How to Start Day Trading in Canada with Wealthsimple or Questrade

By Clive Shapiro
November 8, 2020

How to Start Day Trading in Canada with Wealthsimple or Questrade

Canadian Flag Blowing in the Wind
By Clive Shapiro

  I

Nov 8, 2020

You’ve probably heard from friends or co-workers about using your mobile device to play the market. That it’s possible to login to your account from your smartphone and make a few swift trades and turn a tidy profit.

Well, I’m here to tell you that you haven’t been led astray and the rumours are true.

So the question is – where do you start?

There are several platforms to choose from and today we are going to review two of the most popular (and certainly my favourites) and set them set up, head to head to see the pluses and minuses of each.

Without further adieu, let’s get started.

Wealthsimple

Wealthsimple began at the hands of founding member and silicon valley veteran, Michael Katchen. Initial plans were drafted in 2014 and then after their 2015 acquisition of the first fully functioning robo-advisor in the nation, they joined the elite list of online discount brokerages.

Today they are currently the only Canadian accessible online brokerage to offer zero-fee transactions for individual stocks and ETFs. For those with straightforward portfolios devoid of all the bells and whistles that come with a managed account, the Wealthsimple Trade app could be your white knight.

If however, you’re curious about having the addition of a robo-advisor paired with human guidance and access to a real portfolio manager, then Wealthsimple Invest is the way to go.

Here’s a breakdown of their selling features:

Wealthsimple Trade
Wealthsimple Invest
No Fees for Stocks and ETF Transactions
iBuying and selling individudal stocks and exchange-traded funds has never been more affordable with commision free transactions
Diversified Portfolio with Robo-Advisor
iBetter for those wth a busy schedule and lack the time to do research and maintian investments on a regular basis. More of a "set it and forget it" methodology
No Minimum Account Balances
iStart off with as much or as little as you desire. Open an account with just a $1 deposit!
Access to a Variety of Accounts
iInvest using any number of the following types of accounts
  • RRSP
  • TFSA
  • RESP
  • RRIF
  • LIRA
  • Joint Accounts
  • Business
  • Personal
Access Market Using Mobile or Tablet App
iBuy, sell, transfer funds and watch all your favorite investements and pontentials from your smartphone or tablet
Auto-Deposit Encourages Steady Gains
iBuild wealth by making small automated contributions with auto-deposit
Buy and Sell with Greater Control
iIdeal for those who have a more or less simple portfolio and prefer to take the reigns. A straightforward "in the pit" approach
Auto-Reinvest Divedend Earnings
i

Using custom algorithms, Wealthsimple can reinvest your divedend earnings as soon as you receive them.

This feature allows you to maximizing your investmet by taking advantage of what's known as "dollar cost averaging".

Wealthsimple Trade
Wealthsimple Invest
No Fees for Stocks and ETFs
iBuying and selling individudal stocks and exchange-traded funds has never been more affordable with commision free transactions.
Robo-Advisor with Diversification
i Better for those wth a busy schedule and lack the time to do research and maintian investments on a regular basis. More of a "set it and forget it" methodology.
No Minimum Account Balances
iStart off with as much or as little as you desire. Open an account with just a $1 deposit!
Access to a Variety of Accounts
iInvest using any number of the following types of accounts:
  • RRSP
  • TFSA
  • RESP
  • RRIF
  • LIRA
  • Joint Accounts
  • Business
  • Personal
Access to Market on Mobile App
iBuy, sell, transfer funds and watch all your favorite investements and pontentials from your smartphone or tablet.
Auto-Deposit Support
iBuild wealth by making small automated contributions with auto-deposit.
Greater Control of Transactions
iIdeal for those who have a more or less simple portfolio and prefer to take the reigns. A straightforward "in the pit" approach.
Divedend Auto-Reinvest
i

Using custom algorithms, Wealthsimple can reinvest your divedend earnings as soon as you receive them.

This feature allows you to maximizing your investmet by taking advantage of what's known as "dollar cost averaging".

Questrade

Questrade’s beginnings date back to 1999 when Edward Kholodenko and his partners hatched an idea to allow investors a uniquely hands-on approach towards the management and execution of their trades.

Their main objective was predicated on the notion that investors who prefer more self-involvement in their market transactions have the same tools available to them as professional brokers but instead be wrapped in a bare-bones, cost-effective package.

