Trader Tips
Sep. 25, 202317 min read

Is TD Ameritrade Good for Day Trading? Detailed Review

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Written by Tim Bohen

It’s normal to wonder, is TD Ameritrade good for day trading? It’s a leading online broker offering an array of trading services, including stocks, ETFs, options trading, and more. With robust trading tools across desktop and mobile platforms, it caters to both beginner investors and seasoned traders.

The platform provides extensive resources like … 

  • Educational content
  • Professional guidance
  • Real-time data

All to support informed financial decisions.

With the in-progress merger with mega-broker Charles Schwab set to reach completion by the end of 2023, the company will be able to offer even more.

And that says a lot for a broker who is already one of the leading choices for day traders today.

Day trading is about capturing the market’s daily movements, whether up or down.

TD Ameritrade stands tall in the arena of online brokerages. With a plethora of tools and resources at your disposal, the question arises, is TD Ameritrade good for day trading?

Let’s dive into it and analyze the offerings, fees, platforms, and everything that plays a role in making a trading platform suitable for day trading.

Table of Contents

What Is Day Trading?

Day trading is buying and selling securities within a single trading day. This type of trading often involves stocks, ETFs, options, and even some cryptocurrencies.

Traders aim to capitalize on short-term price movements to make profits, using trading platforms with the right tools for analysis and execution.

It’s crucial to be aware of the associated risks, and how trading platforms like TD Ameritrade facilitate this fast-paced trading environment.

Does TD Ameritrade Allow Day Trading?

Yes, TD Ameritrade allows day trading and provides resources to support the activity. They offer a range of platforms, including Thinkorswim, which is rich with features like charting, indicators, and analysis that day traders need.

They also have educational content for clients, catering to both novice and experienced traders. 

Their mobile app ensures traders can manage positions on the go.

Remember, while TD Ameritrade offers the tools and resources, success in day trading is still largely dependent on individual strategies and market conditions.

Penny stocks have become a popular trading option for many traders, offering the potential for significant returns. TD Ameritrade provides access to these high-risk, high-reward assets, but it’s essential to have the right tools and insights to navigate this volatile market.

For those interested in exploring the world of penny stocks, especially on platforms like Reddit, additional resources can be invaluable.

Learn more about penny stocks on Reddit and how to approach them with caution and strategy.

Is TD Ameritrade Good for Day Trading?

TD Ameritrade is often regarded as a strong choice for day trading, given its robust platforms, extensive research, and customer service.

It has a variety of tools that cater to different types of traders, from the casual investor to the serious day trader. Margin trading, options trades, and a vast array of securities make it versatile.

However, commissions and fees might affect profits, so careful consideration of costs is essential.

Comparing TD Ameritrade to other trading platforms is essential to finding the right fit for your trading needs. While TD Ameritrade offers robust tools and resources, understanding how it stacks up against competitors like E-Trade can provide a more comprehensive view of your options.

E-Trade is another platform known for its day trading capabilities, and comparing the two can help you make an informed decision. Discover more about E-Trade for day trading and how it compares to TD Ameritrade to find the platform that best suits your trading style.

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TD Ameritrade Account Options for Day Trading

TD Ameritrade offers two main account options tailored to the day trading community: Cash account and margin account.

Here’s something significant — by the end of 2023, TD Ameritrade accounts will be integrated into the Charles Schwab brokerage. This merger opens up a new chapter in the industry. Both companies share the intent to enhance offerings, combining best practices and features. 

Whether you are trading stocks or trading bitcoin and forex, the merger aims to enhance the range of products and services, creating a synergy between platforms.

Cash Account

With a cash account, traders can buy securities with the available cash balance. There’s no access to margin, limiting risk but also potential profits.

It’s a simple option for beginners without the complexities of margin rules.

Margin Account

Margin accounts at TD Ameritrade allow traders to borrow funds, enhancing buying power. This can be lucrative but also risky, as it can amplify both gains and losses.

Understanding margin rates and the potential risks is key here.

Pattern Day Trading Rules on TD Ameritrade

Pattern day trading rules apply to those who execute four or more day trades within five business days. TD Ameritrade enforces these rules, requiring a minimum account value of $25,000.

Traders need to be aware of these rules as they can affect trading strategies and accessibility.

Benefits of Day Trading with TD Ameritrade

TD Ameritrade offers a vast array of tools, from charting capabilities to watch lists and an extensive education section for beginners.

Integration with different devices, various asset classes, and paper-trading for practice make it a compelling option.

