| The Tools of the Trader
By Floyd Snyder As the moderator of Daytraders, the net’s top real-time, live, chat room dedicated to stock trading, I receive many requests and questions on a daily basis. One of the most frequently asked questions I receive is, “What are the tools I need to day trade?” Many subscribers want to know what broker to use, what kind of computer, how many monitors etc., etc. So let’s cover a few of these questions. Computers: The computer you choose today is not nearly as difficult a decision, nor as expensive, as it once was. Most everything you buy today is going to have the horsepower for trading and at a fraction of the cost it once was. With boxes as inexpensive as they are, you for sure don’t want to skimp. Yet, at the same time you don’t need an IBM mainframe either. I’ll not get into brand names because most, if not all, of the computers on the market today will do just fine. However, there is one thing you do not want to over look - memory. Many systems still come standard with just 512k of memory, especially laptops. I strongly suggest you get at least a megabyte or more of memory. Get as much as you can comfortably afford. Monitors and Video Cards: Make sure you have a video card setup with the capabilities to run at least three monitors. Some people are running as many as 7 or 8, but for the most part you can get by with 3. I would suggest you get at least the 17 inch monitor, but of course, there are certainly larger monitors out there. Depending on your budget you can end up with as much viewing space as your local ten-plex theater. I suggest you don’t get that carried away. First of all, the more you hang on the system, the more sluggish it will run. Also, the more screen space you have, the more likely you will be to be opening up all sorts of windows that can only become a distraction. Brokers: I strongly suggest you look into using one of these two day trading specialists: MBTrading or CyberTrader, with a strong personal bias for MBTrading. My bias is based simply on past experience. Keep in mind we are talking day trading here, not investing. For day trading, fast execution and customer service are the two most important considerations on which you need to base your decision. Commissions are really not as important as you would think. These companies are very competitive now, and the fee structures are not that varied any longer. Poor execution and inadequate customer service can cost you many times more than the savings you might realize by using the wrong broker. I often make the somewhat silly analogy of “trying to trade with anything other then a fast, point and click day trading system like MBTrading or CyberTrader, is like trying to win the Indianapolis 500 with your family mini-van.” The other thing you need to be cautious of is people recommending “their own” discount broker. Most have never even seen an MBTrading or CyberTrader system. Suffice to say, the differences are drastic. Quotes and Data Feed: Depending on which broker you choose, you may also need a stand-alone quote/data feed. I suggest you ask the broker you choose to make a recommendation here. They have worked closely with different data suppliers and should be able to tell you which one is doing the best job with their service. However, who ever you do choose, make sure you have real time charting, Level II quotes for both the NASDAQ “and” the Dow listed stocks. News and other information: You don’t need to subscribe to every news service in the world. This is not only costly but is just going to fill your screen(s) with a lot of news you really can’t use. Remember, it is not your job as a trader to be on top of every stock move on every breaking news story. You only need to find a few stocks a day to make money on. This is also why I was cautioning against too much screen space. If you have the space, you are much more inclined to fill it with more information that needs digesting. I suggest you subscribe to Dow Jones News. The best price is usually through your broker, and in many cases it is integrated right into your trading platform or data feed. I also suggest you subscribe to Daytraders.com (self serving as that may sound). