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The world of trading on the internet has evolved significantly in just a couple of years. A few years back, large institutions with major investments available were the only ones who could initiate trades in the forex market. Today, the internet allows anyone with a computer or mobile device to trade from home. Different trading strategies exist - with day trading becoming quite a popular option.
Day trading is a technique used by those who have more time on their hands. A career as a day trader demands more consistent activity from your side. The trader needs to do continuous research, watch trends, analyze current markets, and then execute appropriate trades.
Not all forex trading companies can accommodate those who wish to become day traders. Due to the constant need for analysis, a platform should be able to give you access to the tools needed to initiate trades that would result in profit. We take a closer look at how you can choose the right day trading platform for the forex market. We also share our selection of the top five brokers you can use.
How To Choose The Best Forex Broker For Day Trading
Day trading is somewhat different from more traditional forex operations. Instead of setting up a trade that may only be stopped a month later, day trading involves more active operations. A trade is initiated in such a timely manner that ensures it can be closed before the market closes at the end of the day.
The complexity and more consistent activity associated with day trading require a platform that can provide the user access to appropriate tools. When you are looking at the options that are available, there are a few things that you should take into consideration. Make sure you look at each of the factors we mention below - this helps you determine which day trading broker is the right option for you in particular.
Best Forex Fees
Fees associated with account activity are generally one of the initial things you want to look at. There’s no use in trading for profit when most of the money you make goes toward fees that are charged by the platform.
Take a look at all of the Forex fees that are charged to your account when signing up with the trader. Here are a few factors to consider when looking at the fee structure:
See if the company charges fees for deposits and withdrawals. Some companies have a fee that is charged whenever you deposit money into your account or when you request a withdrawal.
Check transaction fees and commissions. You may be charged every time you initiate a trade position or when you close the position.
Some companies may charge a monthly fee on your account. This is usually a low amount, but if you do not trade with large amounts, then it could definitely chip away at the profits you make.
Check for inactivity fees too. Some companies will charge you a fee when your account is inactive for too long.
STP/ECN Account
It is a good idea to opt for a company that offers STP and ECN accounts. STP is also known as a Straight Through Processing account. This can help to provide a more direct connection to the liquidity provider when you open a new trade. ECN is known as Electronic Communications Network and serves as a type of order matching execution system. An ECN account helps to provide a fixed premium as a commission fee. This helps to avoid inflation that often occurs, which increases the expected commissions that the person has to worry about.
Additional Services
Apart from checking the authority and trust rating of a platform and seeing how much they charge, there are a few extra things that you should take into account. Take a look at any additional services that are offered by the company. These can be helpful when setting up trades or assisting in the analysis of trends related to forex. Read also: Is Metatrader 5 good for day trading? in the TU article.
Some of the services that you should consider looking for include:
Multi-platform support: Make sure the company you register with provides support for the trading platform you prefer. A majority of regulated forex brokers give you access to the MetaTrader platform. This has become a preferred platform for many traders as it comes with access to a wide range of add-ons, indicators, and other features to help drive your decisions.
Charting Tools: See if the platform offers you any type of charting tool. These can be exceptionally helpful, especially for day trading. You need to see how the trend runs with a specific forex pair to make accurate predictions. The charting tools sometimes even allow you to initiate a transaction without having to navigate back to the dashboard.
Research: Some forex brokers use teams of experts to help with research. These can also be helpful when you are trading. The researchers will publish reports - sometimes on a daily basis - related to current trends in the forex market. You can then use this information to determine what the best trade opportunities are for the day.
Education: Many people are looking to sign up for day trading for the very first time. This can be risky and daunting - so you need to build up skills and knowledge to limit the risks you take on. Education on a day trading platform is critical. Make sure the company offers video and text guides to help you understand different strategies and techniques.
Top 5 Best Forex Brokers For Day Trading In Forex
Due to a large number of brokers offering day trading opportunities, making the right choice can feel almost impossible. Fortunately, many companies have been established for over a decade and proven to be trustworthy within the industry. We focus on five of the top choices that can give you access to day trading in forex. These brokers have been hand-selected by the experts at Traders Union, following a comprehensive review process and thorough analysis of the current brokers that specialize in forex day trading.
The high trust ratings associated with Admiral Markets are one of the primary reasons why they are a top choice. With a minimum deposit of $100, you can get started with day trading without risking too much. Trust is also shown through two tier-one regulators that are associated with Admiral Markets, something that a majority of other platforms tend to lack. In addition to these, Admiral Markets also have two tier-two regulators.
When trading forex with Admiral Markets, there are 47 pairs that you can choose from. The company also gives you access to a range of other trading options and features its own built-in social trading platform. The average spread on EUR/USD trades is 0.6, with an all-in cost of 0.7.
