Day Trading Brokers and Platforms in Germany 2018

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Day trading is speculation in securitiesspecifically buying and selling financial instruments within the same trading day. Strictly, day trading is trading only within a day, such that all positions are closed before the day trade platform brokers closes for the trading day.

Many traders may not be so strict or may have day trading as one component of an overall strategy. Traders who participate in day trading are called day traders. Traders who trade in this capacity with the day trade platform brokers of profit are therefore speculators. The methods of quick trading contrast with the long-term trades underlying buy and hold and value investing strategies. Some of the more commonly day-traded financial instruments are stocksoptionscurrencies day trade platform brokers, and a host of futures contracts such as equity index futures, interest day trade platform brokers futures, currency futures and commodity futures.

Day trading was once an activity that was exclusive to financial firms and professional speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management.

However, with the advent of electronic trading and margin tradingday trading is available to private individuals. Some day traders use an intra-day technique known as scalping that usually has the trader holding a position for a few minutes or even seconds.

Most day traders exit positions before the market closes to avoid unmanageable risks—negative price gaps between one day's close and the next day's price at the open. Another reason is to maximize day trading buying power. Day traders sometimes borrow money to trade. This is called margin trading. Since margin interests are typically only charged on overnight balances, the trader may pay no fees for the margin benefit, though still running the risk of a margin call.

The margin interest rate is usually based on the broker's call. Because of the nature of financial leverage and the rapid returns that are possible, day trading results can range from extremely profitable to extremely unprofitable, and high-risk profile traders can day trade platform brokers either huge percentage returns or huge percentage losses. Because of the high profits and losses that day trading makes possible, these traders are sometimes portrayed as " bandits " or " day trade platform brokers " by other investors.

The common use of buying on margin using borrowed funds amplifies gains and losses, day trade platform brokers that substantial losses or gains can occur in a very short period of time.

In addition, brokers usually allow bigger margins for day traders. Because of the high risk of margin use, and of other day trading practices, a day trader will often have to exit a losing position very quickly, in order to prevent a greater, unacceptable loss, or even a disastrous loss, much larger than his or her original day trade platform brokers, or even larger than his or her total assets.

Originally, the most important U. A trader would contact a stockbroker, day trade platform brokers would relay the order to a specialist on the floor of the NYSE. These specialists would each make markets in only a handful of stocks. The specialist would match the purchaser with another broker's seller; write up physical tickets that, once processed, would effectively transfer the stock; and relay the information back to both brokers.

One of the first steps to make day trading of shares potentially profitable was the change in the commission scheme. Inthe United States Securities and Exchange Commission SEC made fixed commission rates illegal, giving rise to discount brokers offering much reduced commission rates. Financial settlement periods used to be much longer: Before the early s at the London Stock Exchangefor example, stock could be paid for up to 10 working days after it was bought, allowing traders to buy or sell shares at the beginning of a settlement period only to sell or buy them before the end day trade platform brokers the period hoping day trade platform brokers a rise in price.

This activity was identical to modern day trading, but for the longer duration of the settlement period. But today, to reduce market risk, the settlement period is typically two working days. Reducing the settlement period reduces the likelihood of defaultbut was impossible before day trade platform brokers advent of electronic ownership transfer.

The systems by which stocks are traded have also evolved, the second half of the twentieth century having seen the advent of electronic communication networks ECNs.

These are essentially day trade platform brokers proprietary computer networks on which brokers could list a certain amount of securities to sell at a certain price the asking price or "ask" or offer to buy a certain amount of securities at a certain price the "bid".

The first of these was Instinet or "inet"which was founded in as a way for major institutions to bypass the increasingly day trade platform brokers and expensive NYSE, also allowing them to trade during hours when the exchanges were closed.

Early ECNs such as Instinet were very unfriendly to small investors, because they tended to give large institutions better prices than were available to the public.

This resulted in a fragmented and sometimes illiquid market. The next important step in facilitating day trading was the founding in of NASDAQ —a virtual stock exchange on which orders were transmitted electronically. Moving from paper share certificates and written share registers to "dematerialized" shares, computerized trading and registration required not only extensive changes to legislation but also the development of the necessary technology: These developments heralded the appearance of " market makers ": A market maker has an inventory of stocks to buy and sell, and day trade platform brokers offers to buy and sell the same stock.

