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Can Etrade Be Right for Day Traders?

22 February 2018 No Comment

The need to be a financially healthy and independent is growing more dire by the day. Capitalism is an unforgiving system, but one that you must attempt to master if you want to be in control of your own destiny and not subject to a business owner or corporation with more power than you. Acclimating yourself to the market and learning how to harness its trends is one way to do that.

So you need to learn how to day trade. And when you want to take advantage of the markets and let your investments work for you, you need to figure out what the best tools are. The craftsman is only as good as his tools. Etrade is a well-known online broker, but you need know whether it can be the right tool for an aspiring day trader. Some of the best known investment platforms online are best suited for casual investors and not high frequency traders.

One of Etrade’s main attributes is speed. Because the company has so much experience in online trader, the infrastructure is good and reliable. Traders can be sure that their trades will go through in a timely manner and they will be executed as ordered. That reliability is a value in and of itself.

The most likely customers for what Etrade is offering is long-term, low frequency traders. These casual investors are not likely to be day traders. They are office workers and professionals with some money on the side that want to manage their portfolios themselves. The interface is friendly to these types of investors, because of its ease of use and pathways to professional advice. There are also opportunities to switch over to a managed portfolio if you do not want to take the reins of your investment right away.

High frequency traders might be better served by a different platform. The high fees and transaction costs can add up significantly, if you are making multiple trades per day. That can really eat into your profits. One interesting advantage to the platform is the ability to add a checking account. You can do regular banking on there. That can be a valuable way to keep your money accessible to your everyday life and your investment decisions.

The account minimum of $500 to trade is probably well received by younger investors and beginner traders. The bar is pretty low to clear if you want to be able to invest with Etrade. The bottom line is that Etrade is best for buy and hold investors, rather than high frequency day traders that need lower fees and more technical indicators.

Being a day trade is all about trying to chase volatility and manage risk. There is not a place for buy and hold if you are committed to day trading. That is a perfectly viable strategy, but the way to trade is more akin to daily gambling than sober, long-term investment. That said, having the right knowledge and the right risk management skills can take you out of the realm of gambling and into the world of a decent side hustle.

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