How do you know which is the right one for you? First you must examine your goals as a trader. Do you intend to trade every day the market is open? Do you want to buy and then sell stocks and make a living of it? Or do you want to trade stocks for investment purposes and hold them? If you goal is long term investing, then almost any broker that charges reasonable fees and gives you online access to your account will do.

If you intend to make a living at trading however, then you need a broker that can handle executions fast. If the broker does not offer a DAT (Direct Access Trading) platform then you are doing yourself a disservice by trading with them, regardless of the commissions and level of service they offer. When the Market is moving fast, as it often does, the difference between getting rid of a loosing stock in under five seconds as opposed to thirty seconds or longer can mean hundreds, sometimes thousands of dollars.

Rule #1. Use a broker that has Direct Access Trading, often called DAT systems.

What type of software are you going to use to make your trades? See our Software Guide for a list of programs we have used that meet or exceed the minimum requirements for Day Trading. If the software you are using does not offer Level II (2) quotes, then you are trading blind. L2 quotes give you a view of a stock and how it's trading. It shows you who is buying and who is selling and at what price.

Rule #2. Use a broker that offers Level II quotes.

What is a fair commission to pay a broker for a trade? While some big brokerage houses are still charging $40 or more, most have come to their senses. As the number of online brokers increase, the price you pay for commissions tend to go down. They want your business. Some brokers that were advertising $19.95 per trade last year are now offering it at $9.95. Some still try to stick you with a low introductory offer, only to raise their commission rates after their trial offer expires. It's our opinion that if you are paying more than $12 per trade, then you are paying too much. There are too many brokers charging much less than that for you to even consider paying more. They don't call them brokers for nothing. Depending on the amount of shares that you normally will trade, you may come out much better finding a broker that does per share pricing instead of per trade. A good per share price is around .015 (1.5 cents per share). For example, trading 500 shares of a stock will cost you $7.50 in commissions, plus ECN fees. In many cases, this may come out to less than $10 per trade.

Rule #3. Do not even consider paying more than $12 in commissions per trade.

In addition the above, you should also have a NASDAQ Futures and Index chart on your screen at all times. A three minute or tick chart would be the ideal timeframe for these.

Below are are brokers that we feel offer best value. As the online trading market evolves, some of these brokers may change their services or price list. At the time of this writing, each of these all fulfill our three basic rules. Note however that the commissions may vary depending upon the amount of trading that you do.