Admiral Markets use the MetaTrader platform as a standard option for its customers. Instead of giving you access to a standard MetaTrader account, a trader profile with the company allows you to access MetaTrader Supreme. This can be used with both MT4 and MT5. The Supreme edition comes with a total of 12 advisors, who are all experts in the forex industry. You also get access to 20 custom indicators, which can greatly help on your journey to becoming a successful day trader.
Your capital is at risk. Via Interactive Brokers' secure website.
Interactive Brokers is a complete solution for online trading, accommodation traders who want to focus on forex, day trading, ETFs, and CFDs. The company has been in operation for well over 10 years and is a preferred choice among traders who are more active. The range of analytical tools available at Interactive Brokers gives you more data to work with. In turn, you get an opportunity to make more accurate decisions when initiating a day trade.
With an account minimum of $0 and some trading pairs giving you $0 commission options, this is an ideal broker for people who want to get started with a minimal amount. There are 4,300 different no-commission transaction options available. The range of research tools that you gain access to also helps drive more informed decisions. There is also a range of different educational resources available, which helps you gain some initial knowledge in the market.
There are two account types available. This includes IBKR lite and IBKR pro. The lite account is an ideal option for those who have a more limited budget. The pro account comes with a monthly account fee, which is something to take into consideration - making it a more appropriate option for people who trade more frequently.
Interactive Brokers also gives you access to a wide range of support services. There is a 24-hour telephone number that can be used for fast support. A chat function is also available on the website. Alternatively, you can send an email to the customer support center as well.
Tickmill is one of the more recent additions to the forex trading market. The company was first founded in 2014. Even though still new in the industry, Tickmill has gained a positive reputation and is already used by a large number of investors and traders. Tickmill gives you access to a variety of different tools that can be used to profit - including forex dray trading options.
Tickmill comes with its own web platform, as well as support for third-party tools. While there is no support for MetaTrader 5, fans of this platform can sign into their Tickmill account on the MetaTrader 4 software. The platform also offers ZuluTrade support and comes with its own proprietary desktop software.
Charting functions are available on Tickmill. There are 51 indicators that are active on the charting system, along with 31 drawing tools. The company is constantly striving to improve the research provided to customers. There are automated tools available, including Myfxbook and Autochartist. A team of experts also offers daily findings of fundamental and technical analysis, with reports posted on the official Tickmill blog.
The minimum deposit for a new account registered on Tickmill is $100. Different account types exist, and some do require a larger initial deposit. The company offers VIP and active trader discounts, which can be useful for day traders. The average EUR/USD spread at Tickmill is 0.53, and the all-in cost is 0.32.
Your capital is at risk. Up to 75.93% of the broker’s non-professional clients incur losses when trading CFDs.
Those who want a larger variety of tools when trading often turns to IC Markets. The platform is known for its extensive selection of analytical tools, educational materials, and other resources that assists in the process of trading in the forex market. IC Markets is also an ideal option for those who have a keen interest in the international markets when setting up day trades. In addition to these factors, IC Markets is also known as an excellent option for people who want a platform that charges minimal fees. The lower fees charged for transactions mean you get to earn more in the process. Even though the company does have international market options, do take note that the portfolio is a bit limited - you only gain access to forex and CFDs. Since we focus on day trading in forex, however, IC Markets does fit the needs perfectly.
IC Markets have made the process of opening a new account quick and easy. Furthermore, making a deposit does not come with additional fees. There are also several withdrawal options available, of which many do not charge fees. No inactivity fees are charged by IC Markets. The company is regulated in Seychelles, Australia, and Cyprus. The platform supports 10 base currencies and gives you an opportunity to try out day trading through their demo account feature, which means you won’t be taking any risks while building up some initial experience.
Founded in 1977, HYCM is one of the oldest companies in the forex industry. The company initially focused on local trading accounts but has expanded to offer a digital system too. HYCM is regulated by two tier-one licenses, as well as two tier-two licenses. HYCM gives the trader access to different platform options, which offers diversity when finding a solution that works for you.
There are 69 trading pairs in the forex section of HYCM. These pairs can be used for day trading activities. Social trading features also give beginners a chance to copy the trades initiated by experts - and thus allow you to profit from the expertise displayed by other traders on the platform.
HYCM has its own platform, as well as offers support for MetaTrader. Both MT4 and MT5 can be used with HYCM. The average spread is higher compared to other platforms. Some people may also find the commissions charged by HYCM to be a bit higher - particularly when it comes to smaller trades. Overall, however, the platform does give the user access to a wide variety of features to help with their success in day trading. A demo account function is available from HYCM. In addition to the web platform and MT support, users can also download a desktop application if they wish to use HYCM’s own system for trading. Trading from charting is possible, with a total of 51 charting indicators and 31 drawing tools.
