What's up you guys? Ross here from Warrior Trading. So in this episode, we're going to talk a little bit about which broker you should use and traders ask me questions about brokers all the time. Ross if I have a 50 account, which broker should I use if I have a 500 account, which broker should I use? If I want to turn a thousand to five thousand, which broker do I need to use? Which brokers enforce the Pdt rule, which ones don't? I've been using Td Ameritrade for a while, but I want to trade your strategy. Can I do? I need to switch to your broker.

Can I do it with Td? So the long answer? Well, the short answer? Well, I guess I'm going to give you both all right? So the short answer is that generally a broker is not probably going to be the deciding factor as to whether or not you're a profitable trader. I think that I could trade in almost any different brokerage account and still make money. I would say that some are going to be a lot easier than others, and I would obviously want to make it easy for myself to be successful. so I might as well trade at one of the firms that are going to be a little easier.

but I don't think that the emphasis should be that I need to trade with this broker in order to be profitable, because then you're almost discounting the importance of strategy. Ultimately, it's the strategy that makes you profitable, not the broker, but having the right tools is important. And as a beginner trader, if you're using the wrong tools, you know it's kind of like stacking the cards against you and increasing the likelihood of you failing. Which you know you certainly don't want to do is you're getting started.

So as you're thinking about brokers, I would kind of turn it around and ask you a couple questions. Which broker should I use? Well, what strategy are you currently trading? Are you a very fast breakout trader or do you aspire to be a very fast breakout trader? Kind of like some of the trades that I take where whether I'm doing a breakout of buying a stock for a breakthrough high a day or I'm buying a quick tap of the volume weight, average price for a rip back up, I need very quick executions for the type of trading that I do. If you're a trader that focuses primarily on swing trading or maybe five minute time frames or slightly longer hold times, you may not need that super rapid execution. You may also not utilize level 2 and market depth a lot in your strategies, but if you do, you certainly want a broker that displays them in a way that's easy to read that allows you to customize them to your liking.

And where the quotes are very, very quick. So the right broker for you? It's It's not really a one size fits all, it's not. This is the best broker. Everyone should use it because the broker that I use, for instance, for most of my trading, um is really good in a lot of ways.

But then there's other things that they're not as good at. And you know, depending on what you were wanting to do for your trading, that if you were only wanting to trade, um, what that broker doesn't excel at, then you'd probably end up getting frustrated, right? So um, so here's a couple couple questions. Number one, of course. what strategy are you trading? So answer that for yourself.

The second would be are you trading in a retirement account? If you're a Us resident and you are trading in a retirement account, it is awesome. It's kind of a no-brainer You're at the very least deferring your taxes. and at the best, depending on the retirement account structure, you're trading completely tax-free so a lot of students will trade in a Roth Ira totally tax-free gains, traditional Ira, or even 401k to defer the taxes. Now, if you're trading in a tax-deferred account, unfortunately, you're confined to using a broker in the United States.

If you're a Us resident and you go open a brokerage account in the Bahamas, they're not going to offer tax deferred account types for U.s residents because they're not a U.s company. So if you're trading in a retirement account, you're restricted to U.s companies. Okay, but there's a lot of U.s companies you could trade with. Um, are you a U.s resident? Are you international? Or are you Canadian? Sadly, Canadians? really? I don't know what it is, but um, excuse me, you could.

Probably. I'm sure there's some articles about it, but there's U.s brokers don't accept Canadians. so if you're a Canadian trader, you are sort of limited in which brokerages you can work with. You can use Trade Zero Down.

In the Bahamas, you can use Quest Trade or Td Direct, both offered for Canadian traders, so those are three options that you could use. If you're an international trader, you can typically use a Us broker. A lot of Us brokers like Lightspeed, which is where I have my account. They accept international traders, so whether you're European, from Uk, Australia, or wherever, really, almost almost anywhere.

