In any profession, you need the right tools to get the job done effectively.
As a day trader, one of your most vital tools is your trading platform. It’s literally your gateway to executing trades, so it’s hugely important to choose a good one.
Of course, that brings up the big question: What’s the best trading platform for day traders?
Should you go with TD Ameritrade and its high-quality trading platform, or is advanced mobile trading with E*TRADE superior? Or is it best to develop your trading skills with StocksToTrade and to choose a broker that can be integrated with the platform?
Download the key points of this post as PDF.
In order to identify the platform or platforms that are right for you, it’s important to get educated on the different offerings.
In this post, I’ll educate you on trading platforms for day traders — why they matter and what you should look for in a good one. I’ll also introduce you to some of my favorite platforms to help you gain a better idea of what you might want to look for in a trading platform.
Table of Contents
- 1 What Is a Trading Platform?
- 2 Best Trading Platform for Day Traders
- 2.1 Benefits of Choosing TD Ameritrade
- 2.2 Benefits of Choosing E*TRADE
- 2.3 Develop Your Trading Skills With StocksToTrade
- 3 The Bottom Line
What Is a Trading Platform?
Even the most talented Olympic diver couldn’t win the gold if they didn’t have a sturdy diving board to jump from.
As a day trader, you can think of your trading platform like your diving board. It doesn’t do all the work for you, but rather it’s a vehicle you use to make things happen. It’s the starting point from which you leap (carefully, I hope) into trades.
A trading platform is the software that allows you to manage your market positions through a third-party facilitator. You can open and close your positions through the platform, as well as manage them.
These days, your platform will typically be an online trading platform. These are often offered by brokers. Frequently, the platforms themselves are free in return for maintaining an account with the broker.
If you believe there’s no such thing as free lunch, you’re right to be wary. There may be stipulations required to keep the platform fee-free, such as maintaining a specific monthly balance or conducting a certain number of trades per month.
While a trading platform is technically as simple as that, in today’s competitive atmosphere, many platforms offer additional bells and whistles to make themselves more attractive to traders.
These days, many trading platforms will come with other offerings, such as charting software, scanners, news feeds, real-time quotes, and other fundamental and technical analysis tools.
The platforms are sometimes specific to a particular market; for instance, options or futures.
Some platforms are best known for one type of trading but might not be as widely embraced for another type. For instance, the platform that one trader loves for forex trading might not be as well known for its options trading functionality.
Importance of Choosing the Right One
Why does the trading platform for day traders you choose matter so much?
For one thing, you’ll be best positioned for success when you choose a trading platform that suits your personal style.
Your comfort as a trader is key because this is literally the launching pad for every one of your trades! Do you feel good on this platform? Does it work well with your personal constitution?
Second, you need to choose a platform that offers the resources you want and need in your trading toolbox.
For example, if you rely on Level 2 quotes or in-depth charting tools, a platform that doesn’t offer these things will probably just cause you grief.
You’ll need to constantly click over to another site or program to monitor these things, then go back to your platform to make use of the information. So it’s good to make sure that a given platform offers the tools you want before you commit.
The specific rules or limitations of your platform should also be strongly considered.
For instance, if the platform in question requires X amount of trades per month to remain free, you must strongly consider if this is do-able and sustainable to you. You don’t want to start bleeding your account in little ways!
Also, take specific care when choosing a platform offered directly from the broker. Consider the platform and the broker itself when making this decision.
- Is it a well-respected broker?
- Do they have good reviews?
- Do you trust them?
I should note that while many platforms are attached to a specific broker, this is not always the case.
For instance, a platform like StocksToTrade is a stand-alone platform that has broker integration. This means you can make use of the tools they offer and pair it with a variety of different brokers.
Best Trading Platform for Day Traders
OK, let’s get down to nuts and bolts here. There are a wide variety of trading platforms out there, and their offerings are all just a little different.
So … which ones are the best? Here are some of my personal picks, and the ones that I personally use.
