| Updated: July 2, 2024With various traders joining the Forex market, there are numerous trading systems one can implement while trading currency pairs. One extremely popular strategy is day trading, which means that traders open and close positions within the same day. While some traders wish to hold positions open for a few days, those who classify as day traders prefer to close all of their positions whenever the Forex market closes for the day.
While you can practice day trading on any reputable Forex broker’s platform, you should carefully pick the entity to trade with. Below, our team of experts has selected 10 top-class Forex brokers that offer some of the best trading conditions for day traders.
IC Markets70.64% of retail investor accounts lose money
Fusion Markets74-89% of retail CFD accounts lose money
FP Markets73.85% of retail investor accounts lose money
Pepperstone75.5% of retail investor accounts lose money
eToro51% of retail investor accounts lose money
Admirals73% of retail investor accounts lose money
XTB80% of retail investor accounts lose money
Interactive Brokers
Tickmill70% of retail investor accounts lose money
Charles SchwabTop 10 Forex Brokers for Day Trading
At Fusion Markets, traders are given the chance to trade over 90 currency pairs and numerous other assets. Known to be one of the leading CFD and Forex retail brokers online, Fusion Markets strives to offer competitive prices and fair trading conditions, making it a great destination for day traders. Fast executions with an average speed of 37 ms are perfect for intraday traders executing numerous short-term orders, striving to profit from small price changes. Classic account holders will enjoy zero commission charged per trade, while Zero Account traders will pay a small round trip commission of $4.50 but will enjoy extremely low spreads that may start from 0.0 pips.
Gleneagle Asset Management Limited (ABN 29 103 162 278) trading as Fusion Markets, is the issuer of the Fusion Markets Products described in this communication. Trading in Fusion Markets Products involves the potential for profit as well as the risk of loss which may vastly exceed the amount of your initial deposit and is not suitable for all investors. You should read all of these Financial Product Service Terms, the Product Disclosure Statement (PDS) and the Financial Services Guide (available on our website) carefully, consider your own financial situation, needs and objectives for investing in these Fusion Markets Products and obtain independent financial advice.Being a retail broker with extensive experience, Interactive Brokers strives to offer the best trading conditions to its members. Often recognized for being one of the top platforms for day trading, Interactive Brokers offers a set of advantages to those who qualify as active day traders. Spreads are competitively low, starting from 0.1 pips on major currency pairs, while commission rates can vary between $1 and $2, depending on the trader’s tier. While day traders can still enjoy a wide range of perks as retail members of Interactive Brokers, those who qualify for a Pro account will also gain access to the broker’s IB SmartRouting, which enables best execution by scanning various exchanges for the best currency prices.
Investing in financial products involves taking risk. Your investments may increase or decrease in value, and losses may exceed the value of your original investment.- 3. eToro
With eToro being one of the most reputable retail brokers online, it comes as no surprise that it is also the top pick for many day traders. With fast executions, competitive prices, and an innovative proprietary platform, eToro grants access to a wide range of markets, offering Forex traders more than 40 currency pairs to trade. Decent spreads and no commission charged on trades make eToro a rather good option for your day trading endeavors. With a range of tools incorporated into eToro’s trading platform, intraday traders can easily develop a strategy and stick to their preferred day trading systems.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. - 4. Pepperstone
Forex traders have the opportunity to trade over 90 major, minor, and exotic currency pairs if they join Pepperstone – one of the leading brokers offering Forex and CFD trading. The brand caters to the preferences of various traders and it is a great option for day trading, with tight spreads, low commissions, and extremely fast executions with an average speed of 30ms. Pepperstone also offers a special Active Trader program with a wide range of benefits that can make any day trader’s experience more rewarding. Forex traders who apply for the Active Trader are eligible to receive rebates on their trades, with higher volumes ensuring bigger rebates.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 5. XTB
