is also Webull, which offers a surprisingly robust platform for its no (direct) cost approach. If you are looking to day trade on the cheap, Webull lets you get into the market for essentially nothing upfront. As you evolve as a trader, however, the allure of IBKR’s more expansive offering will become ever stronger.
Everything You Need to Know About Brokerage Accounts
What Is Day Trading and How Does It Work?
Day trading is the buying and selling (or selling and buying) of the same security during the same trading session to take small, frequent profits. Some day traders are discretionary traders, meaning they decide when to open and close trades based on current market conditions and intuition. Others are system traders who follow a predetermined set of rules to place trades. System traders often automate their strategies, allowing their computers to scan for, enter, manage, and close trades.
Unlike long-term investors who typically try to buy low and sell high, many day traders are just as likely to sell short. This means they sell high and buy low to profit from falling prices. While buy-and-hold investors tend to ride out market volatility by holding positions for the long term, day traders attempt to profit from it on a daily basis, going into and out of positions to exploit small price fluctuations. Because day traders rely on intraday price fluctuations and fast order execution, their chosen instruments typically trade under high volume (with good liquidity) and with substantial volatility.
What Are the Risks of Day Trading?
Day trading can be lucrative, but as with any type of investing, there are risks. One of the most significant risks for retail day traders is that they are competing against a stacked field of professionals who have the resources (e.g., speed, trading capital, technology, and software) to succeed. Without a level playing field, it can be difficult for retail traders to profit on a regular basis.
Another notable risk is that day traders often use leverage to enter positions, which means they can lose more than they risk on any given trade. This can be especially devastating with short trades—where the trader sells "high" in the hopes of buying to cover "low" at a profit—which have virtually unlimited risk since prices can continue to climb indefinitely. One more significant risk is being undercapitalized. Traders who don't have enough trading capital can burn through their accounts quickly, putting an early end to their day trading careers. What's more, traders who fund their accounts with anything but risk capital stand to lose more than their trading accounts.
How Do You Start Day Trading?
If you decide that day trading is right for you, start by opening an account with a broker that offers paper trading (aka simulated or "sim" trading) so that you can practice trading before risking real money. Interactive Brokers, TradeStation, and Webull all offer simulated trading environments to help you hone your skills and try out new ideas. Be sure to practice your order-entry skills to minimize the risk of making costly errors when placing trades—for example, hitting the buy button when you meant to sell. Also, take the time to learn the platform's features so you can take full advantage of them when real trading starts.
While you're practicing and learning how to use the platform, you can develop and fine-tune your trading plan. Before risking real money, you should have a written trading plan that you can review before every trading session. Be sure to evaluate your trades at the end of every session so you can keep track of what's working, and what's not. Keep in mind that markets change over time. A day trading plan that works today may not be as profitable next year or even next month, so you have to continually evaluate and adapt your plan.
When you begin trading with real money, start small. Once you have more experience (and a proven track record), you can trade larger positions.
How Do Day Traders Use Online Brokers?
Day traders may place their trades manually, often from a chart, or set up an automated system that generates orders on their behalf. Fundamental data is not a concern, but the ability to monitor price quotes, price volatility, liquidity, trading volume, and breaking news is key to successful day trading.
Day traders often prefer brokers who charge per share (rather than per trade). Traders also need real-time margin and buying power updates. Each broker ranked here affords its day-trading customers the ability to enter orders quickly by customizing the size of trades and turning off the trade confirmation screen. We sought brokers that allow traders to place multiple orders simultaneously, designate which trading venue will handle the order, and customize trading defaults.
What Should You Consider When Choosing a Day Trading Platform?
A key consideration for day traders is trading platform quality, which can impact things such as execution speed and price quotes. Day traders, especially those who trade using their own algorithms, need flawless data feeds or they risk entering orders based on errors in the data. In an environment where high-frequency traders place transactions in milliseconds, human traders must possess the best tools. Most brokers offer speedy trade executions, but slippage remains a concern. Traders should test for themselves how long a platform takes to execute a trade.
Commissions, margin rates, and other expenses are also top concerns for day traders. Even if a day trader can consistently beat the market, the profit from those positions must exceed the cost of commissions. For a high-volume trader, commission costs can easily run into hundreds or even thousands of dollars per day. Traders can check these rates by contacting the broker or checking the broker's website, but most offer special rates for highly active day traders.
It is also important for day traders to consider factors such as customer service and the broker’s financial stability. Customer service is vital during times of crisis. A crisis could be a computer crash or other failure when you need to reach support to place a trade. The best brokers offer dedicated account representatives for highly active day traders to assist in this regard.
The financial strength of the firm is also important since small brokerages can and do go out of business, but the main player in whether or not you can recover your assets is the clearing firm. Take a look at FINRA's BrokerCheck page before signing on with a small firm to make sure it has not had claims filed against it for misdeeds or financial instability.
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. This year, we revamped the review process by conducting an extensive survey of customers that are actively looking to start trading and investing with an online broker. We then combined this invaluable information with our subject matter expertise to develop the framework for a quantitative ratings model that is at the core of how we compiled our list of the best online broker and trading platform companies.
This model weighs key factors like trading technology, range of offerings, mobile app usability, research amenities, educational content, portfolio analysis features, customer support, costs, account amenities, and overall trading experience according to their importance. Our team of researchers gathered 2425 data points and weighted 66 criteria based on data collected during extensive research for each of the 25 companies we reviewed.
Many of the brokers we reviewed also gave us live demonstrations of their platforms and services, either at their New York City offices or via video conferencing methods. Live brokerage accounts were also obtained for most of the platforms we reviewed, which our team of expert writers and editors used to perform hands-on testing in order to lend their qualitative point of view.
Read our full Methodology for reviewing online brokers.