What's the best broker to use for day trading and swing trading? I get this question all the time. Trust me, I know it could be overwhelming with all the choices out there for brokers, especially if you're just starting out your day trading journey, or you may be in the process of finding the right broker that's best suited for your personal trading strategies. As a trader who's been trading for over 8 years now, I've tried almost every broker under the sun, free and paid.
And today I have the perfect list for you. For those who are new to my channel, my name is Shea aka HumbleTrader. I share actionable trading strategies and videos for traders of all levels. Unfortunately though, I do not drive a Lamborghini, because I own something even more valuable, my family's Corolla.
My trading video lessons are free for you to watch on YouTube, but my bad jokes are not. So please make sure to smash the like button and now let's get started. So why is it so important that you're using the right broker platform for your trading style?
A metaphor I would use to describe the relationship between a trader and a broker is a captain and their ship. Just as a captain relies on a ship to navigate the seas, a trader relies on their broker to effectively navigate through all the volatilities in the stock market. So how exactly do you find your ship?
Today I'll be teaching you how to determine your own trading style and the right broker. And I'll be covering the best brokers for beginner traders with a small account, day traders and swing traders who are long biased, traders who are short biased, getting around the pdt rule and long-term investors and finally of course i'll be sharing with you my personal brokers and why i choose them okay so our first step is to get really clear on the kind of trader you are or you want to become not all the brokers are created equal and not all the brokers will be suited for your trading strategies i really wish someone had told me this before I got married to my ex-husband, my bag holder. And here are just some of the questions I would like you to ask yourself right now. Have you ever traded before?
How frequently do you place trades? Are you looking to get in and out of a stock more than once a day or 10 times a day? Or do you want to be holding on to a stock position for a few days, weeks, or even months? What is your account capital? And is it over $25,000?
And very importantly, are you located in the United States, Canada, or other international countries? And after answering these questions we just talked about, you'll most likely fall under one of the four types of traders here. A beginner day trader with a small account, a day trader, swing trader, or long-term investor.
So first up are the brokers for my day traders and swing traders of all levels and styles. Let's start with the traders who are completely new to trading. Best brokers for beginner traders. If you're a beginner trader, I recommend you choose a broker that offers simulated trading or paper trading.
When I first started trading, I lost all my money relatively quickly, and I basically just didn't bother with paper trading at all. I really don't wish that upon any of you to lose your hard-earned money. So if you're a beginner trader, I definitely recommend you to start with paper trading with my following recommendations. First one, TD Thinkorswim. Thinkorswim is a very user-friendly platform for beginners to get started, especially with charting, building watchlists, free pre-market scanners, and etc.
But I really don't recommend using them for live trading. For those using TD Ameritrade in the US, Europe, and sometimes even Asia, after you deposit $100, you can call them to turn on live market data, which is essential to start paper trading and to learn about the markets. Yes, you must get live market data. You don't want to be that new trader who trades with a 15-minute delay on the market and trying to buy the stock at $10 when it had already started selling off from $10 to $8 15 minutes ago.
Like I mentioned earlier, TD Thinkorswim is available in some countries outside of North America as well. Make sure to check on their website. Unfortunately for my Canadian traders, TD Thinkorswim is no longer an option in Canada.
But I will have other recommendations for you later on. The second recommendation for paper trading is Webull, which is a free commission broker platform. While I don't normally recommend $0 commission brokers for live trading, on paper trading and practicing about the market, and scanning for stocks or even swing trading, it's totally fine.
This is perfect for you if you're brand new, just getting warmed up with the market, with technical analysis, charting, and even scanning for stocks to trade. The user interface on Webull is very beginner friendly. I personally use their mobile app just like this one to track all the stocks I'm watching on the go and even doing some simple technical analysis as well.
They also offer free live market data and free pre-market scanning on their desktop platform so that's definitely a bonus. The desktop platform is available on both PC and Mac as well. Another good choice for paper trading is Interactive Brokers, available in both US, Canada, and pretty much all over the world. By the way, this was my personal trading broker for paper trading and live trading when I first started. Interactive Brokers and I, we go way, way back.
many years ago before Mike Bagholder even showed up. If you want to paper trade on interactive brokers, you do need to purchase the data subscriptions in order to trade on the platform. That includes things like equities and options quotes for NASDAQ, NYSE, exchanges, and level 2. The packages look like this and they'll add up to about $20 a month which is not bad at all.
So those are my recommendations for just paper trading. I still have accounts with all of those brokers even till this day. So once you become comfortable with paper trading and using the platforms, now you're ready to risk some real money with live trading. Now let's get into the brokers I have chosen for you for going long and short.
