I would like to start swing trading. I am 18 and I was wondering what type of bank account do I need to start doing this? I have never had a bank account. Do I need a regular checking account or do I need a business account? I would like to use TD Ameritrade as my broker but I am most likely going to open a Chase bank account.

closed as off-topic by Chris W. Rea, Nathan L, JoeTaxpayer Sep 10 '18 at 20:04

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  • 3
    Based on "Chase" and "TD Ameritrade", it sounds like you are in the USA. If that's correct, please tag your question. – Ben Voigt Sep 9 '18 at 1:30
  • Open a checking and optionally a savings account. Savings accounts are limited to 6 withdrawals per month. – AbraCadaver Sep 10 '18 at 20:03

Why not just open a money market account with TD? It is basically just like a checking account and will keep everything in one place. One login, one place to go for tax documents and one place to check on the status of your finances.

  • my whole family is basically with chase so they would want me to be with chase also. – raj kod Sep 9 '18 at 18:32
  • I think you will find that moving money will be much easier by having a TD account. It doesn't preclude you from also having a chase account. – user76763 Sep 10 '18 at 15:59

In the US, you are not required to open a bank account in order to swing trade in a brokerage account.

Swing trading involves short term trading of greater than one day which is considered day trading. Be aware that if make more than 3 day trades in a rolling 5 day period, you will be required to maintain a minimum equity of $25k on any days that day trades are made (equities and options).

  • I thought that rule only applies to margin accounts? – raj kod Sep 9 '18 at 18:32
  • Yes, I should have been more specific. The limitation on cash accounts is that you can only trade with settled cash. If not, it's a free riding violation which will result in a 90 day restriction (must fully pay for any purchase on the day of the trade). – Bob Baerker Sep 9 '18 at 18:40
  • Ok, I will be definitely trading with a cash account so I don't need to worry about that lol. – raj kod Sep 9 '18 at 18:45

Traditional banks are an expensive place to trade stocks especially if you are going to trade frequently as with a swing trading strategy. Bank fees are usually much higher than online brokerages. Until recently Chase was charging $24.95 to make stock trades which is very high compared to most online brokerages who usually charge less than $4 a trade.

Some online brokerages are designed for long term stock investors such as Fidelity and TD Ameritrade whereas others such as Saxo Bank, Exante and Interactive Brokers are designed for active professional traders as they offer trading platforms with a lot of functionality. If you want to become an active swing trader, these three will be more of a fit for you.

  • Saxo Bank https://www.home.saxo/about-us/why-saxo: Headquarters in Denmark, they are a well known brokerage although they have recently closed their offices in Turkey and Cyprus and seem to be scaling back which is a concern.

  • Exante https://exante.eu/lp/edward-vickery/: Another European online brokerage with an exceptional trading platform and probably the lowest fees of all. However, the minimum investment is high €10 000 (€500 000 for US citizens).

  • Interactive Brokers https://www.interactivebrokers.com/en/index.php?f=13868: US based so there is a lot compliance and tax forms to complete and due to its popularity with small professional traders and hedge funds in the US, its fees have started to rise.

  • Attempting to trade at $24.95 a trade is foolhardy. $5.95 or so fee per trade is wise if trading larger blocks of shares but a fee per share broker like IBKR is better if you want to scale in and out of positions without penalty (five 200 shares trades is the same $5 commission as one 1,000 share trade). Another perk at IBKR is that they pass through liquidity rebates. With equities, this price improvement will result in a lower price per share cost. With options, it can occasionally result in negative commissions (a credit). What fees are rising at IBKR? – Bob Baerker Sep 10 '18 at 11:48

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