XTB is a retail Forex and CFD broker, offering a fair, safe, and competitive trading environment to various investors. With over 50 currency pairs, the Forex market coverage by XTB allows smooth day trading of major, minor, and some exotic pairs. Those who opt for a CFD trading account will enjoy a budget-friendly trading experience, with spreads on major currency pairs starting at 0.9 pips and zero commission charged per trade. Non-EU and non-UK members of XTB will be eligible for monthly cashback, which is unlocked when traders execute multiple orders within a given period of time.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 6. Admirals
Another retail broker that is suitable for your day trading endeavors is Admirals, formerly known as Admiral Markets. The brokerage offers more than 8,000 tradable instruments, with CFDs on Forex allowing traders to buy and sell 80 popular currency pairs. With exceptionally fast execution speed, access to popular trading platforms, and competitive prices, Admirals is a great brokerage option for intraday trades. Not only can traders apply various day trading strategies but they will also have access to Admirals educational section that offers detailed information on day trading and strategies one can implement during their Forex trading sessions.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 7. IC Markets
At IC Markets, traders are able to explore numerous markets and trade more than 250+ CFD instruments, including more than 60 currency pairs. With several of the most popular trading platforms available to traders and several account options, day traders can fully optimize their experience at IC Markets and implement various strategies for a successful Forex experience. IC Markets boast an average order execution speed of 35ms, allowing exceptionally smooth trading for intraday traders.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 8. Tickmill
If you would like to enjoy the best trading conditions while placing your intraday trades, we recommend joining Tickmill. This is a reputable Forex and CFD broker that offers its customers a wide selection of tradable instruments, including more than 60 currency pairs. If you prefer engaging in day trading, placing multiple orders within a day is extremely easy and budget-friendly as Tickmill offers competitively low spreads and zero commissions applied to Classic Account holders. Traders will have access to some of the most popular trading platforms, with a range of tools allowing day traders to make use of charts, analysis, and other technical features suitable for day trading.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with Tickmill Europe Ltd. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 9. FP Markets
You can always elevate your trading experience if you are a member of FP Markets – a reputable retail broker offering some of the best trading conditions online. Among the various markets covered by the brokerage, there are CFDs on more than 70 currency pairs that can be traded on the popular platform MT4. Placing your multiple Forex orders throughout the day is extremely easy, with various tools allowing you to spot trends and determine entering and exiting points. As for the price of trading with FP Markets, you will be able to choose from a few account types that strive to offer some of the most competitive prices on Forex pairs.
10 per quarter for non-AU traders; 20 per quarter and notional volume of AU$1,000,000 per 4 quarters in the last 1 year 73.85% of retail CFD accounts lose money - 10. Charles Schwab
Charles Schwab has a reputation for being a reputable brokerage, offering a set of financial services to its customers, with Forex trading also being available to those who open an account with this entity. Traders who might engage in day trading in the hopes of stacking up multiple smaller gains in a single day will have access to charts, market analysis, and other tools helping them practice day trading. It should be noted that Charles Schwab has adopted a system qualifying its customers as Pattern Day Traders. Once you are labeled as a Pattern Day Trader, you should make sure that your balance does not decline below $25,000 at any time.