As day traders, we get in and out of a stock position more than once a day. Some traders even make more than 10, 50 round trips a day. So if you are day trading, you want to make sure you have a good platform for charting and doing various technical analysis and indicators.
But most importantly, you want to make sure you have a broker platform that will provide you really fast executions, whether you are going long or short. Let's start with the best trading brokers for going long on stocks. A quick recap, going long on a stock means you are buying and holding the stock.
with the expectation that it's going to increase in value in a short period of time if you're day trading. First, we have Interactive Brokers. When I first started learning to day trade, I personally started with only long strategies, and that's how I built up my small account from $2,000.
Like I mentioned earlier, Interactive Brokers was the first one I ever used for payment trading and then later on live trading. Over 8 years ago, I was using Interactive Brokers'very own platform, TWS, Trader Workstation. It was a good way to get started, getting familiarized with all the buttons, with all the orders, and practicing my own strategies.
However, once I leveled up and became profitable, I switched to using Interactive Brokers and Dash Trader Pro platform instead. This broker and platform combination would be the best choice for any trader who is long biased. Dash Trader Pro is extremely fast with their order entries, routing options, and of course, reading price action in level 2. So much better than TWS. Oh my god, TWS seems a little bit ancient. I would say that even now, 8 years later, the platform almost looks exactly the same.
But once again, Interactive Brokers is fine to get started. I'm just saying, if you eventually wanna level up, take more share sizes, and have faster executions, it's definitely worth investing into Dash Trader Pro. Okay, back to Interactive Brokers.
At the first glance, Interactive Brokers is definitely a lot cheaper than most other brokers out there. Basically, the cost for buying and selling US listed stocks. is $0.005 per share, with a minimum order of $1 per trade. So for the newer traders with a small account, this is very affordable, and their executions and fills are decent as well.
As for the ability to short, interactive brokers generally has good locate for large cap stocks, except for the small cap, low float runners. They do not offer the function of locating hard to borrow stocks. However, All of the short locates that you're using is free of extra charge, except for margin interest. So Interactive Brokers is great for those who are in US, Canada, and most international countries as well.
I personally use this broker for trading large cap stocks going long or short. They have plenty of easy to borrow stocks at no additional cost. They are also getting better at getting short borrows on the small cap penny stocks slowly.
Keep in mind, for some traders in Europe and Asia, opening accounts means they are cleared through Interactive Brokers US. In that case, you might still be subject to PDT rule, and we'll talk more about this later on. The second broker option for going long on stocks is Fidelity Active Trader Pro.
I have not personally used this broker myself, but I heard from many traders that I trade with every day that they have great executions. And also, Fidelity is supposedly also commission-free. And that's amazing.
That's a really good bonus. Another thing to note from other traders I've talked to is that Fidelity has really good customer service support lines. They pick up the phone with only a couple minutes of wait. And this broker has really good short availability for the mainstream large cap stocks, such as the Meta, Tesla, all the same stocks we mentioned earlier, at no additional cost. But the cons of using Fidelity Active Trader Pro?
Well, it's the platform. Kind of similar to Interactive Brokers once again. The reviews from the traders I talked to is that the platform is generally really outdated and it's kind of clunky. So keep that in mind. Fidelity is available outside of the United States as well.
So make sure to check out on their international websites. The third option I have for you is TradeStation. For all of you traders interested in trading automation and coding your own trading bot and making it rain Lamborghinis, you might be interested in TradeStation.
TradeStation is another direct routing broker that offers good executions for traders. Their short availability is on par with Fidelity and Interactive Brokers, where most general large cap stocks are available to short for free. But where TradeStation starts to stand out, is with their level 2 and execution platform.
Their platform has a really useful tool called the Matrix, which is a more advanced but easy to follow level 2. The Matrix offers lightning fast order entries on all kinds of orders, like bracket orders, sell and buy stop loss orders, and just easier to read for a lot of traders. As I mentioned earlier, TradeStation platform also allows you to build your own automated trading strategies as well. So if you ever build a bot that'll make it rain Lamborghinis, make sure to call me. However, their fees are on the higher side in comparison to all the other brokers we just talked about.
But the direct routing, executions, and fills makes it worth it. So those are my top three brokers for going long on stocks. I know we've gone through many brokers so far and there are so many more to come. But don't worry, I'll list out all the brokers and the discounts I have down below. Now let's move on to talk about the exciting topic of the best brokers for shorting stocks.
Here's a quick recap. Short-selling stocks means you are borrowing shares of a stock you don't own to sell to someone else first, with the intention of buying back those shares later at a lower price in order to make a profit. Short-selling stocks has become extremely popular during 2022. Of course, with all the stocks spiking and selling off in a bear market, it really doesn't take a genius to realize that short selling can be extremely profitable. There are two kinds of brokers I would recommend for short selling. But before we do so, if you are enjoying the video so far, please remember to like and subscribe if you haven't done so already.
