A day trade is simply a purchase and sale of a stock on the same day. Day trading consists of buying and selling stocks throughout the day and closing out all positions before the trading session ends. Day trading has been a viable and profitable trading strategy for many years.
Webull is an online broker founded in 2017 that provides day traders with multi-platform accessibility, zero commissions, 24/7 online support, full extended hours trading and free real-time quotes. Keep reading to find out how to day trade on Webull.
- Intermediate Traders and Investors
Step 1: Open a Webull account.
To begin day trading, you’ll need to open a Webull account. You can open an account either through your mobile device or your desktop computer. Webull does not require a minimum deposit to open an account and offers new traders a paper trading feature so you can practice trading with virtual money.
You’ll need to enter your email address when opening an account at Webull to receive a verification code and enter a password between 8 and 20 digits. Once you’ve received and entered your verification code, you’ll be directed to a Webull page describing their additional insurance coverage for clients and the investor protection provided by the Securities Investor Protection Corp. (SIPC).
After you have registered your account, you can download Webull’s desktop or mobile device app. Desktop computers require a minimum of 320 megabytes of storage space for the application.
Step 2: Log in to the Webull app.
You can now sign in to Webull’s trading app using your email and password combination or your phone number if you’ve signed up with your mobile device. You could also qualify to receive a free 3-month subscription to Webull’s Level 2 market data service.
Webull’s Desktop 4.0 trading platform. Source: Webull
After successfully logging into Webull’s trading platform, just press the button on the right side of the page that says “Unlock Trading.” U.S.-based traders will need to validate their identity before funding a trading account.
You’ll be asked to upload photographs of both sides of your driver’s license. If you don’t have a driver's license, you can still open an account with a valid U.S. passport, a Social Security number (SSN) or an Individual Tax Identification Number (ITIN). If you’re a U.S. resident, you can open an account with an E1, E2 E3, F1, H1B, H3, TN1, O1 or L1 visa.
Step 3: Define your day trade strategy.
Choosing a suitable day trading strategy can depend on your temperament and trading style. Listed below are some of the more popular day trading strategies:
- Scalping: If you’re inclined to pull the trigger often, you might be comfortable using a fast-paced scalping technique since it focuses on capitalizing on small price changes. Most scalpers hold positions for very little time and liquidate as soon as the position shows a profit. Losses also get taken quickly to reduce the risk of further losses.
- Breakouts: This strategy may suit more patient individuals and requires a background in technical analysis. Trading breakouts generally involve taking a position as soon as a chart pattern has been breached on the price chart.
- News trading: Market price activity often revolves around financial news. For example, a company releasing an earnings report or an oil exploration firm that announces an oil discovery creates a news event that could affect their stock’s price after the news is released and even before if rumored. Other news releases like macroeconomic reports and economic indicators can affect the market as a whole and move individual stock prices.
Step 4: Add funds to your account.
Webull has two funding options once you’ve opened a trading account:
ACH transfers
Automatic Clearing House (ACH) transfers involve linking a bank checking or savings account to your Webull account. To fund an account with this option, you provide Webull with a bank account and routing numbers. Upon receiving your information, Webull then makes 2 micro-deposits of under $1 to your bank account to verify that you are in fact on the bank account and can access activity on it.
After you’ve been verified, you can make an ACH deposit, which can typically take up to 5 business days. Once you’ve initiated the deposit, Webull allows you to immediately use a portion of your deposit for trading. Webull has a daily deposit limit of $50,000 per day per account using the ACH transfer method.
Wire transfers
Webull accepts domestic and international wire transfers to fund an account. An initial fee of $8 is charged for the first deposit, with subsequent deposits charged at $12.50 per transaction under $25,000. For deposits over $25,000, Webull waives their fees.
Make sure you check with your bank, since most banks also charge a fee for outgoing wires. Also keep in mind that no third party wires are accepted. Domestic wire transfers take up to 2 business days to complete, while international wires take up to 5 business days to complete.