Comprehensive Comparison of the Top 10 Forex Brokers for Day Trading
| Forex Broker | Account Minimum | Regulators | Platforms | Order Execution | Number of FX pairs | Commission | Min Spread | Avg Execution Speed | Inactivity Fee | Trust Pilot Rating |
|---|---|---|---|---|---|---|---|---|---|---|
| 1. IC Markets | $200 | FSA (Seychelles), CySEC, ASIC | MetaTrader4, MetaTrader5, cTrader, ZuluTrade | ECN/STP | 61 | $0 Standard MT; $6 round turn on Raw cTrader; $7 round turn on Raw MT | 0.8 pips Standard, 0.0 pips Raw Accounts | 35ms | No | 4.8 ⭐ |
| 2. Fusion Markets | $0 | ASIC, FSA (Seychelles), VFSC (Vanuatu) | MetaTrader4, MetaTrader5, cTrader, DupliTrade, Fusion+ Copy Trade | NDD | Over 200 | $0 Classic Account, $4.50 round turn on Zero Account | 0.9 pips Classic; 0.0 pips Zero | 37ms | No | 4.8 ⭐ |
| 3. FP Markets | $50 (AU$100) | ASIC, CySEC, FSA (Seychelles), FSCA | MetaTrader4, MetaTrader5, WebTrader, IRESS | NDD, ECN | 70+ | $0 Standard Account; $6 round turn on Pro Account | 1.0 pips Standard; 0.0 pips Raw | 40 ms | No | 4.8 ⭐ |
| 4. Pepperstone | $0 | UK FCA (No.684312), CySEC (No. 388/20), ASIC (No. 414530), BaFin (No.151148), DFSA, CMA | TradingView, MT5, MT4, cTrader | STP, ECN/STP | 100 | $0 (Standard Account), $7 round-turn (Razor Account) | From 0.0 pips (Razor Accounts), 1 pip (Standard Accounts) | 30 ms | No | 4.5 ⭐ |
| 5. eToro | $1 - $50 (varies in different jurisdictions) | FCA, CySEC, ASIC, MFSA, ADGM, FSA, FINRA/FinCEN | eToro Investing, eToro App, TradingView, eToro CopyTrader | Market Maker | 55 | $0 | 1 pip | < 1000 ms | After 1 year of inactivity - $10 | 4.2 ⭐ |
| 6. Admirals | $100 | CySEC (No. 201/13), ASIC (No. 410681), FCA (No. 595450), JSC (No. 57026), FSCA (No. FSP51311) | MT4, MT5, WebTrader, MT Supreme Edition, StereoTrader | STP, ECN/STP | 82 | $3 per lot | From 0.0 pips (Invest and Zero Accounts), 0.5 pips (Trade Accounts) | 150ms | $10 per month after 2 years of inactivity | 4.1 ⭐ |
| 7. XTB | $0 | FCA (License No. FRN 522157), CySEC (License No.169/12), FSC (FSC License No.: 000302/438), IFSC (License No.: 000302/46.), KNF (N/A), CNMV (N/A), BaFin (N/A), FSCA (N/A), FSA (N/A) | xStation 5, xStation Mobile | DD | 50+ | $0 | From 0.1 pips (Pro Account), 0.5 pips (Standard Account) | < 440 ms | $/€10 after 12 months | 3.7 ⭐ |
| 8. Interactive Brokers | $0 | CFTC, CIRO, FCA, CBI, Central Bank of Hungary, ASIC, SFC (Hong Kong), SEBI, JSDA, MAS | IBKR Desktop, IBKR Trader Workstation, IBKR Mobile, IBKR GlobalTrader | ECN/STP | 100+ | From 0.08 to 0.20 bps x trade size | From 0.1 pip | 0.9 seconds | No | 3.5 ⭐ |
| 9. Tickmill | $100 | CySEC (No. 278/15), FCA (733772), CONSOB (No.4310), BaFin (No.146511), ACPR (No.75473), CNVM (No.4082), FSA Seychelles (SD 008), FSCA (FSP 49464) | MT4, MT5, WebTrader, ZuluTrade | Market Maker, STP, ECN/STP | 62 | $0 on Classic Account; $3 per side on Raw Account | From 0.0 pips (Raw Account), 1.6 pips (Classic Account) | 0.20 seconds | No (archives dormant accounts after 60 days) | 3.4 ⭐ |
| 10. Charles Schwab | $0 | SEC and CFTC, FCA, MAS, CIRO, SFC | Ameritrade, Thinkorswim | STP | 70+ | $0 base commission | Not specified | Varies | None | 1.6 ⭐ |
What is Day Trading in Forex?
Day trading in the Forex market is defined as buying and selling currencies within the same day, closing all positions at the end of the trading day. The reason why traders refrain from keeping their positions open overnight is to avoid steep fluctuations in price due to sentiment changes or news that may occur while the market is closed.
The way day traders strive to gain profits is by buying and selling numerous currency pairs in a single day, often making trades multiple times a day. Any potential profits from day trading result from small market movements while the Forex market is open.
Day trading, also called intraday trading, is definitely not a system suitable for every type of Forex investor. To be able to make profits from small price movements, you should keep a close eye on the market at any time. This takes a lot of time and dedication to detailed research on various markets. Day traders need to be able to react instantly to any sharp price fluctuations and place numerous large trades in order to enjoy a rather small profit every time. Most investment strategies suggest traders keep positions open over time, making a profit from bigger price fluctuations over a longer period of time. However, day traders have adopted quite the opposite strategies, relying on smaller in value but bigger in number profitable outcomes.