Benefits of Choosing TD Ameritrade
Many will say that TD Ameritrade is the best trading platform for day traders, and with good reason.
I’ve used TD Ameritrade, and I know plenty of other traders who swear by it and use it all the time.
TD Ameritrade is one of the biggest and well-known brokers out there. It’s a publicly traded broker, with millions of users and hundreds of thousands of trades executed daily.
In addition to being well-trafficked and large, they’re well regarded and respected. As a broker-platform bundle goes, they’re generally seen as a trustworthy and credible one. Here are some of the reasons why.
High-Quality Trading Platform for Day Traders
Sometimes, a broker that also offers a platform falls into a sort of ‘jack of all trades, master of none’ sort of situation. This isn’t the case with TD Ameritrade, which does a good job on both fronts.
TD Ameritrade’s trading platform Thinkorswim was a separate entity until 2009 when TD Ameritrade took it over. In terms of platforms, it’s considered one of the biggest and best.
On the platform, you have the ability to trade stocks you can trade stocks, options, futures, and forex, as well as other securities. They also feature chat rooms and daily programming offered by TD Ameritrade professionals.
They also offer a bunch of nice touches, including live-streaming CNBC to keep track of the news, an interactive market calendar that helps you access events, and the ability to link up your desktop and cell phone or tablet so that you can sync the symbol you’re viewing on both.
One caveat? I don’t consider TD Ameritrade to be great for shorting. I think it’s better for buying, and that’s primarily how I use them.
So how do I handle the problem of shorting? I look elsewhere. I maintain multiple accounts:
a TD Ameritrade accounts for buying, and another for short selling.
TD Ameritrade doesn’t have an account minimum, so I don’t have a problem with maintaining multiple accounts. It’s up to you whether or not that’s too annoying to maintain.
TD Ameritrade Fees
One of the most wonderful things about TD Ameritrade is that there are no subscription or platform fees, and there’s no minimum cash deposit amount required to create or maintain an account.
Don’t bust out that happy dance quite yet, though. At $6.95 a pop for transaction fees when trading stocks and ETFs, they have one of the higher fees out there — that’s double or more than the transaction fee of many discount brokers.
That’s not the only fee you might come up against with this platform/broker. TD Ameritrade charges $25 for a domestic wire withdrawal, $75 for account transfers, and you’ll have to pay a broker fee plus $25 for margin sellouts.
But then again, don’t dismiss them just because of the higher-than-average fees.
I do have to say this for TD Ameritrade: While the fees are on the higher end, they’re not necessarily hidden. It’s easy to access the fee structures, so it doesn’t feel like they’re being underhanded about it.
TD Ameritrade occasionally offers promotions, too, so you may be able to sign on at a time when you can take advantage of an offer like “X trades with no commission” or something along those lines. Hey, every bit counts!
Additionally, since the account itself has no minimums, you won’t be subject to a fee if you dip under a certain amount or if you’re inactive — like you might with a bigger broker like Interactive Brokers.
Don’t dismiss TD Ameritrade just because they have higher fees, because they have a lot to offer.
You need to consider the trading tools that you’ll gain from Thinkorswim, and the other resources offered by the platform. If these perks and services really so help you make more educated trades, then they can be well worth the transaction fee.
Order Execution Time and Customer Service
When it comes to order execution time and customer service, TD Ameritrade gets a big thumbs up in both departments.
The platform is reliable and fast, so you can rest assured that your orders will be put through in a timely fashion.
The customer service is similarly impressive and responsive.
The team is available 24/7 and can be contacted via multiple ways. You can actually phone in and talk to a real person, with minimal wait time. The customer service team is also impressively well educated.
Stock Chart Analysis with TD Ameritrade
One of the biggest draws for TD Ameritrade is their powerful stock chart analysis tools.
As you already know from reading this blog, fundamental and technical analysis are so important for trading survival and key to potential trading success. My Trading Challenge and day trading patterns are pretty strongly tied, as identifying trends is a big part of my teaching.
