Best Day Trading Platforms for April 2024

Day trading is the term for frequently buying and selling stock positions after holding them for short periods of time, and technically speaking, you can day trade on pretty much any broker's platform. But what is the best day trading platform for you? Here, we'll explore how to choose the best day trading platform, and what you should know before deciding to give day trading a try.

Day trading: A note of caution

Day trading carries risk of permanent financial loss. We strongly recommend first reviewing The Motley Fool's investing philosophy before considering day trading. The Motley Fool (The Ascent's parent brand) was founded with a long-term mindset of buy-and-hold investing; that means we believe long-term investing is critical to growing your wealth.

We created this page knowing that everyone's investing journey will look a little different, but wanted to note the risks of day trading for anyone who might be unaware. If you choose to engage in day trading, please do so with caution and an understanding of the financial dangers involved.

3 Featured Picks From Our Best Day Trading Platforms

There are a lot of options to compare, even on this page. It can be overwhelming! If you're looking for a place to start, here are some day trading platforms our experts recommend and why they like them:

• Robinhood: Great low-cost day trading platform
• E*TRADE: Standout option for stocks and options traders
• Tastytrade: Fantastic broker for futures investors

How to choose the best platform for day trading

In a nutshell, the best way to choose the best day trading platform is to decide what features and tools are most important to you. You can day trade with any online broker, but not all will be the best broker for you.

What is day trading?

The term day trading is often used to refer to any investor who frequently buys and sells stocks, but the true definition is someone who regularly buys and sells the same stocks during the same trading day.

Regulatory agency FINRA formally defines a day trader as someone who buys and sells the same stock during the same trading day at least four times within a five-business-day period. This is known as a pattern day trader.

How does day trading work?

Day traders try to identify patterns or trends to profit from short-term movements in a stock. For example, a day trader might identify a pattern in Apple's stock chart and predict the share price will rise. They'll buy shares of Apple and aim to sell it a short time later at a higher price. Active day traders attempt to earn profits on trades like this several times in a day.

LEARN MORE: How does day trading differ from investing?

What are the risks of day trading?

Day trading can be extremely risky. As regulatory agency FINRA says, "Day trading generally is not appropriate for someone of limited resources, limited investment or trading experience and low risk tolerance. A day trader should be prepared to lose all of the funds used for day trading."

Simply put, stocks can be extremely volatile over short periods of time, and it can be painfully difficult, if not impossible, to predict their movements. There's no such thing as a 100% reliable day trading strategy, or anything close to it.

Plus, the odds simply aren't in your favor when day trading, thanks to the bid-ask spreads of stocks. In simple terms, the price you can readily sell a stock for is typically lower than the price you can buy it for at any given time. Usually, the difference between the two is just pennies, but when you're trading in and out of positions all day, you'd be surprised at what a disadvantage this creates.

Day trading can be especially risky if you're using margin or options to trade, or if you trade by placing short sale transactions, as these can make your account especially volatile. In fact, in some cases where trades go wrong, it's possible to lose more money than you invest.

LEARN MORE: What is stock market volatility?

How much money do I need to start day trading?

The short answer is that it depends how active you want to be in the stock market, and how long you plan to hold stocks. If you simply want to buy and sell stocks every so often, there's no set-in-stone minimum.

However, it's important to know about the "pattern day trader" rule and how it could affect you. By FINRA's definition, a day trade occurs when you buy and sell the same stock in a margin account on the same day. (Note: If your account doesn't have margin privileges, day trading is typically not possible.)

According to FINRA's rules, you'll be flagged as a pattern day trader if you complete four or more day trades in a rolling five-business-day period. And once you do this, you'll typically be considered a pattern day trader, even if you don't continue to meet the definition over time -- part of the rule says a broker can identify you as a pattern day trader if there's a reasonable belief you'll engage in day trading.

Here's why this is so important to know. If you are identified as a pattern day trader, you will need to maintain at least $25,000 of equity in your account. You don't necessarily need to use it all to day trade. For example, if you hold long-term investments, it counts toward the total. But it must be in your account if you plan to day trade. There are other limitations that apply to pattern day traders, but this is how it applies to the capital requirements.

Is day trading worth it?

It depends. While study results vary dramatically, most agree on one key point -- the majority of day traders lose money. To be fair, with the emergence of no-commission online trading, the odds are more favorable than they used to be, but don't make the mistake of thinking day trading is easy money. If you really want to give day trading a try, the best thing you can do is to learn as much as you can before putting your money at risk. This includes, but is not necessarily limited to:

• Study pattern recognition and trend following techniques.
• Learn about ways to limit your risk, such as placing stop losses.
• Learn how to control your emotions, especially when trades don't go your way.
• Practice day trading with "play money." Most trading platforms have a feature that will allow you to do this.

In short, there's no easy answer to the question "Is day trading worth it?" It depends on how much effort you're willing to put in, and whether you have the skills to be successful.

Additional resources

• Investing money for beginners
• Is a buy and hold investing strategy right for you?
• Can you buy a stock and sell it in the same day?
• How to invest in stocks
• Long-term investment strategies
• How to open a brokerage account

Brokerages we evaluated for consideration on this page: Acorns, Ally Invest, Axos Self-Directed Trading, Betterment, Cash App Investing, Charles Schwab, Delphia, Domain Money, Ellevest, Empower, eToro Brokerage, E*TRADE Core Portfolios, E*TRADE, Fidelity, Fidelity Cash Management, Fidelity Go®, Firstrade, FOREX.com, Interactive Brokers, J.P. Morgan Self-Directed Investing, M1 Finance, Magnifi, Marcus Invest, Merrill Edge® Self-Directed, moomoo, NinjaTrader, Personal Capital, Plynk, Prosperi Academy, Public, Robinhood, Rocket Dollar, Schwab Intelligent Portfolios, SoFi Active Investing, SoFi Automated Investing, Stash, Stockpile, Tastytrade, Titan, Tornado App, TradeStation, Tradier, Vanguard, Vanguard Digital Advisor®, Wealthfront, Webull, Zacks Trade.