Not everywhere. There's certain certain countries that no U.s company is allowed to do business with because of rules and stuff like that, but there's only a few of them. So generally speaking, international traders can open accounts with U.s firms. Uh, even if you don't have a U.s Social Security number, you can still typically open an account with your own documentation from your country.

Another question, so you know the first strategy. Second, you're trading a retirement account. Third, where you located as a Us resident. On the one hand, we have a lot of choices.

We can trade with U.s brokers or international, but of course we're restricted by that pesky Pdt rule the pattern day trader rule. so all U.s brokers enforce it, not just on U.s residents, but on international traders who open accounts with a U.s broker. So the Pdt rule states that if you're going to day trade in a margin account, you need to maintain at least 25 000 to be able to take an unlimited number of day trades. So the two ways around that would be one to trade in a cash account.

But then you have to wait two days for every trade to settle. So if a five thousand dollar cash account with Td Ameritrade, you could trade by five thousand dollars worth of stock on Monday, but then on Tuesday there's no money available. You're waiting for Monday's trades to settle, which settle Wednesday morning. So then you could trade five thousand dollars again on Wednesday.

Alternatively, you could trade twenty five hundred dollars Monday Tuesday, Wednesday, Thursday. Every day, trading half the balance every day. That's still only one trade a day, which is not ideal. Uh, so then as you're kind of working your way down this checklist, you know.

Another question is, are you able to really trade like full time? Oh, you know, Or let's just say an hour a day? Which would be basically the equivalent of full time for a lot of people. So if you can trade from Nine Nine A.m until 11 A.m so two hours a day, that's your time that you focus on trading, then you probably don't need to trade on an app. You can trade on your computer, Which is good because although there's some apps that you can use for trading, they're They're better for people that are kind of dabbling, taking a trade and holding it for a few days. Not really good for super active day trading.

If you're a super active day trader, you usually want to be on a computer. Um, you know, computer trading software. So some of the offshore accounts down in the Bahamas or the Caribbean they give you trading software, but they make you pay for it 100 to 125 dollars a month. Now, if you're able to trade for that full two hours every day, you'll definitely get your money's worth.

But if you're only trading one day a week, or two days a week, you might not really feel like it's worth it. So in that scenario, you might be more inclined to use a Us broker, maybe to have a margin account. Even though you can't hit 25 000, you can still trade three times a week and you can take all three trades in the same day. Or of course, you could use a cash account and trade half the balance each day each day.

And then I think another question before you get kind of too into the decision of which broker you're going to use is what's your experience level. How much have you traded? If you're an experienced trader and you've been practicing a lot or trading with real money a fair amount, then the decision is pretty obvious. you've probably already made it. You know that brokers like E-trade and Td Ameritrade are very, very popular among retail investors.

But as a very active day trader, you know their software wasn't designed for super aggressive day traders. You know that it would be kind of, You know, um, I don't know. pandering to, um, the minority to try to create an amazing day trading platform when the majority of their clients are probably very passive retail traders who take a couple trades a month at most. So if you want software that's really, really focused for active traders, you know you kind of have to figure out well, what are active traders using And so that's where traders will come to me and say, ross, what software are you using So the broker that I use is called Lightspeed and they're in New York.

They cater to institutional traders, professional traders, and um, you know, I guess you would call, um, unprofessional, but full-time traders. Professional is a designation by the exchange about whether or not you've you have your license to trade other people's money. That's technically a professional trader. So I'm technically a non-professional trader even though I do this full time and make six figures just based on the designation from the exchange on licenses.

So Lightspeed really caters to very active traders like myself. Their software is very quick. it's very lightweight. It runs very well on my machine.

I'm a Us resident, they accept U.s residents. They also accept international traders. They allow trading in an Ira, traditional Roth or 401k, which is great. Um, but you know they, um, they're they're not.

