Be cautious if you are motivated to simply sign up with the cheapest online stock trading brokerage firm you can find. There are AT LEAST three immediate questions to ask:
1) Apart from the cheap rates, ask if will you get a per-trade and compiled breakdown of all fees. Such fees may include ECN fees (and ask if you get any existing ECN rebates), monthly day trading software fees, wiring fees, and other fees not readily apparent. Before you sign the account papers, be sure that you know ALL of the fees to which you will be subject. Compare those fees against what you will be charged by other firms.
2) Ask if you get any sort of training or other educational support. Some day trading firms allow you to listen to one of their selected trader’s live market calls, others allow you to communicate via a chat room or instant messaging software, and others may provide you with day trading training materials such as DVD’s or an online trading training video series.
3) Ask if they have a risk-monitoring feature. Not all firms offer this, but most successful traders will tell you that violations of money management and trading outside of their pre-determined rules have hurt their accounts significantly. Ask the online day trading broker if they offer the ability to pre-set limits on your trading such as a maximum number of open positions, maximum number of open shares, or a maximum open loss before they notify you to reduce your risk. Having a minor “outside enforcer” may give you SOME reassurance that another entity can help keep you disciplined besides yourself. Remember, however, that all responsibility is yours, even if the online day trading broker provides risk-monitoring services.
You may be tempted by the lure of low trading commissions; but make sure that you are, in fact, getting the best overall deal before signing your day trading account forms.