Can I Make Money In Forex Day Trading?
It is definitely possible to profit from day trading, but there are also a lot of risks involved - just like with any other strategy used in the forex industry. Furthermore, day trading requires more effort and is generally not a good option for casual traders. If you want to participate in day trading, you will need to ensure you have sufficient time available. You will need to continuously do research throughout the day - this ensures you open a position and close it at the right times to ensure you gain profit.
Basic Forex Day Trading Strategies
There are a lot of different strategies that can be used with day trading. With such a large variety of strategies, many people find it hard to determine which would be suitable for them. If you are new to day trading, you should consider starting out with basic strategies, which we explain below.
Scalping
Scalping is a useful strategy for those who want to initiate a higher volume of trades but only small profit amounts on each trade. You do need a very strict policy for exiting trades, as with this strategy, you generally cannot afford big losses.
Pivot Points
This is a type of technical indicator. It provides an analysis of the price level guide. The strategy helps you with the prediction of future movements in a specific forex pair.
Momentum
With a momentum strategy, you identify securities that are on the rise. When these securities reach the peak of the rise, then you sell them.
Forex Day Trading Example
Joey Gracia decided to try out Admiral Markets as a day trading platform for the forex market. He started by clicking the “Start Trading” button, which can be found at the top of the platform’s homepage.
Forex Day Trading Example - Admiral Markets
The registration process was simple to complete. Joey used his Google account to make the signup procedure faster. He had to complete a few important details initially. Following verification, Joey was ready to start his day trading operations.
After signing into the trading platform, Joey made a deposit of $3,000 and ensured the maximum risk he takes on each trade is $30. The reward-to-risk ratio on the platform was set at 1-to-1.5.
Joey uses a 15 minute chart and trades moving averages based on indicator signals. Even if for every 15 profitable trades the trader makes 10 unprofitable ones, this strategy will allow you to trade with a plus.
Methodology
Traders Union understands the concerns that you have when setting up a new trading account - especially beginners who want to explore the day trading market. This is why we used a strict set of rules and criteria when reviewing companies that give you access to day trading opportunities.
Throughout the research period, we focused on the following factors to determine which day trader brokers are the best:
Reviews were important throughout our research period too. We ensured traders find the platform provided easy to use.
Fees were another factor that was important to our researchers. We ensured minimal fees are charged, which gives you more profit with every successful trade.
Our experts looked at platform support too. We wanted to bring you brokers that offer multiple platform options to choose from.
Summary
Many brokers now offer traders access to day trading accounts, but the tools that accompany these accounts are not always adequate. Day trading requires the right tools to ensure your trades turn out to be profitable. Admiral Markets is currently one of the top choices, as their platform offers education, analysis tools, and more. We also looked at alternatives that can be potential options if you want to start with day trading. Take the tips we shared into consideration to ensure you make the right informed decision.
Expert Opinion
Start with a minimal deposit when day trading. This limits your risk. Make sure the spread is low and aim for a platform that doesn't take too many commissions. You want to maximize your profit while also ensuring the broker is trusted
Anton Kharitonov,
Financial expert and analyst at Traders Union
FAQs
Is forex good for day trading?
Many day traders use forex as a way to initiate trades. It is considered a good option when initiating day trading transactions, but it should be noted that consistent market analysis is needed with this strategy.
Which broker has the lowest minimum deposit?
It comes down to the type of trading opportunities you are looking for. Several companies give you an opportunity to start with day trading by making a minimum deposit of $100. There are also a few options that can be utilized with a lower deposit.
Can I start forex with $5?
Those on a low budget and only want to give forex a test can get started with as little as $5. It should be noted that profit will not be much with such a low deposit, but the opportunity to initiate trades with a 0.01 lot does give the person a chance to practice and gain some initial experience.
Can you day trade forex without 25K?
For day trading to be profitable, particularly when using forex, it is often advised to start with $25,000. This, however, does not mean one cannot make any profit with a lower deposit. There have been successful cases among people who deposited as little as $100.
Oleg Tkachenko is an economic analyst and risk manager having more than 14 years of experience in working with systemically important banks, investment companies, and analytical platforms. He has been a Traders Union analyst since 2018. His primary specialties are analysis and prediction of price tendencies in the Forex, stock, commodity, and cryptocurrency markets, as well as the development of trading strategies and individual risk management systems. He also analyzes nonstandard investing markets and studies trading psychology.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.
