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Intraday trading, more predominantly known as day trading or short-term trading, is the buying and selling of financial instruments within that very trading day. Day traders worldwide utilize intraday accounts to gain from price fluctuations in a broad spectrum of securities, it could be an equity, a commodity, or even a form of currency. Probably, it would be an understatement to say that the most important thing concerning an intraday trading account is to choose the right one. Let’s analyze the major features you should take into consideration while choosing an intraday trading account.
Low brokerage and fees
What can be deemed one of the most important aspects one can be careful about when choosing an intraday trading account? They are brokerage and fees related to the concerned transactions. As intraday trading is high-volume and happens quite frequently with buying and selling, the high brokerage fee works against maximizing profits. Look for competitive pricing structures such as flat-fee pricing and discounted rates for high-volume traders. Some brokers even offer zero-brokerage intraday trades and you want to capitalize if you are an active trader.
Easy-to-use trading platform
Easy-to-use trading platforms are very useful to perform successful intraday trading. Be it for the customer’s convenience, easy communication, or placing orders with ease, the platform must be user-friendly. The key components you should look for in a trading platform are as follows:
Real-time Data:
Real-time market data helps in finding out the actual position of the market with live quotes, charts, and news updates.
advanced charting tools:
Comprehensive charting tools featuring a range of technical indicators, drawing tools, and customizable timeframes allow the trader to view current trends in the market and identify trading opportunities.
quick order execution:
A trader’s practice involves intraday trading. A trading platform should enable order execution at a pace so that he is the first to take advantage of the markets once an opportunity appears.
Mobile compatibility:
With a trading platform coming with a mobile app, a trader will always be in a position to monitor trades executed and have an opportunity to execute trades from anywhere to follow the markets—therefore, no opportunity will be missed.
Strong risk management tools
The risks entailed in intraday trading are quite huge because the market value changes now and then. There must be some sound tools in place for risk management in any intraday trading account to ensure that traders are cushioned against huge losses. Some of the prominent risk management tools are:
Stop-loss orders:
These are those orders placed to sell a security automatically after it has attained a certain price. By doing so, it limits a potential loss.
A trailing stop-loss:
This variable stop-loss order remains dynamic with the movement of the price of that security in favour of the trader by holding in on profits while at the same time protecting against further downward risk.
Margin alerts:
Margin alerts inform traders when their account balance drops to a minimum, helping them avoid any forms of margin calls that may result in the forced liquidation of their positions.
Leverage and margin requirements
This will allow the trader to manage larger positions with a relatively lesser outlay of capital. The resulting increased power can magnify profits but, likewise, magnify losses. Before selecting an intraday trading account, one should be aware of the leverage and margin rates of a broker.
The ratio of leverage:
Experienced traders can be lured to higher leverage ratios, which enhance profits. But, you must be sure that the level of leverage you want can be supported by your broker according to your tolerance of risk and strategy of trade.
Margin requirements:
Realize the margin requirements posted by the broker; that is the amount of capital you should hold for your positions. Some brokers maintain a flexible margin policy, allowing traders to set their margin level depending on market conditions.
Research and educational resources
Having access to high-quality research and educational resources can significantly enhance your intraday trading success. A broker that provides you with in-depth market analysis, and stock recommendations, and comes with educational content can put you at a competitive advantage. Look for the following resources:
Market reports:
Daily, weekly, and monthly market reports, covering market trends, sector performance, and top stock picks.
Reports on technical analysis:
Reports on technical analysis, including chart patterns and price movements or technical indicators help a trader in making decisions.
Webinars and tutorials:
Educational webinars, video tutorials, and articles explaining various aspects of intraday trading—from build-up concepts to advanced strategies
Integrated trading tools and features
Also, make your intraday trading experience more enriching by employing advanced trading tools and features that provide additional insights and automation. Look out for some of these useful tools
Algorithmic trading:
Also known as algo trading, the feature supports mechanizing investors’ trading strategies through predefined rules and algorithms. This, more importantly, contributes to making very accurate, high-frequency trades.
Real-time alerts:
Real-time alerts serve to inform you about price changes, volume spikes, or the observance of technical price patterns, which can grant you a glimmer of hope to quickly respond to trading opportunities.
Order types:
It provides various orders, such as limit orders, market orders, stop orders, and bracket orders. This provides you with the independence to execute your trade just the way you want.
Customer support and service
In trading, you need all the reliable help you can provide. When your concern is anything that relates to your money, a fast intra-day trading world, and responsive and knowledgeable customer service from your broker will quickly solve problems you encounter and will allow you less downtime for trade. Check on the following counts on customer support:
Availability:
The support to the customer must be made available during market hours, but it is effective if it is around the clock.
Channels provided:
Brokers need to provide the customer with several support procedures and means of contact, including phone, email, live chat, and social media.
Conclusion
The right choice of the intraday trading account will, therefore, make a big difference in your success as a day trader. Therefore, you can be confident in your trading account, given the above-explained points: it has the floor of prices, low brokerage, and a good trader platform that includes a strong risk management tool and customer service. The best stock broker for intraday accounts will surely let you pass through the hurdles of intraday trading and earn a great opportunity for profit at the same time.
