American Day Trading

CFD Sites in The USA

Whenever possible, it is usually best to stick to a broker that is licensed and regulated within your own country. This gives you the maximum amount of security for your investment. In the US it is the Financial Industry Regulatory Authority (FINRA) that is responsible for broker licensing and regulation. There are of course other aspects that are also of prime importance to day traders.

Mobile Trading

There are more mobile devices in the US per capita than in any other country in the world, so it almost goes without saying that virtually every broker has some form of mobile access to your account and trading platform. Phone apps are becoming increasingly popular, for both iOS and Android, but some brokers still opt for access via a specially optimised version of their website. If the ability to trade on the move is important to you, make sure that you check the broker’s options.

Deals And Incentives

Brokers are constantly on the lookout for new clients, especially so in the US market, which is particularly competitive. This means that you will often see incentives and different types of bonuses on offer that may appear very tempting, but when investigated are rarely as good as they first appeared. We always suggest that you are usually best advised to opt for brokers that reward loyal clients with lower fees and better spreads, paired with top-class facilities and service.

Diverse Asset Types

There are many well-known and reliable brokers that offer a huge number of options across the range of assets preferred by day traders. Whilst this ‘one size fits all’ structure may suit you when you first start trading, it may be less suitable in the long run. Quantity is one thing, but if you are looking for quality, then a broker which offers more interesting derivatives, or specialises in a particular type of trading might interest you more. Either way, it is certainly something to bear in mind as you begin to make a shortlist of potential brokers.

Good Customer Support

The importance of customer support is often overlooked, after all, you are not thinking about problems you might have when you are trying to find a broker. But we feel support is more than just a department that handles problems. We always advise that you look for a broker offering transparency as well as plenty of guidance on every aspect of its services. That is not to say a toll-free number answered by a knowledgeable adviser at any time of day or night is not important too.

American Licencing

Broker Licensing and regulation is more complex in the USA than in almost any other country in the world. As well as needing to have full knowledge of your own state’s regulations, there is also a series of rules you must adhere to as a day trader, without exception. There are four main bodies involved within the US licensing and regulatory processes:

• SEC (Securities and Exchange Commission)
• FINRA (Financial Industry Regulatory Authority)
• CTFC (Commodity Futures Trading Commission)
• NFA (National Futures Association)

The SEC holds a register of all licensed brokers. FINRA is responsible for issuing broker licences, in accordance with state-level requirements. All US brokers are required to attain undertake a series of exams before they can be licensed and there is also a mandatory requirement for continuing education. FINRA is also responsible for issuing day trading rules and for monitoring both brokers and investors to check conformity.

In addition, brokers offering futures, Forex and certain other over-the-counter derivatives must register with the CFTC and apply for membership of the NFA. As a day trader, you also must be aware of the requirements of the “pattern day trader” rule, which will apply to you as soon as you place four or more trades in any five day period. Brokers who service US clients are required by law to freeze your account if you do not conform to the FINRA rules in relation to day trading.