A day trader is someone who buys and sells a position on the same day, according to Start Day Trading. Day traders make money off of small fluctuations in the market, rather than through long-term growth or dividends. Day trading accounts differ from traditional investment accounts. Day trading brokerages offer features that specifically cater to the needs of day trading investors. It is not difficult to open a day trading account.
Decide what features you will need to be able to successfully day trade stocks. Different day trading brokerages will allow you to invest in different markets, will charge different fees and commission rates, and will have different types of market data readily available. Make sure any brokerage you consider has all of the features you are interested in.
Read reviews of different day trading brokerages. You will want to open a day trading account at a brokerage that is reputable and well reviewed. Even if a brokerage has all of the features you are looking for, you will want to make sure that it offers high-quality customer service and reliability.
Determine what account features you will need. The brokerage you select will likely have many different types and levels of accounts available. Make sure the account type you select will provide everything you need, but don't pay extra for features you won't use.
Fill out the account application at your chosen broker. Some brokerages allow you to apply completely online, while others will require you to send a signed copy of the application to the broker before your account will be opened. Depending on your situation, you may be able to start trading on a line of credit. If not, you will have to wait for funds to be transferred from your bank account.
Pay special attention to fees and commissions if you are going to be trading often. If these are too high, they can eat away at any profit you might make.
Never day trade with money you will need. The stock market can be volatile and there is always a risk of losing money you have invested. Most day traders will need $25,000 of equity in their account.
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