TD Ameritrade has a lot of great software. With their trading platform, you’ll get access to plenty of charts with real-time data, and the charts come with technical information and studies that can be highly customized and tailored.
You can use any number of built-in indicators, and you also have the capability to create your own indicators, as well (if you don’t have the capability, there are plenty of developers who make them, too).
It’s reliable and advanced, but it’s also pretty user-friendly and easy to customize, so a lot of traders are counted among its fans. It has a high rate of customer satisfaction, and that’s usually a telling thing!
Benefits of Choosing E*TRADE
One of the other biggies when it comes to a broker-offered platform is E*TRADE.
Like TD Ameritrade, E*TRADE is largely beloved and plenty will be quick to say it’s the best trading platform for day traders.
As a broker, E*TRADE is well respected. Personally, I find it better for selling short, but it offers the ability to trade the same equities as TD Ameritrade.
As a platform, it has plenty to offer: You can analyze and trade stocks, options, ETFs, and futures from the web or virtually any tablet device.
Here are some of the specific benefits …
Advanced Mobile Trading
One of the biggest draws and the most commonly-cited example of why E*TRADE is great is its mobile apps. Over and over, they’re frequently seen as the best.
They have two different mobile trading options: E*TRADE mobile, and the advanced mobile trading app, OptionsHouse.
E*TRADE mobile is respect-worthy, giving you access to your account, real-time quotes, charts, and streaming news. You can execute trades, and from some operating systems you can have more advanced trading.
The OptionsHouse app lets you take your mobile trading to the next level, with customizable features, interactive charts, technical analysis and more.
OptionsHouse is the mobile companion to their web-based platform of the same name.
As a mobile platform, it’s incredibly powerful and detailed so that you can really keep up trades, even when you’re away from your computer.
You can use interactive charting software and technical studies from your phone or tablet, and get real-time market quotes in streaming time, as well as news, earnings, gains, and more. So you have plenty of tools to do your research from your phone.
You can trade and modify orders right from the platform, so as a one-stop mobile shop, it’s got a lot to offer.
In terms of fees, E*TRADE is comparable to TD Ameritrade, but with a few key differences.
First off, you need to have a minimum balance when opening an account with E*TRADE. It’s only $500, which isn’t too much, but it’s definitely more than TD Ameritrade, which doesn’t have a minimum.
The trade fee is $6.95, with active traders receiving a discount of $2. How do you score this discount? “Active trading” is defined as 10+ trades per month, which for some traders is a snap, for others a stretch. So keep this in mind.
Other fees are similarly in line with TD Ameritrade, for instance up to $75 for account transfers, $25 for wire transfer fees, etc.
Once again, while the fees are on the higher side, they’re not underhanded about it: It’s easy to find all of the fees listed on their website.
Order Execution Time and Customer Service
E*TRADE also gets a gold star for both order execution time and customer service.
The platform is fast and dependable, so you don’t have to stress about your orders going through in a timely fashion. This goes for both the mobile and web-based platforms.
E*TRADE also brings it in terms of customer service. You can contact them at by phone, email, chat, and at their branches, if you happen to be close to one.
Their associates do a consistent job of handling issues and answering questions, and the response time is very good.
Stock Chart Analysis With E*TRADE
E*TRADE has plenty of resources to assist with your stock research.
First off, they have a nice-sized library of learning materials so you can guide yourself through some of the basics of the stock market and trading. These include videos, webinars, and articles.
They also have some in-store informational events if you’re interested in things like how to get started with mutual funds or options, etc.
These are largely more general though, so to learn more about the stock market, get enrolled in my Trading Challenge — it can help you take these basics and learn how to put them to work in an actionable way.
In terms of charting, OptionsHouse is impressive. It used to be a stand-alone platform, but E*TRADE acquired it in 2016. It has lots of data, a wide variety of charting tools, technical studies, easy to execute market orders, customizable options, and more.
