What is a day trading platform?
A day trading platform is the technology used to facilitate the trade of financial instruments, enabling positions to be opened and closed within a single day. This trading style is not suitable for people seeking to trade or invest in the longer term.
When trading with us, a fee will be charged to your account for keeping your intraday trade open until the following day.
Note that there’s a difference between an online broker and a trading platform. An online broker provides the platform, while the platform facilitates the trading activity on the financial markets. An online broker like us enables you to open a brokerage account for trading or investing securities in the financial markets.
Our day trading platform will enable you to trade using a popular derivative product called contracts for difference or CFDs. Derivatives are leveraged products, meaning you’ll amplify your exposure on the markets.
CFD trading involves high risk. That’s because leverage can magnify both your profits and your losses as they’ll be based on the full exposure to the trade, not just the initial margin deposit required to open it. This means losses as well as profits could far outweigh your margin, so always ensure you’re trading within your means and take steps to manage your risk.
Alternatively, you could open an intraday position without leverage by dealing shares. But this will offer you decreased assets and market exposure, plus you’d need some assurance that there’d be sufficient market movement in the day.
How to find the best day trading platform
To find the best day trading platform, there are several things to take into consideration. These include your experience as a trader, trading goals, the types of assets you’d like to trade, costs and charges involved and the type of support you’ll be offered.
1. Consider your experience and trading goals
Taking your experience and trading goals into consideration when venturing into day trading will enable you to have clear goals in mind. This will ensure you put in the time to practise and fine-tune your trading style and strategy before you open your first position.
You can use fundamental analysis as part of your trading style or plan to predict market price movements and use technical indicators for your strategy. Your strategy is determined by your preference and your level of risk you’re willing to be exposed to when trading the markets.
If you’re a beginner, you’ll need to choose the trading strategy that suits your preferences. For example, if you choose to use scalping as your day trading strategy, you could make lots of small trades of the asset you’re trading with the aim of potentially profiting from the little price changes.
Once you’ve chosen your scalping strategy, ensure that you diligently stick to it as one impromptu move may lead to trade that results in a huge loss. Your aim might be to make a series of small wins from your trade and benefit from them instead on a few large ones.
You can learn more about trading strategies by visiting out Analyse and Learn section on the website or IG Academy. You can also try out these trading strategies by opening a demo account with us and practice with $10,000 in virtual funds in a risk-free real-world environment. Once you have gained your confidence as a trader, you can open a live account with us.
2. Learn key day trading concepts
There are some essential day trading concepts you’ll need to educate yourself on when it comes to the financial markets:
- Volatility – intraday trading will require that you have the ability to identify if the market price has sufficient movement to present profit-making opportunities. This is known as ‘volatility’, which measures how much an asset’s price moves over a period of time
- Liquidity – this describes how easy it would be to open or close a position in the markets without the asset’s price being affected. A rising demand for an asset increases its liquidity, meaning you can take or close positions at the price you want. With us, you’ll get deep internal liquidity, giving you access to several buyers and sellers, which will assist with the quick execution on your trade
- Volume – this provides details on the number of times an asset has been traded over a certain timeframe and is a key indicator of the market’s liquidity. You can trade volumes as a strategy to identify entry and exit points in the markets. For instance, a rise in volume when there’s a sharp movement in the market is indicative of the market maintaining that direction in the future
3. Find out about day trading products and assets
CFDs are leveraged products that will increase your market exposure at a fraction of the full value of your trade. But while they’ll magnify your profits when the markets move in your favour, they’ll amplify your losses if they move against you.
Carefully manage your risk and only trade using an amount you’re comfortable losing. There are over 17,000 markets you can trade with us.