Step 5: Consider virtual trading (optional).
If you are new to day trading, then a great hands-on way to get the trading experience you need is to use Webull’s paper trading feature. You can buy and sell stocks with no monetary risk by using virtual money in Webull’s free paper trading account. This lets you practice your day trading strategies, hone your money management process and test your trading plan.
Step 6: Start live trading.
Once you decide to start live trading in a funded account, the stocks you decide to day trade depends entirely on your own research. If you intend to use fundamental analysis, then you might begin by selecting the stocks of companies you are already familiar with. For example, if you’ve had professional experience in the semiconductor business, you might want to trade the stock of companies involved in semiconductor production.
If you have absolutely no experience trading stocks, then you’ll need to get some education on how the stock market works. You might also want to learn how to use technical analysis methods to provide objective trading signals you can incorporate into a trading plan.
Fortunately, Webull provides extensive educational resources and a learning center you can access on its trading platform via a book icon on the left side of the trading platform app’s page.
How to Use Charts on Webull
Webull’s trading platform includes a charting function that lets you view charts along with the standard indicators technical analysts might want to use. If you’re unfamiliar with how to use charts when day trading, Webull’s educational resources include helpful material on using charts and technical analysis. You can also find many free articles, videos and tutorials on how to use charts and technical analysis on the Internet.
Webull Promotions
Webull has an attractive promotion where it awards a free share of stock with a value of $2.50 to $250 just for successfully opening a Webull trading account. Unfunded accounts have a 1/100 chance of receiving a share of Snap Inc. (NASDAQ: SNAP), Starbucks (NASDAQ: SBUX) or Facebook (NYSE: FB).
An account deposit of $100 or more gives you a share of stock valued between $8 and $1,600. This includes a 1/50 chance of receiving a share of Google/Alphabet (NASDAQ: GOOG), Kraft Heinz (NYSE: KHC) or Procter & Gamble (NYSE: PG).
The stock you receive in either promotion is the product of random selection using Webull’s lottery system. Companies on the available stock list include both NYSE and Nasdaq stocks with a minimum market capitalization of $2.5 billion.
Related content: BEST NASDAQ PENNY STOCKS
Benefits of Day Trading on Webull
For day trading, Financial Industry Regulatory Authority (FINRA) rules regarding pattern day traders state that you must maintain a net value of $25,000 in a margin account at all times. In addition to commission-free trading, a Webull margin account lets you make unlimited day trades and leverage your day trading positions using up to a 4:1 leverage ratio. You can also make cross-platform trades by using your mobile device to enter an order and then checking the execution results and managing the position on your desktop.
Webull Commissions and Fees
Webull charges no commission on stock trades, but you’ll still need to pay some minimal fees such as Securities and Exchange Commission (SEC) transaction fees and fees from the FINRA that apply to stock, exchange-traded funds (ETF) and options trades.
When it comes to shorting stock, you’ll need to pay for the stock loan charges on the stock you’ll need to borrow to make the short sale. This amount depends on the availability of the shorted stock, the prevailing broker loan rate and the margin account interest rate.
Can You be Profitable as a Day Trader?
Success when day trading generally requires developing key skills like market analysis. It also helps to have beneficial personality traits like the discipline needed to stick to your trading plan and the ability to quickly pull the trigger when establishing and liquidating positions. Since day trading involves strategic risk-taking and generally has more in common with gambling than investing, you will also need to have a decent appetite for risk.
Frequently Asked Questions
Can you buy and sell stock the same day on Webull?
Yes, although you can only make 3 day trades in 1 week in a normal cash account before being considered a pattern day trader under FINRA rules. If you wish to make 4 or more day trades within 5 business days, you’ll need a margin account with a net value of $25,000 to day trade.
Is Webull paper trading free?
Yes, no funds are required to use the paper trading feature on Webull’s trading platform.