Um, they're not free like Td, Ameritrade, or E-trade They do charge you two dollars for every trade, so you know you've sort of got that cost benefit analysis that you have to weigh and make the decision of Is this: Am I getting my money's worth out of it? So one of the things that I asked myself was, if using a broker that really caters to day traders helped me make an extra one penny on every trade I took. How much? How much would that make me in the course of a day? So in one day of trading, an extra one penny for every trade. So if I buy six thousand shares and I make an extra one penny, that's 60 bucks. And if I take 10 trades in one day, that's potentially an extra 600 bucks.

That's a lot of money. So one penny better execution, price on your entry and your exit can ultimately make a big difference. In the days where Td, Ameritrade and E-trade charged commissions, using Lightspeed was a no-brainer If you're an active trader today, you sort of have to weigh all right. Well, if I'm trading with 6 000 shares, then that extra 600 a day.

Potentially that is certainly worth it because I'm not going to pay 600 a day in commissions. But if I'm only trading 600 shares and I'm making an extra 60 a day, well, uh, you know that I don't know. You know that's where you kind of have to ask that question. At what point am I trading large enough share size that I'm getting more money on the execution price than I'm spending on commissions? So the broker that's the broker that I use.

and again, Full disclosure: Open an account with them if you want. Don't open an account with them if you don't want. It makes no difference to me. I don't get paid for referring you to them.

I'm not really referring, I'm just. you know. it's just what I use. So do as you like.

The other broker that I've used for when I've done small account challenges is called Cmeg. Now, Cmeg is a great broker for small account challenges. They're one of the few that accept U.s residents and their minimum account size is 500 bucks. In fact, as long as you have more than 350 dollars in the account, you can trade there and over 500 you have margin and no Pdt rule.

Because they're not a U.s company, they don't enforce the Pdt rule. But then of course you have the risks with trading in a you know, with a foreign broker. Even though offshore Caribbean, uh, Bahamas, you know these aren't like super far away, they are still technically offshore. It's still technically a foreign account.

You do have to just disclose your foreign income if you make money. it's not tax exempt, you still have to pay income tax on it. Uh, and the platform costs 125 a month roughly. Plus you pay commission two dollars a trade.

So you know those costs add up. My feeling is that if you're someone that has perhaps traded a little bit with Td, Ameritrade, or E-trade and have proven that you can be profitable, That in my, in my mind, you will only make more when you start using better tools. But if you don't know anything about trading, then the first step is practicing with what you're comfortable with. If that's Td, if that's E-trade Fidelity, Interactive brokers.

Whatever it is, practice with what you're comfortable with, hopefully in a simulated trading mode, so you're not risking real money by trading in a simulator. You get to prove profitability and proving profitability is something that's really important to do before you trade. With real money, you want to prove that you have what it takes to be profitable, Because once you open that real money account, whether it's with Lightspeed or Cmg, you know now you're incurring that 125 a month or whatever it is in platform fees. Light speed is only 55, but but still, you know it's a monthly fee.

So every month you're starting in the red, essentially on fees and you've got to first get yourself out of the hole now where I'm sitting right now. it's uh, 11 days into the month. But it's actually only. let's see Five Six seven trading days into the month.

and I've already got over forty one thousand dollars in gross profit. So I've covered my 55 platform fee. All right. And of course, I have commissions.

but those are you know, I to me, it's like negligible. You know, when I'm having five thousand, ten thousand dollar days the commission is. It's not a big deal for me. I pay it, and I feel like I get my money's worth, which is really fast execution, ability to get in and out of the market quickly.

A lot of those gains are in a tax-free retirement account, which is terrific. And so I'm really happy with Lightspeed. But you know I'd acknowledge that you need to have a 25 000 minimum in order to be in a light Speed account and day trade as much as I do. And so back in December, that's when I did my Cmeg Small Account challenge.

I funded an account there with 500 bucks. Uh, it took 17 days for me to turn it into fifty Three thousand dollars. Fifty Three thousand dollars in 17 days. Results Not typical that.

