How to Day Trade in Canada: Everything You Need to Know

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How to Day Trade in Canada: Everything You Need to Know

day trading in canada

Canada is a major developed country with a GDP of more than $1.7 trillion. It is a wealthy country with a GDP per capita of more than $46,000 a population of more than $37 million. The country’s economy is highly diversified, with some of its leading industries being crude oil and natural gas, technology, finance, and mining.

Additionally, the country is a member of the United States, Mexico, and Canada (USMCA) trade agreement that was formerly known as NAFTA.

Let us now look at how to day trade in Canada.

What is day trading?

Day trading is the simple process of buying and selling financial assets with the goal of generating a profit. It is a method similar to investing, with the only difference being that traders have a very short horizon. In most cases, traders usually buy and sell assets within a few hours.

Investors, on the other hand, are known for holding financial assets for even decades.

Day trading has become a popular way to make money by both individuals and professional money managers. Its popularity increased during the coronavirus pandemic as more people stayed at home.

Traders were also incentivised to enter the financial market because of the relatively low cost of trading, with many companies charging no commissions.

It was also a very favorable moment, considering the high volatility of the market certified by the VIX index.

Assets to day trade

There are several popular assets that you can day trade. First, there is forex, which is the process of trading different currency pairs like the EUR/USD and USD/CAD. Second, there are stocks, which refers to shares of companies like Shopify and Blackberry.

Third, there are commodities like crude oil, natural gas, and copper. Fourth, you can day trade bonds like the Invesco QQQ and SPY. Additionally, you can trade bonds, which are funds that investors lend to companies and countries. You can even trade indices like the Dow Jones and the S&P TSX index.

What is the TSX and CSE?

Most companies in Canada go public either at the Toronto Stock Exchange (TSX). This is the biggest exchange in the country and its companies have a combined market capitalization of more than $3.1 trillion. Other companies prefer listing at the Canada Stock Exchange (CSE), which has fewer listing rules than the TSX.

Some of the companies listed at the CSE are ACME Lithium, Advance United Holdings, and American Aires. Still, many other Canadian companies prefer going public in New York, where there is deeper liquidity (because liquidity matter!). Some of the top Canadian firms listed in the US are Shopify, Blackberry, and Sprott.

How to day trade in Canada

The process of day trading in Canada is relatively easy. It is actually relatively similar to that of other countries like the United States, UK, and Australia.

First, you need to open a trading account with one of the popular trading brokers in the country. Some of the most popular Canadian stock and forex brokers are TD Ameritrade, Interactive Brokers, Questrade, andCIBC Investors Edge.

Many other Canadians prefer using prop trading firms like Real Trading. Our company allows traders to make money trading most instruments like stocks and ETFs. We have direct market access (DMA) and have stocks in companies from around the world.

Related » Direct Market Access vs. Retail Trading

Second, you should learn more about day trading and how it works. Taking time to learn will provide you with the information you need to become a successful trader. Some of the topics you should learn are:

among others.

Third, you should take time to develop and test a trading strategy. Some of the strategies you could use are pairs trading, algorithmic trading, copy trading, swing trading, and arbitrage. You should also test the strategy well.

Finally, you should deposit funds to your recommended broker and start trading. Ensure that you stick to the strategy you developed above.

Best time to day trade in Canada

Depending on your broker, it is possible to day trade 24 hours, 7 days a week. The most popular assets that trade on a 24 hours 7 days a week are cryptocurrencies. You can use brokers like Coinbase, FTX, and Huobi to day trade these assets.

You can also trade global stocks if your broker provides them. At Real Trading, our traders have access to more than 50 markets from around the world. This means that you could trade for extended periods per day.

Still, if you are interested in Canadian companies, your duration of trading will be relatively short. The TSX stocks usually open at 08:00 AM and close at 5:00 PM (ET). Between 5pm and 5:30pm, there is the post-cancel season. Meanwhile, CSE stocks usually open at 9:30 AM and close at 4:00 PM.

The best periods to day trade these stocks is slightly after the markets open and before they close.

Trading the Canadian dollar

The Canadian dollar is a popular currency to trade. The most popular pairs with the Canadian dollar are the USD/CAD, EUR/CAD, and GBP/CAD.

The Canadian dollar is known for two key qualities. First, it is a currency that is seen as a proxy for crude oil. This is because Canada is the fourth-biggest oil exporter in the world. As such, the currency tends to react to the overall movement of oil prices.

Second, the currency is sensitive to the happenings in the United States because of the volume of trade that the two countries do. Therefore, the Canadian economy does well when the US economy is doing well.

How to start day trading in Canada

Real Trading is a Canadian company that helps traders around the world make money in the financial market. To create an account, just visit our website and fill a form. You will be assigned an account manager who will guide you through the process. You can also sign up with other forex and CFD brokers.

Trading and investing taxes

Like all countries, Canada changes some capital gain taxes for investors and traders. However, these taxes don’t apply equally. If you are using trading as a way of making supplemental income, then you are not eligible to claim capital gains.

In Canada, just 50% of all capital gains are taxable. These capital gains happen only when a person sells investments. Interest income is taxes at the same marginal tax rate as ordinary income. Further, funds from dividends are taxed at a relatively lower tax rate than interest income.

Canadians can reduce their trading taxes by using tax loss harvesting, using sheltered accounts, and tracking your expenses.

Canada day trading regulations

Canada has placed many regulations in a bid to protect investors and traders. The sector is overseen by the Financial Consumer Agency of Canada. Day trading and investing are both legal in Canada and there are several brokers that make this possible. Some of these firms are WealthSimple, TD Ameritrade, and Interactive Brokers.

Another thing is that the Pattern Day Trader (PDT) rule does not apply in Canada. This is a rule that is common in the US for margin accounts. As mentioned above, day trading is also taxable in Canada while tax deductions from day trading losses have no limit in Canada.

The oversight of the rules is carried out by the IIROC (Investment Industry Regulatory Organization of Canada). This national self-regulatory organization oversees all investment dealers and trading activities in the debt and equity markets in Canada.

Among other tasks, the organisation must also oversee market manipulation, including Layering, Quote Stuffing, Quote manipulation and Spooning.

If you are interested in all the rules of the IIROC , you can find them up-to-date on their website.

Top Canada day trading brokers

A common question is on the best trading brokers in Canada since companies like Robinhood are not available there.

For most people, we recommend using Real Trading to create your trading office. With our platform, you have access to thousands of markets from Canada, US, Australia, and other regions.

The other Canada brokers you can use to day trade are Questrade, Interactive Brokers, and WealthSimple.

FAQs about trading in Canada

Is day trading in Canada legal?

Yes. Like in most countries, trading is legal in Canada. In fact, the country has many traders who seek to take advantage of movements in the financial market.

What are the trading taxes in Canada?

Canadians pay a capital gains tax for their trading profits. Your trading profits are taxable. However, you can offset your losses from the total calculation. Also, like the wash sale rules in the US, Canada has the superficial loss rule.

How much money do you need to trade in Canada

There is no lower limit of the amount of money you need to day trade in Canada. Indeed, there are some brokers who accept trading with as little as $50. To get started with Real Trading, the minimum required is $ 500.


Day Trading is increasingly becoming a great career and business opportunity for many people in Canada. In this article we have covered some key points and frequently asked questions. But if there’s anything else you still want to know, feel free to ask us in the comments.

External Useful Resources

  • How to Calculate Capital Gains When Day Trading in Canada – Turbotax
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