When it comes to day trading or scalping, the broker we choose may have a tremendous impact on our long-term results.

While this may also be true for swing trading, day trading with the right broker may be the difference between being profitable and not.

That’s why it is really important to choose wisely and understand all the implications.

In this article, you’ll discover the types of brokers that exist, the ones that I consider the best for day trading, as well as the pros and cons of each one.

Let’s start with the three main types of brokers that allow you to trade forex, indices, or stocks.

Forex / CFDs brokers

Forex or CFDs brokers are probably the best ones for beginners.

On most of them, you can trade not just Forex currency pairs, but also Futures (indices, commodities, and precious metals), Stocks, and even Crypto coins.

Notice that when trading with a Forex/CFDs broker, you are not trading the real market.

Not trading the real market? What does that mean?

It means that you are not buying or selling from/to other day traders.

Instead, the counterpart of your trades is the broker itself, or a liquidity provider.

For this reason, it’s important to use a reputable and regulated broker.

Why?

Because a lot of these brokers may have “malicious intentions”.

The web is full of reviews from angry users whose accounts burned due to price manipulation from their brokers, hunting their stops and slipping their entry and exit prices.

Should we trust these reviews?

Yes and no.

Let me explain…

There are in fact brokers that manipulate the price and make the lives of their traders tougher.

But on the other side, a lot of these day traders don’t have proper trading knowledge, so they end up blaming the broker for their own failures. It’s always easier to blame someone else for our mistakes instead of admitting them. Those are the people that will have a really hard time succeeding at anything.

Also, competition between brokers is a real thing. And I do believe that a lot of them hire people to create fake bad reviews for their competitors.

Pros:

• You can trade almost everything from Forex to Futures, Stocks, and Crypto.
• The leverage offered is usually high, which can increase the potential return, and it’s essential when trading small moves like scalping.
• They are the best for beginners since you can trade without paying for platforms or market data.

Cons:

• The broker takes the counterpart of your orders.
• They are not allowed in the US and a few other countries.

What is the best Forex/CFDs broker?

ICMarkets is one of the best Forex/CFDs brokers out there.

They offer:

• Low deposits
• Spreads starting at 0 (great for scalping)
• Strong Australian regulation (ASIC)
• Free platform

Futures brokers

Futures brokers provide access to the futures market, which allows day traders to buy and sell contracts for future delivery of a commodity or financial instrument.

Futures brokers often offer a wide range of markets, including commodities, currencies, and indices.

Day traders can often trade on margin, which can increase the potential returns.

Pros:

• Good regulations
• They often offer a wide range of markets, including commodities, currencies, and indices.

Cons:

• You often need to pay for the futures trading platform.
• You need to pay to get the market data

What is the best Futures broker?

Worldwide known because of its platform, NinjaTrader is one of the most popular futures brokers.

Stock brokers

Stock brokers provide access to the stock market, allowing day traders to buy and sell shares in publicly traded companies, like the S&P500 companies.

Stock brokers typically offer a wide range of research and data tools to help day traders make better trading decisions.

Day traders can often trade on margin, which can increase the potential returns.

Pros:

• Good regulations
• Stock brokers typically offer a wide range of research and data tools to help day traders to find hot stocks to trade.
• You can choose between having a margin or a cash account to trade.

Cons:

• Some US stock brokers don’t accept non-US clients.
• They usually offer less leverage than Futures and Forex/CFDs brokers.

What is the best Stock broker?

Interactive brokers is very popular amongst day traders and investors.

Importance of Regulation and Safety

When choosing a broker for day trading, it’s important to make sure they are regulated by a reputable financial authority.

This provides an added layer of security and protection for day traders.

Additionally, you should look for brokers that are members of the Securities Investor Protection Corporation (SIPC), which provides a measure of security against broker insolvency in the US.

Trading Platforms and Tools

A good day trading broker will offer a reliable and user-friendly trading platform that is suitable for your trading style.

Some popular platforms include MetaTrader, TradeStation, and NinjaTrader.

In addition to a solid trading platform, it’s also important to look for a broker that offers a variety of research and data tools such as news feeds, real-time quotes and charts, and technical indicators.

Fees and Commissions

Fees and commissions are important considerations when choosing a broker for day trading.

Look for a broker that charges low or no commissions on trades, and has competitive fees for any additional services you may use.

Some brokers may also offer volume discounts or loyalty programs to help day traders save money on their trading costs. And these costs can be quite high since the day trading activity is by default about opening and closing several trades every single day.

Account Types and Minimum Deposits

Different brokers offer different types of trading accounts and minimum deposits.

Some may require a high minimum deposit, while others may offer accounts with lower deposit requirements.

Additionally, some brokers may offer different account types, such as a standard account or a premium account, which may have different features and benefits.

Customer Service and Support

Good customer service and support are essential for any day trader, especially for those who are new to the game.

Look for a broker that offers a variety of support options, such as phone, email, live chat, and a knowledge base.

Additionally, it’s important to consider the quality of the support provided, which can be verified by reading reviews and testimonials.

Tips for Choosing a Broker

Do your research

Look at multiple options and compare the features and benefits of each broker before making a decision.

Consider your trading style

Think about the types of trades you will be making and the tools and resources you will need to support your strategy.

Ask for recommendations

Talk to other day traders and ask for recommendations on brokers that they have had positive experiences.

Try before you buy

Many brokers offer demo accounts or trial periods, which allow you to test their platform and services before committing to a full account.

Conclusion

Choosing the right broker for day trading is a crucial step in your success in the markets.

By taking the time to research and compare different options, and considering factors such as regulation and safety, trading platforms and tools, fees, and commissions, account types and minimum deposits, and customer service and support, you can ensure that you have the right partner to support you in your trading journey.

Keep in mind that, you can always switch brokers if you feel you are not getting enough support and your trading is not going as planned.

But, do your research and make sure you are not falling into a trap of an unreliable broker.