The first step for day traders is to decide which platforms to use. For newbies, the amount of options to choose from may get overwhelming. However, the search becomes easier with a few things in mind.
Here are the key aspects which will help you choose the right trading platform:
- Age and reputation: The longer the exchange has been around, the more reliable it is.
- Choice of coins: Day traders mostly trade altcoins and are more interested in exchanges with the largest number of supported crypto pairs.
- Liquidity: An exchange's liquidity is how quickly it can transform one asset into another without affecting its price. In other words, how actively it’s being traded. If the exchange is highly liquid, you can buy or sell assets on it immediately and with minimal spreads. And vice versa – illiquid markets take longer to fill each separate order, and often have slippage because of high spreads.
- Fees: Day trading involves making more deals than swing and mid-term trading, so it’s a lot more fee-heavy. Most day traders choose their brokers based on the ratio of the fees and the number of traders they’re going to make.
- Payment methods: Almost all exchanges allow bank transfers, but not all exchanges work with credit cards, PayPal or similar payment systems. Before choosing an exchange for day trading, you should make sure its payment methods are convenient for you.
- KYC aka identity verification: for many hardcore crypto lovers, KYC (know-your-customer) is a no-no. However, platforms that require you to verify your identity are often the largest and offer an extended set of pairs to trade and other options to make money.