How to Start Day Trading in Canada With Wealthsimple or Questrade
Looking to day trade or learn how to day trade in Canada? Look no further.
Day trading in Canada on Wealthsimple, Questrade or other popular brokerages is possible. However, it’s important you are aware of the limitations and advantages of each platform.
Before discussing how to day trade, let’s break down all the opportunities you have as a trader.
Can You Day Trade in Canada for Free?
Most brokerages allow roughly 4 “roundtrip trades” per week before charging fees or other minimum transaction requirements.
What's a Roundtrip Trade?
A trade that consists of a buy and sell within the same day.
- Most brokerages allow four free roundtrip trades every five business days.
If You Want To Start Trading Right Away, Click on the Brokerage of Your Choice To Sign Up
Instead of Day Trading, Perhaps You Might Be Better Suited To Swing Trading?
If you are a newbie or looking to day trade on a consistent basis with $0 commissions on platforms like Wealthsimple, Questrade, TD Ameritrade, IBKR and the likes; it’s recommended to swing trade rather than day trade.
Another option is to brush up on each platform’s day trading requirements as some offer $0 commissions for a minimum balance. These platforms may require balances upwards of $25,000 in your account to qualify for free unlimited day trades.
Take a look at each platform’s fee and requirements. Don’t forget, they also have customer service either online or on the phone to quickly answer your questions.
Five Steps to Day Trading
You Should Start by Opening an Account.
Registering for an account is a definite must. After all, you will need one to access the market and deposit your funds.
Choose one of the options below or continue reading for a full review of the two biggest Canadian players in the self-investing market today.
or
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
|
| 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:
|
| 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.
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 Questrade’s 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:
|
| 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:
|
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:
|
| 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:
|
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.
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 |
|---|---|---|---|
|
✓ | ✓ | ✓ |
|
|
✓ | ✓ | ✓ |
|
|
✓ | ✓ | |
|
✓ | ✓ | ✓ |
|
|
✓ | ✓ | ✓ |
Order Type
| Supported Exchanges | Market | Limit | Stop Limit |
|---|---|---|---|
|
|
✓ | ✓ | ✓ |
|
|
✓ | ✓ | ✓ |
|
|
✓ | ✓ | |
|
|
✓ | ✓ | ✓ |
|
|
✓ | ✓ | ✓ |
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.
Something to Think About...
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.
Instead, you may find using Nobert’s Gambit with Questrade a more cost-effective approach. This technique allows you to circumvent these fees through the use of journaling interlisted stocks and ETFs.
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.
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 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
Account Balance
| Account Type | 
|
|
|---|---|---|
|
|
5.95% | 4.95% |
|
|
10.55% | 10.55% |
|
|
6.20% | 5.2% |
|
|
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.
A Simple Guide: Five Steps to Day Trading
Step 1: Open an Account
Step 2: Learn the Terminology
What is Day Trading?
What Does It Mean To Buy Low?
What is Analytical Trading?
What is Fundamental Trading?
This is the more traditional way of investing. It involves a deep dive into the stock and the company. This includes reviewing all the financials, the industry, competitors and any other market drivers that can influence the stock price.
Now that we have the basics down, it’s time to get into strategies. Pay special attention to each strategy and familiarize yourself with the concepts.
There are many strategies to make some serious dough, we will cover the strategies best for those that are just getting started.
Step 3: Develop Strategies
The market constantly fluctuates, so the goal of a day trader is to buy each stock as it goes lower.
Fundamental Versus Analytical Day Trading
Day Trade Versus Swing Trade
They’re pretty much the same. The main difference is that swing trade doesn’t involve trading on a daily basis.
Most day traders dabble a bit at the beginning. After you gain more experience and budget, it’s recommended to get into day trading with an analytical approach.
Strategy Breakdown
Day traders use many different strategies and form a baseline. We will look at some of the specific strategies that you can use when investing with Wealthsimple and Questrade.
In a nutshell, if a stock crosses the resistance line or support line it’s called a breakout. Day traders and swing traders buy the stock at this point. They do this once a new support line and resistance line are established.
One of the biggest factors for price fluctuations is when institutions and big investors buy a lot of stock. Of late, retail investors also known as the common folk, have influenced a number of stocks drastically.
Step 4: Analyze The Market
The way people make a lot of money is by looking for supports and resistance lines.
When analyzing larger companies and stocks that have more investments it’s safer to say there’s less volatility compared to companies or stocks that are smaller and have less training.