Best Canadian stock trading app

Canadian Brokerage Office – Circa 2001

During a time when the internet was still in its infancy, they leased a relatively affordable office and purchased a high-speed data line – just as the markets were starting to allow access through the world wide web.

In the beginning, however, residential surfing was limited to dial-up or 128k kbps as most. Cable and T1 lines were generally too expensive for most families.

As such, placing orders was limited to Questrade's on-site access portals.

Those die-hard clients would make their way to the small office (where the Questrade's headqaurters were initially located) and log in to the online terminals to complete any buy and sell transactions.

At the time there were really only a handful of reps. It was like a small family. With these limitations, services were initially geared towards the more experienced investors; those who could manage their own portfolio with confidence.

Just a few short years later, internet costs were decreasing and speeds were on the rise opening up a multitude of opportunities to reach the masses.

Fast track twenty-one years later, and Questrade has earned its place on Bay street and respected by firms and banks alike as arguably Canada’s  #1 discount brokerage.

With almost seven years of experience offering robo-advising products in the form of Questweath Portfolios, the firm acts as a direct competitor to Wealthsimple and their similar branding, Wealthsimple Invest.

Let’s take a look at how Questrades options matchup:

Questrade Self-Directed Investing
Questwealth Portfolios
Purchase ETFs with $0 Commissions
i

Buying Canadian and US listed ETFs are free of charges.

However, selling ETFs (as well as buying and selling of stocks) will incuur a minimum charge of $4.95 up to maximum of $9.95 with increments of 1¢/share in between.

Quintuple Tiered Robo-Advisor Risk Levels
i

Invest using smart tech. Performs similar to mutual funds but with meatier gains and lower rates.

Choose from 5 levels of risk:

  1. Conservative
  2. Income
  3. Balanced
  4. Growth
  5. Aggresive
Questrade's robo advisor blends algorithmic AI with real portfolio managers.
Offers Access to Registered USD Funded Account
i

For those trading US-listed ETFs, buying and selling from a registered account (such as an RRSP or TFSA) allows you to keep the funds in US dollars.

This offers you substantial savings by not having to convert currencies back and forth, for each transaction.

Desktop and Mobile app Access
i

Mobile App provides account access for trading and transactions, dierctly on either tablets or smartphones.

Optinally use IQ edge - Questrade's custom built desktop version - for extensive market and account analysis, including live streaming data with floating charts and detailed studies/graphs as well as lots of other cool features and extra options.

Free download for anyone – from clients as well as those who do not have a Questrade account.

Dynamically Rebalanced Portfolio
iQuestwealth's hyrbrid model robo-Advisor offers a twist on the traditional "set it and forget it" technique through active management on a per needed basis.
Wide Range of Investment Opportunities
iAccount holders have many options when choosing which type of investment they would prefer to engage:
  • ETFs
  • Stocks
  • Options
  • Foreign Exchange
  • IPOs
  • CFDs
  • Mutual Funds
  • Bonds
  • GICs
  • International Equities
  • Precious Metals
Lower Fees Allow for Higher Capital Gains
i

Impressively low fees, from management charges to funds derived upstream.

If you include the MER (Management Expense Ratio - a fee charged by the the originating fund company and passed on to the brokerage and then to client) the monthly fee's should hover someowhere in and around 0.40%-0.43% of your total account balance.

If you would like to know more about what is MER then click on this link.

Questrade Self-Directed Investing
Questwealth Portfolios
Purchase ETFs with $0 Commissions
i

Purchases for Canadian and US listed ETFs are free of charges.

However sales of ETFs as well as buying and selling of stocks will incuur a minimum charge of $4.95 up to maximum of $9.95 with increments of 1¢/share in between

Quintuple Tiered Robo-Advisor Risk Levels
i

Invest using intelli-software. Performs similar to mutual funds but with meatier gains and lower rates.

Choose from 5 levels of risk:

  1. Conservative
  2. Income
  3. Balanced
  4. Growth
  5. Aggresive
Questrade's robo advisor blends algorithmic AI with real portfolio managers.
Provides Access to USD funded account
i

For those trading US-listed ETFs, buying and selling from a registered account (such as an RRSP or TFSA) allows you to keep the funds in US dollars.

This offers you substantial savings by not having to convert currencies back and forth, for each transaction.

Desktop and Mobile App Access
i

Mobile App provides account access for trading and transactions, dierctly on either tablets or smartphones.