Here are the two kinds of brokers I recommend for short selling. Brokers for shorting easy to borrow stocks, And those for shorting hard to borrow stocks. As you guys should already know, when you are short selling a stock, you need to borrow shares from a broker in order to sell to someone else. You are betting on the stock going lower in price and eventually you will buy it a lot cheaper, and profit from the difference. Easy to borrow stocks means the stocks in question are easy to find or easy to borrow from a broker.
These stocks would be like your Teslas, Apple, AMD, Nvidia, etc. Basically, almost all the large cap stocks are easy to borrow, and they are generally free to short. The best brokers for shorting easy to borrow stocks are, you may have heard from earlier in the video, Interactive Brokers, Fidelity Active Trader Pro, TradeStation, and even Webull. Yes, believe it or not, you can borrow easy to borrow stocks to short for free on Webull, which is a really good option for traders.
As for shorting the hard to borrow stocks, well, they are, as the name suggests, difficult to find. They are often the small cap low float runners that you see once a while, like HKD, a stock that went from single digit to thousands, and some crazy meme stocks like the GME, BBBY, and even AMC in 2021. These hard to borrow stocks would not be available at the brokers we just talked about. To find shares to short on these kinds of stocks, you'll need trading brokers that has their own in-house lending firm. specializing in providing traders hard to borrow stocks to short. And I have a few good options for you, whether you have a big account or a small account.
If you have bigger account capital, over $25,000, then you should look into CenterPoint Securities. CenterPoint has a really extensive list of hard to borrow stocks to reserve for shorting. But they also have more than just that. They offer amazing customer support service, direct access routing, extended hours trading, and connection with Dash Trader Pro.
Like I mentioned earlier, Dash Trader Pro is a platform that offers the best executions and fills, whether you are loaning or shorting stocks. Centerpoint Securities also has a promotion for new account opens, offering clients free access to Tradeidea Scanner, Dilution Tracker, and so much more. Their entire suite of tools are worth $3,500 available to traders for free. If you're interested, I have a referral link down below for you to get 50% off on short locates and commissions for 16 days.
This is a pretty sweet deal. I personally use Centerpoint for shorting as well. They're currently available for traders in the US and international clients with more than $30,000. And according to them, they'll be back in Canada this year.
So that would be great news for the Canadian traders. The second option I have for you is Cobra Trading. Cobra Trading is also a direct access broker that offers you the function of reserving hard to borrow stocks to short.
Cobra Trading is available in the US for clients with an account over $30,000 and international clients with accounts over $50,000. But sorry, at the moment they are not servicing Canadians. but I'll have other choices for you later on. Now, I'm sure many of you watching this don't have $25,000 to fund an account yet, or you simply are not ready to commit that much capital into trading, and that's totally fine.
Don't worry, I got you. You're going to like our next broker recommendation, just like how you like this video down below. Here is the best broker for shorting stocks with a small account. Okay, let's talk about the top choice for shorting if you have less than $25,000.
Or if you are in Canada, your best broker of choice to short hard to borrow stocks would be TradeZero. TradeZero has various branches, one in the United States serving Americans, one in Canada serving Canadians of course, and one in Bahamas serving international clients. So they are not an offshore broker like what many traders are suggesting. that are regulated and insured in the US and Canada.
TradeZero has some great functions for locating hard to borrow stocks to short just like Cobra Trading and Centerpoint. And you can open an account with them for I think $2500 minimum. However, their locate fees are a little bit higher than the other choices we talked about. And the platform, which is Zeropro, could be a little bit unpredictable sometimes. with the fills, executions, and especially during times of volatility.
Nonetheless, TradeZero is definitely a great option for short sellers who have a small account. It's the only short selling option available for Canadians as well. And for those in the United States, you'll be opening accounts with TradeZero America.
You'll still have the PDT rule restriction under $25,000. So keep that in mind. Now, speaking of the PDT rule, I know this is what a lot of traders are saying right now. Oh my gosh, Shay, I don't even have $25,000. I cannot day trade!
Don't worry, here are some creative ways to get around the PDT rule. A quick refresher, PDT rule stands for Pattern Day Trader Rule. Basically, it limits how many times you can trade if your account is under $25,000.
Under the PDT rule, the day trader can only place 3 day trades in a consecutive 5-day rolling period. Remember, the PDT rule only applies to traders using US-based brokers on margin accounts. This applies to almost all the brokers we just talked about. Interactive brokers, TradeZero America, TradeStation, Fidelity, etc.