Analytical traders trying to predict patterns look for peaks and valleys on graphs.
A simplified version of this type of analysis is to go off the last two peaks on the graph. These peeks essentially establish the line of resistance. Conversely, the valleys, low points, establish the support line. It’s basically a baseline for what’s to come next.
When to Analyze?
The market constantly shifts and these shifts offer opportunities to buy and sell. Rarely will you find stagnation in stocks.
It’s most common for day traders to be active during the first few hours from when the market opens. That’s because there’s more activity from both retail investors and bigger institutions. Due to higher volatility, the stock has more fluctuations and therefore a greater potential for gains.
What's All This About Scanners?
Part of being a day trader in Canada is to establish scanners that allow you to pick up the chatter as it’s happening or just prior to it happening.
Some of the indicators that scanners use include volume and float. These are two more terms to familiarize yourself with.
Volume – This is the number of shares that a particular stock or investment has throughout the day.
Float – This is an amazing indicator of how much risk or reward you can expect for each trade. This amount is the total amount of shares that you can buy at any given time from any single stock. This is different from the share cap of a company.
Share Cap – often people in a company are given shares to exercise. This is usually part of an employee package or retention plan. The share cap is not calculated in the float.
Why is Float so Important For a Day Trader?
Low Float and a Lot of Volume
For example, if there are 10 million shares floating in the market and the volume jumps to 500,000 or a million then that becomes 10% of the total stock. This is a recipe for high volatility which is what you’re looking for. Of course with this strategy, there are a lot of risks.
How to Scan The Market?
There are two main types of scanners or screeners:
- Pre-market Scanning or Screening
- Gap Scanning vs. Momentum Screening
Methods For Pre-Market Scanning
Most scanners cost money. Day traders who just getting started and on a tight budget, need not worry as there are ways to do this for free or with minimal investment.
Let’s take a look at some of your options.
Gap Scanning vs. Momentum Scanning
Gap scanning basically compares consecutive days. It looks at patterns as the market opes and compares it to the market closing. This helps predict what the next day can produce.
While this is similar to momentum scanning or trading, the main differences are new resistance and support lines are established throughout the day. Momentum screening allows for a breakout to occur at any given point, so there’s much more activity when scanning for this type of pattern.
Luckily scanners automate and often alert you based on specific strategies you want to be notified about.
Let’s check out some common set-ups in both popular Canadian online brokerages.
Step 5: Invest
High-Risk strategy and disclaimers…Yes, day traders face an abundance of risks and potential complications, but with a bit of guidance and framework, and using some market know-how, you too can build a comfortable nest egg.
In order to ride the market and trade with confidence, you must have a game plan. Part of that plan needs to include how much capital you’re willing to risk and how often you want to engage in trades. This can quickly become a part or full-time job because there are so many opportunities and changes that can and will affect the market.
Day traders use many different strategies and form a baseline. We will look at some of the specific strategies that you can use when investing with Wealthsimple and Questrade.
In a nutshell, if a stock crosses the resistance line or support line it’s called a breakout. Day traders and swing traders buy the stock at this point. They do this once a new support line and resistance line are established.
One of the biggest factors for price fluctuations is when institutions and big investors buy a lot of stock. Of late, retail investors also known as the common folk, have influenced a number of stocks drastically.
Related Topics
Slim
19 Jun 2021Both are poor choices for day trading due to fees and limitations.
Clive Shapiro
24 Jun 2021Thank you so much for reaching out to us.
We acknowledge that there are limitations and other important factors to consider when signing up for any brokerage. Both Wealthsimple and Questrade are fantastic options, especially for those just dipping their foot in to test the waters and potentially see a future with short and long-term investing.
Services that offer free commissions do experience delays, may have minimum account thresholds or activity fees. The upside can be worth it for many.
Eva
1 Jun 2022Is there a way to find Canadian companies to day trade so as to not incur fees?
Kimbery Ashington
6 Jul 2022Hi Eva, great question.
US accounts require a minimum balance to allow for day trades without additional fees.
It’s often called a pattern day trade limit. For example, TD Ameritrade and IBKR requires $25,000 (mark-to-market) at the start of the trading day to qualify for $0 commission day trades.
Mark-to-market includes open positions with unrealized gains or losses. It gets a bit tricky for stocks bought on margin, where you need to subtract the maintenance margin amount from your trade equity.