Obviously, it will offer to sell stock at a higher price than the price at which it offers to buy. This difference is known as the "spread". The market maker is indifferent as to whether the stock goes up day trade platform brokers down, it simply tries to constantly buy for less than it sells. A persistent trend in one direction will result in a loss for the market maker, but the strategy is overall positive otherwise they would exit the business. Today there are about firms who participate as market makers on ECNs, each generally making a market in four to forty different stocks.

Another reform made was the " Small Order Execution System ", or "SOES", which required market makers to buy or sell, immediately, small orders up to shares day trade platform brokers the market maker's listed bid or ask.

In the late s, day trade platform brokers ECNs began to offer their services to small investors. New brokerage firms which specialized in serving online traders who wanted to trade on the ECNs emerged. Archipelago eventually became a stock exchange and in was purchased by the NYSE. Moreover, the trader was able in to buy the stock almost instantly and got it at a cheaper price.

ECNs are in constant flux. New day trade platform brokers are formed, while existing ones are bought or merged. As of the end ofthe most important ECNs to the individual trader were:.

This day trade platform brokers of factors has made day trading in stocks and stock derivatives such as ETFs possible. The low commission rates allow an individual or small firm to make a large number of trades during a single day. The liquidity and small spreads provided by ECNs allow an individual to make near-instantaneous trades and to get favorable pricing.

The ability for individuals to day trade coincided with the extreme bull market in technological issues from to earlyknown as day trade platform brokers Dot-com bubble. In March, day trade platform brokers, this bubble burst, and a large number of less-experienced day traders began to lose money as fast, or faster, than they had made during the buying frenzy. The NASDAQ crashed from back to ; many of the less-experienced traders went broke, although obviously it was possible to have made a fortune during that time by shorting or playing on volatility.

In parallel to stock trading, starting at the end of the s, a number of new Market Maker firms provided foreign exchange and derivative day trading through new electronic trading platforms. These allowed day traders to have instant access to decentralised markets such as forex and global markets through derivatives such as contracts for difference.

Most of these firms were based in the UK and later in less restrictive jurisdictions, this was in part due to the regulations in the US prohibiting this type of over-the-counter trading. These firms typically provide trading on margin allowing day traders to take large position with relatively small capital, but with the associated increase in risk. Retail forex trading became a popular way to day trade due to its liquidity and the hour nature of the market.

The following are several basic strategies by which day traders attempt to make profits. Besides these, some day traders also use contrarian reverse strategies more commonly seen in algorithmic trading to trade specifically against irrational behavior from day traders using these approaches.

It is important for a trader to remain flexible day trade platform brokers adjust their techniques to day trade platform brokers changing market conditions. Some of these approaches require shorting stocks instead of buying them: There are several technical problems with short sales—the broker may not have shares to lend in a specific issue, the broker can call for the return of its shares at any time, and some restrictions are imposed in Day trade platform brokers by the U.

Securities and Exchange Commission on short-selling see uptick rule for details. Some of these restrictions in particular the uptick rule don't apply to trades of stocks that are actually day trade platform brokers of an exchange-traded fund ETF.

Trend followinga strategy used in all trading time-frames, assumes that day trade platform brokers instruments which have been rising steadily will continue to rise, and vice versa with falling. The trend follower buys an instrument which has been rising, or short sells a falling one, in the expectation that the trend will continue. Contrarian investing is a market timing strategy used in all trading time-frames. It assumes that financial instruments which have been rising steadily will reverse and start to fall, and vice versa.

The contrarian trader buys an instrument which has been falling, or short-sells a rising one, in the expectation that the trend will change. Range trading, or range-bound trading, is a trading style in which stocks are watched that have either been rising off a support price or falling off a resistance price.

That is, every time the stock hits a high, it falls back to the low, and vice versa. Such a stock is said to be "trading in a range", which is the opposite of trending. A related approach to range trading is looking for moves outside of an established range, called a breakout price moves up or a breakdown price moves downand assume that once the range has been broken prices will continue in that direction for some time.

Scalping was originally referred to as spread trading. Scalping is a trading style where small price gaps created by the bid-ask spread are exploited by the speculator. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds.

Scalping highly liquid instruments for off-the-floor day traders involves taking quick profits while minimizing risk loss exposure. The basic idea of scalping is to exploit the inefficiency of the market when volatility increases and the trading range expands. When stock values suddenly rise, they short sell securities that seem overvalued. Rebate trading is an equity day trade platform brokers style that uses ECN rebates as a primary source day trade platform brokers profit and revenue.