Optionally use IQ edge - Questrade's custom built desktop version - for extensive market and account analysis, including live streaming data with floating charts and detailed studies/graphs as well as lots of other cool features and extra options.

Free download for anyone – from clients as well as those who do not have a Questrade account.

Dynamically Rebalanced Portfolio
iQuestwealth's hyrbrid model Robo-Advisor offers a twist on the traditional "set it and forget it" technique through active management on a per needed basis.
Wide Range of Investment Opportunities
iAccount holders have many options when choosing which type of investment they would prefer to engage:
  • ETFs
  • Stocks
  • Options
  • Foreign Exchange
  • IPOs
  • CFDs
  • Mutual Funds
  • Bonds
  • GICs
  • International Equities
  • Precious Metals
Lower Fees Allow for Higher Capital Gains
i

Impressively low fees, from management charges to funds derived upstream.

If you include the MER (Management Expense Ratio - a fee charged by the the originating fund company and passed on to the brokerage and then to client) the monthly fee's should hover someowhere in and around 0.40%-0.43% of your total account balance.

If you would like to know more about what is MER then click on this link.

Can You Use Robinhood in Canada?

As of late, many of you are asking “Can you use Robinhood in Canada?”

This would be terrific news for many. Sadly they haven’t made their app available north of the border. Not yet at least.

At the present moment, Canadians don’t have access to this platform. However, Wealthsimple Trade or Questrade’s Self Directed Investing are terrific alternatives and choosing one or the other depends entirely on your trading needs, budget and range of opportunities.

If you are interested in a more automated approach (which can be anywhere from a conservative gameplan to an aggressive one), then consider using a robo-advisor platform such as Wealthsimple Invest or Questwealth Portfolio.

Robo Advisor with Questrade
Photo Courtesy of Gladiator © 2020
Both of these top-rated discount brokers run on either full out robo mode or a combination of real human intervention mixed with algorithmic software to form a consistent overall upwards trend of your hard-earned investments.

This Is Why Wealthsimple Is for You.

For those who want to take control of buying and selling individual stocks and ETF’s, similar to Robinhood’s online trading platform, then Wealthsimple Trade should be considered your #1  alternative.

Wealthsimple is ideal for those who want to minimize their upfront costs, and with Wealthsimple Trade, essentially, there are none.

You will pay no fees to open up an account, nor will you have any minimum balance requirements. You will not pay any commissions to buy and sell stocks or ETFs.

You also won’t be dinged if your account has been left inactive for any length of time, which is ideal for those not making regular trades for several months or longer. Most brokers charge inactivity fees – using Wealthsimple you can keep your money in your investment pockets instead of in your brokers.

In all fairness, fees such as those for inactivity are usually to encourage you to stay on top of your investment, which isn’t necessarily a bad thing. Especially if your profits greatly outweigh such losses incurred by these fees.

However, if in the beginning, your trading will be more infrequent than not, then signing up with Wealthsimple would be a more sound approach over other brokerages. After all having a multitude of fees wiped clean off of the menu will enable you to have some extra cash for dessert. 

Who doesn’t love dessert?!

Currently, the Wealthsimple Trade app supports several markets, as well as many ways to fulfill your order. You’ll have access to the following:

Order Type

Supported Exchanges Market Limit Stop Limit
Canadian Registered Questrade margin account TSX
Canadian Registered Questrade margin account TSX Venture
Canadian Registered Questrade margin account NEO
American Registered Questrade margin account NASDAQ
American Registered Questrade margin account NYSE

Order Type

Supported Exchanges Market Limit Stop Limit
Canadian Registered Questrade margin account TSX
Canadian Registered Questrade margin account TSX Venture
Canadian Registered Questrade margin account NEO
American Registered Questrade margin account NASDAQ
American Registered Questrade margin account NYSE

If you arent familiar with market, limit and stop-limit order types you should really check out their description indicating which type of orders are supported by Wealthsimple Trade. It includes some do’s and don’t’s so you can keep up with those Bay st. boys on your next lunch break.

Just like Robinhood was in its pre-teen years, Wealthsimple Trade is only available as a mobile app giving you access to the market on either smartphone or tablet.

For many, this is more than sufficient enough to satisfy their personal trading needs.

Interlude and Words of Caution

If you plan on keeping your purchases within the Canadian market then you’re good to go.