E*TRADE Pro is an even more tricked-out option, but let’s not get ahead of ourselves. It’s only available to those with accounts of either $250,000 or higher, or if you’re executing at least 30 stock or option trades per quarter, which is a LOT.
Develop Your Trading Skills With StocksToTrade
StocksToTrade is one of my favorite platforms. Designed by traders for traders, this is the ultimate software for scanning and research. I even helped with its design!
It’s among the most powerful and intuitive online stock trading software out there. It’s got paper trading, trainings, an informative (and free to access) blog, a chat room, Level 2, financial news, watchlists, and trainings available all in one place.
It’s like a one-stop shop for trading resources, and the ultimate membership to help develop your trading skills.
Until recently, the one drawback with StocksToTrade was that it had all of these resources but you needed a separate brokerage account to actually execute trades.
While it was worth clicking from window to window, I won’t lie: it was kind of annoying. But happily, now that has changed. While StocksToTrade is not itself a broker, the platform now has broker integration.
This means that you can pair StocksToTrade’s awesome software with your brokerage account.
Stock Chart Analysis and Trading Alerts
Let’s talk specifically about the stock chart analysis and trading alerts at your fingertips with StocksToTrade.
Charts and chart patterns are my jam, and the platform has smooth-running charts, which are fast and reliable.
Take your pick in terms of chart type: you’ll find bar, candlestick, and line charts. You can alter the time frames so that you can look at by-the-minute results or pull back for a longer view such as monthly.
Built-in momentum indicators like moving averages, Bollinger bands, MACD (Moving average convergence divergence) and more help you make the most of the charts without switching screens. You can also even adjust the color and visuals of the indicators for easy tracking.
When performing scans, you can filter stocks easily. Not to show off, but you can actually perform scans using pre-calibrated criteria I’ve designed for the platform, which can be a great way to get started.
You can also create customized scans based on what you’ve found works for you using your trading journal.
And not only can you perform scans on stocks from the NASDAQ and NYSE, but you can also filter through pink sheets, AMEX, and OTCBB.
Basically, it’s the most powerful scanner across the board, and the perfect place to begin creating your own watchlists to monitor and potentially eventually trade.
Alerts are also another great feature of the site. StocksToTrade is integrated with Twitter, so you can track hashtags associated with certain investments.
This can further help you keep track of news and filter down your stock choices so that you can distill it down to the best picks. You can further filter down the news based on time frames, watchlists, keywords, and other criteria.
It’s the best way to combine technical and fundamental research on one platform!
Opportunity To Develop Your Trading Skills
StocksToTrade is a resource that I suggest to all of the students in my Trading Challenge because it offers the opportunity to develop your trading skills.
Not only does it have the professional scanning software, but it offers the resources so that you can learn how to use them.
For example, the powerful paper trading module is the perfect way to build up your trading chops.
If you’re not familiar with paper trading, it’s simulated trading. You’re choosing stocks, putting in orders, and watching to see if your trade is profitable … but without using actual money.
Paper trading is like a stepping stone to live trading. The tools you have at hand with StocksToTrade can equip you with what you need to make educated trades. Combined with hard work and study required of my trading challenge, it’s a winning combo.
Of course, this is just one of the many resources available. They also have a great blog and learning resources on the site that can help you become the best trader you can be.
The Bottom Line
So, which is the best broker for day trading penny stocks?
The good news is that there’s not necessarily a wrong choice. It’s mostly about doing research and figuring out the platform that is the best choice for you.
The platforms listed here are some of the ones that I believe are the best, but ultimately you’ve got to choose a platform that suits your specific trading style.
Let reading this post be your first step in platform research. Consider the platforms listed here, but also consider seeking out advice from other traders and trying some of them out.
Finding the right platform is one of the best ways to set yourself up for success, so don’t underestimate the importance of this step!
What’s your favorite trading platform for day traders — and why? Share your feedback below!