That's me as an experienced trader, you know, setting up a 500 account. so I was able to grow it really quickly because I know what I'm doing. I've been doing this for a long time, so on that 53 000, I actually had about 58 000 or so in gross profit and about 4 000 in commissions. Those commissions, in my opinion, were totally worth it.

And of course, you pay the commission as you go. So if you're losing money, typically you would trade less and by trading less, generate fewer commissions. If you're making money, you trade more generating more commissions. But of course, since you're already making money, you know you're not really concerned about the hundred dollars that you might spend in one day on commissions when you just made 800 or 900 in profit.

so your net profit's 100 less. still. Okay, so then of course there's traders out there who use apps like Robinhood and Weeble and stuff like that, and I have a hard time feeling like an app like that. Uh, I think it's a great segue into trading.

Um, a gateway if you will. Um, but ultimately you can't I I don't know anyone that's using Robin Hood that's using it to actually like make six figures. or you know, pay all their bills. I think it's great for people that dabble.

they want to, you know, take a little piece of Tesla. I think it's awesome. It introduces people to the market. It's a very easy way to you know set up the app, you can fund it same day and you know, just like that.

So you know I really do like, um, the idea of Weeble and Robin Hood. But when you're at the level that I'm at, or you're aspiring to get to this level, I think that's when you need to up your game a little bit in terms of the tools that you use. And I think uh, the first step up would be a broker. Perhaps like Td, E-trade Fidelity, uh, you know, Charles Schwab or Interactive Brokers.

Those are sort of the first tier up. They're retail brokers. They're easy to set up accounts with. They generally have very low minimums, although they enforce the Pdt rule, you could still open a cash account and take one trade a day.

And you have great charts and you can lay out your monitors and everything else. The next level above that is looking at brokers that really cater to day traders. And that's if you want to be a day trader. Now you can be perfectly happy as a swing trader or even a semi-active day trader with Fidelity and light speed.

Or sorry, Fidelity, E-trade or Td Ameritrade. We have some students, one of our members of the 100k club. He's actually made well over 500 thousand dollars. He uses Td Ameritrade, so you can do it Absolutely.

But I do think that even for him, that he would probably make a little bit more in with a broker-like light speed, but you know now, he's got no commissions and he makes money so he's not really inclined to go try to learn a new piece of software and I will say that the Td Ameritrade software is so unique to thinkorswim Tv that once you've learned it, nothing else really makes a lot of sense. And if you've learned on something else and try to go into Td, it's like this: It's very unintuitive. I've used it, but I don't find it intuitive. So the next leg up that not everyone goes to but that many will go to would be a direct access type of broker where from your keyboard you can be executing trades just by typing without clicking without having to confirm anything just with buttons.

And so you'll see some professional traders actually have keyboards with like a big green button for buy and a big red button for cell. So it's like boop boop boop. Like Simon, you know, like and they're just doing that. and um, they have keys for offsets and down sets offs you know up positive and negative and cancel order and everything else.

Now I travel quite a bit so what I do is I just use my my keyboard right here. Um, just my. I just use the regular laptop which is totally fine. It's more than adequate, but that's sort of the next level up in terms of software.

Uh, and it's it's not as much of a broker question, because ultimately, you know I'd be happy to trade with Td Ameritrade as a broker if they offered the software that allowed me to trade quickly. It's really a software issue, so I end up using brokers like Lightspeed, Cmeg a Center Point. Um, Trade Zero. Uh, who are a few others that can go off the top of my head? Um, I'm I'm not thinking of any others that are really, really solid, but I'm sure there's a few others out there.

anyways. Brokers like that gave you software direct access to the market. You can trade aggressively. You can trade quickly.

You do pay a little commission for that, but in exchange you get the better execution price I think. And um, in my opinion, it pays for itself. Back to the top questions: How do you find the right broker? Well, are you trading in an Ir, Ira, 401k? Something like that? Because then you're restricted to Us accounts. If you don't have a lot of money, you've got 500 a thousand bucks.