However, if you decide you are interested in investing with US currency ETFs and stocks then you’ll pay an exchange rate every time you trade currencies.

That can add up very quickly and cut into almost all of your profits depending on the development of your portfolio.

You can learn about the Nobert’s Gambit technique which offers a way to circumvent these fees. 

This Is Why Questrade Is for You.

Questrade is better suited for traders and investors who are interested in US equities since they support USD accounts. This will allow you to keep your funds in that currency once you’ve sold them and continue to buy new equities with the funds in that account.

They also allow you to keep these funds in registered accounts (such as an RESP ora TFSA) which further your savings on top of the existing absence of FX fees.

For those who prefer desktop interfaces for trading (or prefer to have the ability to bounce back-and-forth between mobile apps while conducting market research on your laptop), Questrade has got you covered.

Their in-house market and trading software, IQ Edge, is available not only to existing clients but also to anyone with an internet connection and a desktop or laptop running MacOS or Windows 10.

In other words, it’s available for free to anyone.

Not only do they offer a broad range of products to invest in, but they also support many diverse account types in which to hold your funds.

Do Both Platforms Offer Margin Accounts?

There have been quite a few people asking about this lately so we finally decided to include the answer along with some useful percentage borrow rates below.

Unfortunately, at the time of writing this article, Wealthsimple Trade does not offer margin accounts with this product and it doesn’t look like they are going to be altering this limitation anytime soon either.

Questrade on the other hand does offer margin accounts as well as RESP, RRSP and TFSA accounts not to mention a variety of investment opportunities such as options trading, access to precious metals (such as gold and silver), bonds, mutual funds and IPO’s.

For a complete list hover here.

List of Account Types

  • RESP
  • RRSP
  • Individual Margin
  • Joint Margin
  • Family RESP
  • Coporate
  • TFSA
  • LIRA
  • Spousal RRSP
  • Individual FX and CFD's
  • Joint FX and CFD's
  • Partnership

List of Investment Oppurtunities

  • ETFs
  • Stocks
  • Options
  • Foreign Exchange
  • IPOs
  • CFDs
  • Mutual Funds
  • Bonds
  • GICs
  • International Equities
  • Precious Metals

For a complete list

touch here

List of Investment Oppurtunities

  • ETFs
  • Stocks
  • Options
  • Foreign Exchange
  • IPOs
  • CFDs
  • Mutual Funds
  • Bonds
  • GICs
  • International Equities
  • Precious Metals
The interest rates charged for margin accounts using the current CAD prime base of 2.45%, plus lender charges are as follows:
100K and Under
Over 100K
Canadian non-registered Questrade margin account CAD Non Registered 5.95% 4.95%
Canadian Registered Questrade margin account CAD Registered 10.55% 10.55%
American non-registered Questrade margin account USD Non Registered 6.20% 5.2%
American Registered Questrade margin account USD Registered 10.80% 10.80%
100K and Under
Over 100K
Canadian non-registered Questrade margin account CAD Non Registered 5.95% 4.95%
Canadian Registered Questrade margin account CAD Registered 10.55% 10.55%
American non-registered Questrade margin account USD Non Registered 6.20% 5.2%
American Registered Questrade margin account USD Registered 10.80% 10.80%

Can I Open a US Currency Account to Avoid FX Fees When Buying and Selling ETFS and Stocks?

This is an interesting question and one that we’ve been asked a lot recently.

It’s well-known that the primary way Wealthsimple Trade makes its money is by charging a commission on USD to CAD foreign exchange conversions. They charge 1.5% in each direction.

This is on top of the exchange rate differential.

So for instance, if you were to buy US stock on an American exchange you would be charged 1.5% to convert your cash into US funds before you could complete the purchase. Then you decide to sell those shares, you’d get dinged again with that same darned 1.5% conversion rate just to exchange your funds back to Canadian dollars.

The good news is that Questrade allows you to reduce most of this commission fee by offering accounts in US funds. The tricky part is getting money into that account without getting clobbered by the exchange rate fee’s that many financial institutions charge for this service.

Luckily it’s not really that tricky if you understand how to use something called the “Norbert’s Gambit” technique to journal stocks that are interlisted across different markets.

By opening up a US-funded account with Questrade the option of keeping your funds in American currency becomes not only a choice but consequently an advantage.

You will be able to make multiple buys and only be charged a commission when you sell that equity.

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