Jan 10 Everything You Need To Start Day Trading
Despite having everything you need to start day trading, you might not be ready for the competition. When it comes to any competitive industry, the people with the best equipment will always have an advantage. Just to list examples, this applies to having a fast car like a Bugatti, a fast gaming rig, or having advanced running sneakers that can cut your marathon time by a few seconds. At the end of the day, in any competition, it will always come to your skill and how well you can execute your game plan.
This means that you should invest in the right hardware and software to enable you to trade better when day trading. It's 2020, new programs are coming out every year and they are improving the way people are trading online. Imagine the trading bots out there? There are bots that actively look for trades, that's a little complicated for me right now but I see where the future of trading is going.
Don't Be Cheap When It Comes To Day Trading
"Don't be penny-wise and fortune foolish. Whenever I'm with a group of new traders, it isn't long before the conversation turns to trade "vehicles" -- the mixture of computer hardware and software used to trade. It's just like tastes in motor vehicles, there is a wide variety of tastes in trading vehicles."
Some traders opt for the "luxury model" day trading system. Day traders must have all of the latest and greatest gizmos and gadgets. Day traders outfit their system with several monitors and all of the software bells/whistles you can imagine. If you didn't know better, you'd think these people were single-handedly landing a space shuttle.
To the other extreme, you find the day traders who insist on buying the economy/budget class system. They equip themselves with the bare minimum-- a low-end computer, an acceptable Internet connection, and the least expensively priced trading tools. They figure that it doesn't matter how you look when you roll onto Easy Street, so long as you get there.
In day trading and as in life, the best course of action is somewhere in the middle. However, if you must veer toward any extreme, I urge you to steer clear of trying to enter the financial race in an economy vehicle. Would you attempt to win the Indianapolis 500 driving a 1973 Ford Pinto? Of course not. The same principle applies to the market. The few dollars you save will pale in comparison to the fortune you squander by settling for inferior functionality. At a minimum, your day trading computer must have the following features:
Day Trading Computers- A Top of The Line Computer
By "top of the line", I mean your day trading computer should have an excess amount of central processing unit speed and random access memory. If your computer is just powerful enough to run your trading software, then its performance is going to be sluggish in the market. Trust me when I say there is nothing more frustrating (and expensive) as being locked out of money-making opportunities because your budget day trading computer has frozen up.
I use Falcon Trading Computers for when I day trade. This is one of the fastest day trading computers on the market and the technical support is top-notch. When your computer goes down in the middle of a trade, the last thing you want is to be put on hold for an hour, wasting your precious day trading time. Then finally have your call answered by someone reading from a script.
High-Speed Internet Access
If you try to travel the information superhighway through low-speed internets, you're going to find yourself being run into a ditch. When you are in a ditch, it's going to cost money to get you out no matter what. That's how day trading is sometimes, if you don't invest in the proper services then you might lose money.
Did I say you might lose money? You will lose money in day trading without the proper equipment. Imagine you just made a trade and it won't load, I'd be going crazy trying to see if I lost or made money. Cut the problem from the start and invest in reliable high-speed internet access. You should be able to see your trades!
Total View by NASDAQ
Just as your access to the Internet must be timely, your access to current stock market information must be just as suitable. While stock market information abounds on the Internet, it isn't always timely. For example, stock quotes posted on a web portal may be delayed by as much as 20 minutes. How is that going to help you make better day trades? It's not. Maybe unless you were swing trading it wouldn't be a big deal, but it's a big deal when day trading. How about if you needed to exit that stock in that 20 minutes and you didn't see the direction it went? You'd basically be gambling with your money instead of trading.
Just having current information isn't enough if the information isn't complete. By complete, I mean that the information must go beyond just the Level I information, such as last bid and ask. You want to be able to see how the market makers are positioning themselves concerning the stock. You need Total View and Bookmap information.
Don't fall into the trap of trying to save a few bucks by getting "Level I and Level II" access. Some providers have begun selling access that lets you see the electronic communication networks but not the market makers. Remember, you want to be able to play follow the leader, not follow the follower. You need to know what the real experts are doing in the market, not the ordinary Joe. Get Total View access and that means start using Total View by NASDAQ. What are you waiting for? Do you want to keep trading blindly or do you want to see the information that will drive you to trade better?
Bells and Whistles
When looking at options for your trading software, you should probably start with the options offered by companies such as METASTOCK, Think or Swim, TastyWorks and TradeStation. Ideally, your Total View execution system should be linked to your charting tools. You don't want to spend valuable time searching for current stock charts. You want to be able to type in the symbol and have your charts pop up. Also, you should be able to customize which charts are displayed.
I like to be able to see the one minute chart, intraday chart and one-year chart at a glance. You also want to have immediate access to the top gainers and losers of the day to alert you to lucrative trading opportunities. When looking at these lists, I like to set my system to sort them by percentages, by gainers and losers, and not just overall dollar amounts.
Of course, you should be careful to avoid cluttering your screen with too much information. You don't want to miss a good trading opportunity because the pertinent information was hidden behind a useless chart or graph on the screen.
One solution to the problem of hidden information is to invest in a computer capable of displaying two to three monitors at once. That way, you can see twice as much information as you could view on one screen. Of course, you don't want to take this idea to the extreme. Ten monitors won't allow you to view 10 times as much information. From my experience as a day trader for over 25 years. I've found that two screens are probably all you can watch at one time anyway. If you try to watch more than two, you usually end up not watching any.
That being said, you don't want to scrimp on everything you need for your day trading vehicle. That's simply being penny-wise and fortune-foolish. If the price of a solid day trading system is a problem for you then you're probably the person in the Mercedes-Benz dealership asking about the car's gas mileage. If you can't afford the gas, then you certainly can't afford the car. Likewise, if you can't afford everything you need in an adequate day trading platform, then you're probably trying to perform on the wrong stage.