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How to start Day trading in the UK?

Financial analyst

Day trading is a trading technique where all open positions are closed before the trading day is over. No positions are held over night.

Day traders focus on intraday price movements and do not make long-term investments. Using technical analysis is very common among day traders, since they are more interested in imminent market reactions than trying to analyse underlying values and predict long-term price changes.

Intraday price changes are usually smaller than those exploited by traders who keep positions open for weeks or more. Because of this, day traders tend to open large positions, or open a multitude of small positions within a very short time-frame. That way, the accumulated profits from a small price movement in the right direction can be substantial.

How can I find the best broker and platform for day trading?

There are many brokers and platforms to chose from that are suitable for day trading. Exactly which one that is best for you will depend partly on your own preferences. Also keep in mind that it is perfectly permittable to have accounts with several brokers to utilize their various strenghts. You might for instance find that one broker is best for your forex day trading while another is better for day trading in stocks.

With that said, there are a few common denominators to look out for when selecting a broker and platform for day trading. Here are a few examples:

  • The available assets. You want assets with high-liquidity and high-volume. Alternatively, you want to use products where you don´t have to wait for a buyer to close the position, such as Contracts for Difference (CFDs). Even when using CFDs or similiar products, day traders tend to pick underlying assets with high-liquidity and high-volume since they are more likely to produce the types of price movements desired by day traders.
  • Speed of execution. So, you have taken a position in an asset with high-liquidity and high-volume, and when you put in your sell order you naturally expect the position to close in an instant. But it doesn´t, because the broker and/or platform is causing a delay. This is not good. In day trading, the split of a second can have an impact. Leave brokers and platforms that aren´t quick enough.
  • Broker fees. If you are going to make just a small profit from each profitable trade, you can´t afford to pay a big broker fee for each purchase and each sale. Select a broker and broker account suitable for day trading, where broker fees are charged in a manner that´s adjusted to the nature of day trading. You don´t want to get stuck with a broker whose fee schedule was created for long-term investors.
  • User friendly platform. When every fraction of a second is important, you shouldn´t be messing around with a bad platform that slows you down. Before you open an account, use the free Demo trading account to try out the platform with play-money and see how quickly you can navigate it once you´ve gotten the hang of things. Some platforms are more user-friendly than others, and there are also personal preferences to take into account. Generally speaking, why would you make a deposit if the broker refuses to let you try the trading platform with play-money first?

Do I need a huge bank roll to be a day trader?

No, but you need to be willing to adjust your trading strategy to the size of your bank roll.

  • If your bankroll is small, only open small positions that account for a mere fraction of your total bankroll.
  • If your bankroll is small, do not open multiple small positions simultaneosly since that will put a major part of your bankroll at risk even if each individual position is small.

Be patient and grow your bankroll over time.

Does profitable day trading require access to a trading desk?

No, it is possible to become a profitable day trader on a standard retail trading platform.


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How to start Day trading in the UK?

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