Key Requirements for Successful Day Trading
Before you engage in intraday trading, there are several terms to get accustomed with. Understanding day trading’s specific features will help you get better at this specific Forex trading style, allowing you to make correct decisions when it comes to opening and closing orders multiple times a day.
There are a few factors that are very determining for the Forex market, especially when it comes to intraday trading. There are three key elements that may have a direct effect on the intraday Forex market.
Liquidity – simply put, liquidity expresses how quickly one can open and close positions on the Forex market. Day traders tend to seek high liquidity as their typical trading behavior involves executing numerous trades in a single day.
Volatility – this is another key factor for day traders, expressing how quickly the price of an asset changes throughout the day. If the market is determined to be highly volatile, this can present plenty of opportunities for short-term profits from day trading.
Trading Volume – in the Forex market, the trading volume expresses how many times a currency pair has been bought or sold within a certain period. Whenever the trading volume is high, that indicates an increased interest in the currency pair, which may be identified as a signal for entering or exiting position points.
Before you get into day trading, we suggest you get familiar with a few qualities that every successful intraday trader possesses. Discipline is essential for day trading as one should be fully focused on the market, making sure they are fully aware of any sentiment change or news that may bring sharp price movements in currency pairs. Needless to say, traders who lack the time and discipline are rarely successful in day trading as they often miss important price movements that can potentially bring them profits.
Rationality is also important for boosting your chances for successful Forex day trading. As traders monitor the constant price changes throughout the day, they should be careful about making decisions based on emotions. Instead, they are required to correctly assess risk levels and potential returns, indicating whether an opening or closing position is the optimal decision.
Strategy is also a key element in intraday trading as it allows traders to set specific conditions for opening an order. Having a predefined strategy allows day traders to scan the market and spot any opportunities for buying or selling a currency pair. It may take some time to develop a winning strategy for your day trading but we are here to suggest a few tried-and-tested strategies that may help you elevate your Forex trading experience.
Popular Day Trading Strategies for Forex Traders
While you are free to create your own trading pattern to follow whenever you engage in intraday trading, we would like to cover a few day trading strategies that are quite popular with a large portion of Forex intraday traders. You can always try different systems using a demo account and implement the strategy that proves to be most successful in your live day trading sessions.
Trading the Trend
While following the trend is not a strategy specifically used only by day traders, it is a commonly used system by those seeking to close their positions before the market closes. Trend traders make sure to carefully investigate price movements in the Forex market and buy or sell a currency pair depending on whether there is a downward or upward trend.
Increasing prices would indicate consecutively higher highs, which would prompt traders to take a long position and buy the respective currency pair. On the contrary, a downward trend will signal lower lows, meaning day traders would take a short position and sell the currency pair. While many traders would choose to keep a position open overnight when the trend is suggesting going for a long position, those who stick to the intraday strategy would close the position at the end of the trading day.
Swing Trading
Another popular day trading strategy is swing trading, which focuses on amassing profits from short-term price fluctuations, assuming that the currency pair’s price will not keep the same direction for a longer period. The gist of swing trading is profiting from the frequent ups and downs in the price of a currency pair. Compared to the aforementioned trend trading, swing trading implies a different approach, relying on smaller, more frequent price movements instead of taking a short or long position based on long-term trends.
Scalping
If you engage in intraday trading, chances are, you have heard of scalping. This is a rather popular trading strategy among Forex investors who engage in day trading. Scalping is similar to swing trading as it focuses on smaller price changes, striving to achieve smaller and faster profits by quickly reselling the assets once the price changes again. The key element for scalping is having a strict strategy for exiting positions, allowing day traders to accumulate multiple small profits that would form a bigger day trading gain.
Mean Reversion
Day traders resort to various charts to develop their strategies that will help them spot the right entry and exit positions. Historical data is often used to show traders how an asset’s price has moved in the past, indicating the possibility of a drastic change in the current price, which may indicate a signal for buying or selling a currency pair. Mean reversion focuses exactly on the possibility of a significant decline or increase from a currency pair’s historic average (mean). When the price is below the mean, day traders tend to buy the currency pair, while an average drastically above the mean signals a suitable point for selling.