Most ECNs charge commissions to customers who want to have their orders filled immediately at the best prices available, but the ECNs pay commissions to buyers or sellers who "add liquidity" by placing day trade platform brokers orders that create "market-making" in a security.

Rebate traders seek to make money from these rebates and will usually maximize their returns by trading low priced, high volume stocks. This enables them to trade more shares and contribute more liquidity with a set amount of capital, while limiting the risk that they will not day trade platform brokers able to exit a position in the stock.

The basic strategy of news playing is to buy a stock which has just announced good news, or short sell on bad news. Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits or losses. Determining whether news is "good" or "bad" must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself. This is because rumors or estimates of the event like those day trade platform brokers by market and industry analysts will already have been circulated before the official release, causing prices to move in anticipation.

The price movement caused by the official news will therefore be determined by how good the news is relative to the market's expectations, not how good it is in absolute terms.

Keeping things simple can also be an effective methodology when it comes to trading. These traders rely on a combination of price movement, chart patterns, volume, and other raw market data to gauge whether or not they should take a trade.

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Positions are all closed by the end of the trading day. Now that we know what day trading is, who or what are the day traders? The rise of electronic trading and margin trading software has become available to individuals from around the world. So, if this trading method is available for everyone, how does a beginner get involved, and are binaries a good starting point? Commodities such as gold, oil or things like grain prices can also be traded. Cryptocurrencies like Bitcoin and ethereum are a huge market for day traders at present too.

Futures require more and stocks require the most money to be invested in for day trading. Binary options offer low cost entry for anyone wishing to day trade. Their drawback however, is a lack of leverage. Whether this is a big factor or not will depend on the trader — leverage increase market exposure, so the fixed price element can actually help is terms of managing risk — but also limits potential profits. Once you know your asset, as an individual day trader, you need the proper equipment and software to commence day trading.

In addition, day traders require a fast internet connection. You want to be sure your tables and charts are updating as quickly as possible. Along with all this, you need a trading platform and a broker to commence trading. As a trader starting out, you will want something easy to use and not too complicated. We recommend traders try out the demo accounts associated with most day trading platforms to get a feel of which software platform performs best.

As for brokers to go with, make sure they are reputable and regulated, along with low fees, tight spreads and maybe even bonuses. Learning via virtual accounts is superior to books or courses. Hands on experience introduces trading psychology though this is increased hugely with a real money account. Another important aspect to consider before you actually start trading is the time of day and how many hours a day you will be trading.

The best trading hours are usually around the market opening and closing times. Forex in particular presents interesting opportunities in terms of trading hours. Currencies are traded around the clock with no central market.

This means multiple volume peaks and troughs as new regions wake up or shut down. These time zones cycles apply equally to cryptocurrencies. Day trading on Bitcoin or Bitcoin cash will continue around the globe.

Cryptocurrency has added a whole new dimension for day traders. Risk for this type of trading needs to be managed in two ways, trade risk and daily risk.

Trade risk is how much you are willing to lose on each trade. The fixed risk of binary options can help is managing risk as the amount put at risk is known at the outset.

A trader will manage this by choosing an entry point and setting a stop loss. The stop loss will remove you from the trade if you reach a certain level of loss for that trade. Daily risk is like trade risk in the simple fact that they both limit the total loss amount; only daily risk limits the total losses for a single day.

In doing this, bad days are restrained from being too bad and can be recovered by a typical winning day. There is no clear tax applicable for day trading. Different regions view taxes differently — and binary options are different again. Tax also depends on whether you view your day trading as a career or a hobby.

For this reason, it is important to seek local advice. All you need is one strategy to focus on, and implement it over and over again. Try out a strategy on a demo account first to see how it pans out.

This strategy relies on market volatility. It can be used alongside other technical indicators and tools that you find on our trading platform as it relies on spotting trends. It involves buying these and conversely selling the worse performing assets. Being well informed and knowledgeable of current market moving news is instrumental to the success of this strategy.

There are many aspects involved with this strategy, and before implementing it in to your routine, learn all about it to become fully aware of its intricacies.

Even practice on a demo account first to acquaint yourself without risking your capital. Binary options however, suit intraday trades just as well, if not better. Here is a breakdown of how binaries differ from more traditional trading tools:.

So, there you have it, all you really need in day trading is consistency with trading hours and times, a set risk level that you unswervingly follow, and a strategy that works most of the time. Binary options can certainly be used within that framework.

However, nowadays just about anyone can become a day trader.