Then the question is okay. Well, are you a Us resident or an international trader? If you're an international trader, there's a lot of brokers that you can use that will accept your business happy to have you. But because all U.s brokers enforce the Pdt rule, you'd probably end up focusing on something like Trade Zero or Cmeg. Because they're international.

They don't enforce the Pdt rule for U.s residents or international traders. Uh, you do have the question of whether or not you want to trade on an app or a computer. There's certainly a question. have you traded before? And then there's the question of, you know, free commissions.

Is it worth it for you to have free commissions or to pay the commission so you know there's no right answer for everyone. And and this video is really a conversation about some of the factors that I think about when I'm making the decision. You've seen me do challenges with E-trade Interactive Brokers Td, Ameritrade, I've traded with Fidelity, I've traded with um, uh, Cmeg. I've traded with so many different brokers over the last, um, nearly 10 years.

it's but. But you know in a lot of ways it's like driving different cars. You drive a Honda. You you get pretty comfortable with a Honda.

You know everything is. I had a Honda for a while that I drove it. It was A. It was a good car.

It was a pretty good car. I ended up. um, it was the only accident I've ever really gotten into. I ran into a deer.

The deer. Well, you know the deer. It's one of those things deer. Kind of stepped right in my path.

but that was in Wyoming. That was crazy. So that was a Honda. Uh, I drove a Toyota for a while.

so you know a Honda Toyota pretty similar. You know, You know, how to drive one. You can probably drive the other. I had my 1985 Mercedes.

Okay, so that one I'd have to have my pedals for the metal 0-60 was like 30 seconds. It's very slow, very clunky, but stable. nice. And again, you can drive a Honda.

You can drive a Mercedes. Uh, you know? well, you get a Miata something like that. That's quick. You got a Porsche 911.

Ooh, you're zipping around. now. You're moving fast. You're lightweight, you're nimble, You can have some fun.

so it's kind of like that with trading. All these platforms for the most part are fairly similar. Once you know one, you usually can translate that pretty well to the other. Some like a, you know, French Citron.

They're Very. They're not. Uh, the brake pedal is A is a button that you push. You know, I mean it's it's unusual.

Uh, you know. But um, you know that's kind of like Td Ameritrade. It doesn't make a lot of sense, but that's what they came up with. and now people use it and they're used to it.

So it's just one of those things that you kind of. you settle in. but you can transition pretty quickly. So I'd love you guys to give me some comments down below of who you chooses, your broker, who do you think is best and and also add on your comment what type of trading you do because certainly for options trading Td Ameritrade is.

their platform is really slick. It's a really nice platform for options trading um, but in light speed. For options it's not as great. but for for day trading stocks, penny stocks, things like that small caps.

you know they're not as good, but I'm eager to hear your feedback and hopefully this helps. some of you guys. think about some of those things that you need to be reviewing as you're getting ready to make your decision. A Broker.

But don't put the Um cart ahead of the Um, the Horse, or the Wac. Just what you want to make sure. See, This is the thing. A lot of people get confused here.

You got a horse and you got a cart. You also have a wagon. You got to line them up in the right order. You put one ahead of the other.

It's not going to work. You can't run a horse backwards. I've tried. it's almost impossible.

So what you want to do? Oh, I've got a phone call. Perfect timing because I'm not doing well right here. What you really want to do Um is trade in a simulator practice. Don't trade with real money until you've proven you can be profitable.

The broker stuff. The decision will become obvious once you get a little more into it. So first trading a simulator. We have a simulator that our starter and pro students use.

Td Ameritrade has a simulator. you can use. Get your feet wet in the simulator, Can you make money? Then what broker should I open an account with? All right, that's it for me. Comments below.

I'll see you guys in the next episode. Hey, did you know that I go live every single morning between 9 and 9. 15 to stream my pre-market watch list. Subscribe to the channel.

Press the bell for the alert and you'll get the notification.