Consideration of the bottom line, however, should include fees and commissions, which could impact overall results.

TD Ameritrade provides access to a wide array of trading opportunities, including the intriguing world of penny stocks. These high-risk, high-reward assets require careful navigation, and having the right tools and insights is crucial.

TD Ameritrade’s platform offers features tailored to trading penny stocks, making it a preferred choice for many traders. If you’re considering trading penny stocks with TD Ameritrade, this detailed guide will help you understand the platform’s offerings and how to leverage them for success.

Downsides of Using TD Ameritrade for Day Trading

Despite its features, TD Ameritrade does have some drawbacks. Commissions on certain trades, inactivity fees, and complexities around margin trading can pose challenges. 

Additionally, over-the-counter (OTC) trading is limited, restricting access to certain markets. It’s worth noting that these aspects might not affect all-day traders, but are worth consideration.

Is Day Trading Free on TD Ameritrade?

While TD Ameritrade offers commission-free ETF trades and some stock trades, costs may still arise in the form of spreads and other fees.

Understanding the exact fee structure is key to avoiding unexpected charges and making an informed decision about whether it fits your trading strategies.

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Have you day traded stocks on TD Ameritrade? Let me know in the comments!

Frequently Asked Questions

How to Day Trade on TD Ameritrade Without $25,000?

Trading without $25,000 is possible, but it limits you to a cash account and non-pattern day trading.

Strategies must be tailored accordingly, and compliance with the pattern day trader rule is crucial.

Is Day Trading Free on TD Ameritrade?

Though many trades are commission-free, some fees might apply. Understanding the specifics and considering them in trading decisions is essential.

How Many Day Trades Can You Make on TD Ameritrade?

Unlimited day trades are permitted for accounts above $25,000. If under, the pattern day trading rule limits you to three trades in five business days.

How Much Money Do You Need To Open a TD Ameritrade Account?

You can open an account with no minimum deposit, but margin accounts require different criteria.

How To Remove Pattern Day Trader Status TD Ameritrade?

Removing this status requires careful compliance with regulations and possibly contacting TD Ameritrade’s customer service for assistance.

How Does TD Ameritrade Compare to Its Competitors?

When compared to competitors like Fidelity and Charles Schwab, TD Ameritrade stands strong in platform offerings and tools. However, fees and some account types may vary.

Most competitors will offer similar services and access to assets like stocks, bonds, and mutual funds.

Is TD Ameritrade Good for Beginners?

With educational resources, tools, and user-friendly platforms, TD Ameritrade caters well to beginners.

Among other things, the customization, tutorials, and paper trading options aid in easing newcomers into the world of trading.

Can You Lose Money on TD Ameritrade?

Risk is inherent in trading, and it’s possible to lose money on TD Ameritrade just as with any brokerage.

Careful risk management and understanding of the tools and securities you’re dealing with are key to limiting losses.

Day trading can lead to substantial losses.

A 2019 study called “Day Trading for a Living?” looked at the success rates of Brazilian traders over a 2-year window, and found that 97% of traders with more than 300 days of active trading lost money.

Only 1.1% earned more than the Brazilian minimum wage — that’s only $16 per day!

What Platforms and Tools Does TD Ameritrade Offer for Trading, Including Desktop, Mobile, and Web Platforms? Is Thinkscript Supported?

TD Ameritrade offers various platforms, including a desktop platform, mobile trading apps for Android and iOS, and a robust web platform.

They also support thinkscript for customized scripting and provide screeners and webcasts through the TD Ameritrade network for an enhanced trading experience.

What Types of Financial Products Can You Trade With TD Ameritrade, Such As Futures, Penny Stocks, or Forex Trading?

TD Ameritrade provides access to a diverse range of financial products, including futures, penny stocks, shares, equity, various asset classes like CDs, and forex trading.

Market assets by any name, TD Ameritrade is likely to have access. This wide selection allows for diverse investment strategies and portfolio building.

How Does TD Ameritrade Handle Trading Performance and Volatility Analysis? What Charts and Volume Data Are Available?

TD Ameritrade offers comprehensive trading analysis tools, providing insights into performance metrics, volatility patterns, and volume data.

They present this information through interactive charts, comparisons, and averages, allowing for a detailed understanding of market trends.

How Does TD Ameritrade Engage With Its Users and Customers? What Can You Tell Me About Their Phone Support, Watchlists, and Overall Ratings and Reviews?

TD Ameritrade emphasizes user engagement, offering personalized watchlists, responsive phone support, and a focus on customer satisfaction.

