Best Forex Broker For Day Trading

Best Forex Broker For Day Trading
Best Forex Broker For Day Trading Comparison Table
Online BrokerMinimum DepositTrading PlatformsAbout
$100
Minimum Deposit
MT4
Online Trading Platform
FXPRIMUS is an MT4 Forex broker supporting day trading via EAs (for MT4 automated trading) and offering a range of different types of markets to trade from Forex to Futures to Stocks CFDs
About
$200
Minimum Deposit
MT4, MT5, cTrader
Online Trading Platforms
Pepperstone supports Forex day trading via a range of platforms including relatively user friendly cTrader and additionally offers MT5 (the successsor to MT4) with 1000+ Stocks CFDs as well as MT4
About
$200
Minimum Deposit
MT4, MT5, cTrader
Online Trading Platforms
IC Markets allows Forex trading styles from the very short to longer frequency and from low to high volume trading, including providing 1650+ Stocks CFDs for Stocks CFD day traders
About
$1000
Minimum Deposit
MT4, JForex
Online Trading Platform
Dukascopy Bank does not restrict trading styles, and provides relatively user friendly JForex, with 100s of Stocks CFDs, thus automated Forex traders and Stocks day traders can use this platform and provides MT4 which is a platform designed for Forex day trading
About

Forex Brokers For Day Trading

Day trading is short term trading where the trader is not holding positions over a number of days. The actual time frame traded can be much shorter than a day. The idea of day trading comes from trading Stocks within a market session. That is, the trader trades the NY Stock Market within its daily open and closing session, rather than holding a Stock over a longer period. However the Forex market operates continuously during the week, even though it itself is divided into geographical based intra-day sessions. So for Forex, the idea is that the trader trades within a 24 hour time frame, but typically within market sessions and can in fact make many trades within a 'day'.

Trading Stocks within a session can call for different techniques than holding Stocks longer term (for example more technical or using fundamental analysis based on news as well as the underlying company). Traders though tend to open and close trades Forex within a day trading time frame. This is partly because Forex tends to lack a feature of Stocks, that is the capacity for sustained grow in value over time (though Stocks can also fall over time as taken advantage by short-sellers or not move much at all).

Thus holding a longer term Forex position can become highly problematic, as the potential for it to retrace deeply from the desired position when the trader is making a directional trade may increase over time. In this case though the trader may be applying fundamental analysis and believe it will eventually go in the desired direction, as long as they can withstand the retacements. That is Forex pairs do indeed have longer term trends perhaps based on an interest rate decisions or differential between the pairs, but as part of their nature can reverse this.

More typically, the trader can follow a pattern over days or longer, but opening and closing positions as they do thus day trading still even if they have a longer term view. Put simply the Forex market tends to look structurally similar as one goes though time frames, while the Stock market can look different (but more like the Forex market on short term day trading time frames, hence similar techniques can be used for both markets on a day trading time frames). However the trader may still stick with a Forex market session, as they have a pattern in and of themselves of pre-market, open, market session, close and post-market. Thus trades may naturally have an open and close within the session.

As the trader looks deeper in and further out on Forex patters, similar structures can be seen, consisting of directional moves and retracments falling into patterns intermixed with rising and falling volatility and momentum. So on longer term time frames there can be trends and other patterns worth following, but the retracements visible as the trader looks to shorter term time frames can make holding these position problematic. Hence longer term techniques may be applied which are built on opening positions and closing them when the waves of the move are against the position. This is partly because Forex tends to be traded on higher leverage as well, thus amplifying the effect of shorter term moves.

Stocks are based on companies and companies can grow. Forex is based on relative valuations of currencies for individual economies, thus the ebb and flow of relative value creates complex moves which are amplified by leverage. Hence Forex is primarily a day trading activity, though it can also be held on medium and in some cases even longer term time frames.

Day trading techniques include. as noted, trend following even if this stretches out for more than a day (i.e. opening and closing positions), that is the context and rationale for the trade can be more than a day and sometimes much longer, as well as more naturally shorter term range trading. However it also includes trades which are based on shorter term events, such as trading on shorter term time frames or market events, even if using longer term time frames as a gauge for what is happening on shorter terms.

Day trading lends itself to both automated and non-automated trading. This is because shorter term trading or repetitive trading based on shorter term patterns can be tiring or in some cases impossible for the human trader to execute and manage. As time frames get shorter, then robots can be more efficient, but also more efficient at creating deeper losses. Trades taken in under a minute tend to be classified into scalping and can be performed by humans as well.

Scalping is based on short term patterns driven by momentum and indicator signals executed by robots or humans, where positions are opened and closed rapidly. News trading is another day trading technique, as it is based on the reaction of the market to news data, such as economic news or political events. The market either reacts (or does not) in a very short term time frame. Trading before and after release can create longer trades, but the effect tends to be within a session. In later sessions a repeat of the release may be visible to some extent.

In essence the idea of day trading is to be able to trade on patterns which are driven by a wide range of factors as the market fluctuates in the shorter term. This is partly why it is hard, as these fluctuations are varied and complex and many different patterns can be created at a given time. However the trader has the potential advantage of riding these waves of liquidity driven movement within sessions.

So a good broker for day trading is one which supports the kind of techniques a Forex day trader may use or want to use. The brokers in table above all support human and robot trading and use high speed order execution (important for shorter term trades) and can have low spreads, with a commission charge. They each allow scalping and news trading as well as other techniques which the trader may apply.

Best Forex Broker For Day Trading

The pick of best Forex broker for day trading is IC Markets. IC Markets is an no dealing desk broker, meaning it makes use of algorithms to route and execute trades, rather than using a dealing desk. It supports day trading styles such as scalping and news trading and provides MT4, MT4 and cTrader, three platforms which can be used by Forex traders when day trading. IC Markets additionally allows social and copy trading, which is information or techniques the day trader may want to try as well.

IC Markets has a relativley large number of market available, with 1750+ including 1650+ Stocks CFDs, and a relatively wide range of markets, including 60+ Forex pairs. The trader may plan and execute their own trades or can use online trading robots to execute trades for them. Thus in effect a wide range of traders can use IC Markets, from Forex traders who want very rapid automated order processing to Forex copy traders to those who want to day trade Stocks CFDs.

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