Money Flows
Money flows is a popular technical indicator used by day traders to detect any futures price movements based on the supply and demand of a currency. Instead of focusing solely on price movements, the money flows indicator also takes into consideration volume, comparing the trades executed the previous day to the trades of the current day. If there was a positive flow of trades over 80%, this indicates that the currency pair was overbought, signaling a short sell position. Meanwhile, a reading of 20 or lower means the currency has been oversold, indicating a buy position.
Tips for Successful Day Trading
If you are determined that day trading is a suitable trading style for your Forex endeavors, we can recommend a few steps that would help you make your day trading more successful. Before you start trading currency pairs, we suggest choosing the way you will trade this type of asset. CFD Forex trading is quite popular as traders do not own the underlying asset they trade, but rather speculate on its price movements, allowing much faster trade executions.
Prior to engaging in day trading, make sure you have selected a strategy to follow for determining the entering and exiting points during your day trading sessions. You should also decide on the type of indicators you will rely on to spot trends that indicate suitable points for buying or selling currency pairs.
Fundamental analytical tools include financial news, macroeconomic data, and company reports that may help you determine whether you should take a short or long position. Meanwhile, you can also choose to resort to technical analysis, which typically involves historical data about the currency pair’s price, chart patterns, and other technical indicators of sell and buy positions.
We also recommend day traders to master the ability to properly assess the risk level. With day trading, the shorter the period of opening and closing orders is, the higher the risk of losing huge amounts of money. Brokers tend to offer a variety of tools that help you minimize any potential losses. We suggest intraday traders to set clear indicators for their exiting positions and make use of tools like stop-losses and limit orders. While there is no guarantee that strategic trading will not cause big losses, successful traders are able to quickly spot their mistakes and exit a trade before it causes even bigger profit declines.
Keeping a record of all of the trades you have executed in a single day is also extremely useful whenever you wish to improve your day trading. As already mentioned, intraday trading is usually related to making multiple orders in a single day. That said, you should keep a track of all of the positions you have opened and close the ones that are still open at the end of the day. Writing down all of your daily trades will help you determine your success rate for the day, which may give you useful directions for your next Forex day trading session.
Pros and Cons of Day Trading
Determining whether day trading is the right Forex strategy for you may be a difficult decision. That is why we suggest comparing the strengths and weaknesses of this type of trading system. For your convenience, below, we have listed the key pros and cons of Forex day trading:
Key Pros
- The potential for substantial profit though multiple small-size gains in a single day
- High liquidity of the Forex market is highly appreciated by day traders
- Smaller drawdowns often help traders to stick to Forex trading for longer
- Long-term strategies like trend trading are also suitable for day trading
- Intraday trading does not involve overnight charges known as swaps
Key Cons
- Sticking to day trading may sometimes lead to closing an order despite the potential for bigger profit accumulated overnight
- Day trading is often linked to high risks, especially when traders place multiple orders in short periods of time
- Swaps offering traders compensation for their overnight positions are not available to day traders
- Day trading requires a lot of time spent in detailed analysis of market price movements
Forex Day Trading FAQs
While scalping and swing trading are similar short-term trading styles, with scalping, you need to be more advanced in trading as you are required to execute a large number of trades within a single day, often many orders lasting just a few seconds as the Forex market is highly liquid. Meanwhile, swing trading allows traders to place orders that last longer, with most day traders practicing swing trading using significant price movements as indicators for open and close positions.
Day traders must consider the commission factor when they plan on executing multiple trades in a single day. While day trading can be profitable as you will accumulate multiple small-size gains if your trading turns out successful, multiple trading commission charges in a single day can significantly reduce your profits.
Some retail brokers have introduced a balance minimum requirement for active day traders. Often, traders who execute day trades at least four times within five business days fall under the category of active day traders. Typically, that requires traders to have a balance of at least $25,000.
No, you can place as many orders in a day as you wish. That said, keep in mind your available balance, assess the risk level, and do consider any commissions that may be charged on every trade you place during the day. While there is no cap on day trades, to be considered a day trader, typically, you need to place four or more day trades within five consecutive business days.
No matter how long you take to develop the optimal day trading strategy, there is no way to predict instances when the trend contradicts your trading decisions, leading to steep losses in a short period of time. However, if you make use of a stop-loss tool, you are able to set up automatic order exits that are activated once your losses start accumulating beyond a limit you have preset. This tool is essential for successful day trading as it can help you minimize your intraday losses significantly.