Their ratings and reviews often highlight positive experiences, reflecting the company’s commitment to meeting the needs of brokers and individual users.

What Resources Does TD Ameritrade Provide for Education, Like Videos, YouTube Content, or Courses?

TD Ameritrade offers an extensive library of educational resources, including informational videos, YouTube tutorials, courses on various trading topics, articles, and a diverse lineup of webinars. These resources cater to both beginners and experienced traders.

How Does TD Ameritrade Handle Trade Executions, Orders, and Contract Purchases and Sales?

TD Ameritrade provides a streamlined process for trade executions, managing buy and sell orders, and handling contracts and purchases.

Their system ensures efficiency and accuracy in order execution, catering to various trading styles and preferences.

What Measures Does TD Ameritrade Take for Security and Compliance With Regulations Such As FINRA and Equity Calls?

TD Ameritrade prioritizes security, implementing robust protocols to protect user information and adhere to FINRA regulations. 

They also manage equity calls and other compliance needs to ensure alignment with legal requirements and best practices.

How Does TD Ameritrade Manage Wealth and Investment Transactions, Including Payment Methods and the Use of Credit Cards and Investment Calls?

TD Ameritrade offers a comprehensive financial management system, accommodating various payment methods, including credit cards, and overseeing investment calls.

They aim to make transactions smooth and secure, catering to individual wealth management and investment needs.

What Strategies and Thought Processes Does TD Ameritrade Offer To Support Traders? How Do They Assist With Someone’s Revenue Goals, Accuracy in Trading, and Idea Development?

TD Ameritrade supports traders with tools and insights for developing strategies and analyzing revenue goals. They provide advice, facilitate process improvement through PDT, and offer solicitation tools for idea development.

Their focus on accuracy and tailored approaches caters to various trading styles and objectives.

How Does TD Ameritrade Provide Market Analysis and Insights? What Studies, News, and Quotes Are Available Through Their Site and Trading Activity Tools?

TD Ameritrade offers robust market analysis through various studies, real-time news feeds, quotes, and tracking trading activity.

Insights are available through their site, and ticker symbols offer quick access to relevant market information.

Is TD Ameritrade Available in Other Countries Like Canada and the UK?

Yes, TD Ameritrade extends its services to several international regions, including Canada and the UK, allowing traders in these areas to access its platforms and trading products.

What Miscellaneous Details, Such as Part Numbers, Basis Calculations, and Version Information, Should I Be Aware of With TD Ameritrade?

TD Ameritrade provides detailed information, including part numbers for specific tools, basis calculations for tax considerations, and version updates for their platforms and apps.

They offer plenty of resources to ensure users are well-informed about various aspects of their trading experience.

Can I Open an IRA With TD Ameritrade, and What Investment Categories Are Available? How Does the Amount of Investment and the Selection of Categories Matter in This Regard?

Yes, TD Ameritrade allows you to open an IRA account, providing a broad selection of investment categories.

The amount you choose to invest and the categories you select can greatly matter in shaping your retirement strategy. Various options are designed to suit different investment needs and goals.

How Does TD Ameritrade Integrate Market Information From Sources Like Benzinga? Are There Specific Times When Updates Are Provided, and How Does This Feed Into Trading Strategies?

TD Ameritrade integrates real-time market information from sources such as Benzinga, providing updates at critical market times.

This information aids in formulating trading strategies and offering insights into market trends and opportunities. Timely data can be essential for making informed trade decisions.

What Are the Pros and Cons of Using TD Ameritrade From a User’s Perspective? How Do Ease of Use, Cash Accounts, and the Overall User Experience Factor Into People’s Thoughts and Decisions?

The pros of using TD Ameritrade include ease of use, various cash account options, extensive tools, and resources tailored to different trading levels.

Some users might find the abundance of options overwhelming at first, but overall thoughts reflect a positive user experience. People appreciate the intuitive design and the way it caters to both beginners and advanced traders.

How Does TD Ameritrade’s Platform Provide Detailed Insights Into Order Flow, Returns, and Investments? How Can I Find Information About User Rights, Levels of Access, and Purposes of Different Statements?

TD Ameritrade’s platform offers in-depth analysis of order flow, returns, and investments, providing different levels of access based on user rights and needs.

You can find detailed statements that serve various purposes, including tracking performance and managing accounts.

The platform is designed with user experience in mind, ensuring ease of navigation and understanding. The Apple app also provides a seamless experience for iOS users.