Premium brokers like Centerpoint Securities or Cobra Trading, they don't even accept clients under PDT rule. So if you are in the US and you want to avoid the PDT rule restriction, you have these two options over here. First, you can open a cash account with any of the brokers we just mentioned earlier. Only margin accounts are subject to PDT rule. If you're using a cash account, you can take as many day trades as you want, but you'll have to wait for the cash to settle, and you cannot short sell stocks.
Now your second option will allow you to continue shorting stocks, and that is to have multiple margin accounts with various brokers. For example, if you have 3 margin accounts across 3 different brokers, you're gonna have a total of 9 day trades per week. Obviously, the PDT rule will only matter if you are day trading a lot. But if you are not a day trader, rather a swing trader, then you don't have to worry about any of this. Okay, so I know we just listed some superstar brokers for you to day trade with.
But who would I be if I didn't give you some honorable mentions as well? Now let's talk about a few more popular brokers that I know many traders are using. First one is TradingView.
Even though it's a platform, not a broker, TradingView has now become my favorite charting platform, surpassing Thinkorswim. I really like its versatility across all the platforms. It's available on your phones, PC, and MacBook. And since it's based on a browser on the web, it's available to anyone around the world. I love the interface on TradingView.
And if you've seen my previous videos before, then you've seen me demoing on TradingView so many times. TradingView has a free version for you to sign up to try it out. And if you want live market data, they cost about $15 per month. And once you're ready, you can connect your TradingView platform with all this list of brokers for live trading as well. Here's two more honorable mentions.
E-Trade, that's another one that a lot of traders are using, it's worth looking into if you're in the United States. And also Charles Schwab, StreetSmart's Edge, this is a good one for those who are trading options exclusively. So that's my whole list for day traders, swing traders, with a small account and big accounts going long or short.
If you want to take trading seriously as a business, after 6 months or a year, switching to a premium direct access broker is very much worth it. Remember, it takes money to make money in this business. The platform speed your broker has, execution fields, routing options, and the ability to short hard to borrow stocks, these are all worth the extra couple of dollars of commissions. And those are just the cost of doing business, they are generally tax write-offs as well.
If you think there are platforms or brokers I missed, please make sure to comment down below and let me know. I'll check them out. Best brokers for long-term investing. Now for my long-term investors, you're just looking to put your money into stocks and hold it for 5, 10, 20 years, basically till you're 60, just like my age. Basically, you don't need to care about PDT rule.
You don't need to care about fast executions. It just makes things a lot more simple. Almost all the brokers offer cash or registered accounts for investors in US or Canada.
And here are just some of the brokers I recommend for my long-term investors watching this. The first one is Blossom. Blossom is a social investing app just like this one which I'm personally using and invested into the app. You can now follow my entire stock market investing portfolio on Blossom, so check them out.
For my American investors, you have a lot of choices. And here are some of my recommendations. Interactive brokers, TD Ameritrade, Fidelity, and even Robinhood. As for my Canadian brokers watching this, the following brokers are good for investing in cash, TFSA, or RRSP.
Interactive brokers, Questrade, TD Waterhouse Direct Investing, or RBC Investing. Okay, so now the question we've all been waiting for. Out of this long and beautiful list of brokers, which ones do I personally use?
Well, I use many of them for many different reasons. And here's a quick list. For going long on stocks, I use Interactive Brokers. For going short, I use Centerpoint Securities, Cobra Trading, and TradeZero. For following stocks on my phone, I use Webull.
For investing long term, I use Blossom, Questrade, Interactive Brokers, and TD Direct Investing. After so many years of trading in the market, I learned that there's no perfect broker that's gonna have everything you need all in one. I listed at least a dozen pros and cons for each broker in the video.
Remember, choosing a broker is like dating. There's no one size fits all. You'll need to find the right broker suited for your needs and trading strategies.
Here are some pro tips I have for you when you're choosing a broker. Number one, don't follow the crowd. Be aware of the stage of trading that you're currently in. Don't choose a broker just because you see someone else using it. If you're long biased, then there's no need to open accounts at brokers specializing in short locates and vice versa.
And number two, understand your own trading style. Do your research and choose the right one just for you. There's definitely going to be a learning curve when you try out a new broker platform for the first time.
So be patient with yourself, give yourself time to familiarize with all the platform, all the buttons. And just like a wise millionaire once said, Lamborghinis are not built in one day. I'm sure somebody did say that.
I'll list out all the brokers I mentioned today as well as all the discounts I have available in the description below. If you watch this video so far and found it helpful, please remember to drop a like and subscribe. If you have any questions regarding brokers or platforms, please feel free to ask them in the comments below. forms, feel free to leave them down below.
I'll do my best to answer them. If you wanna learn more about my trading strategies, there's a playlist for you down below as well. Thank you guys so much for watching as always.
I'm the humble trader, and I'll see you guys next time.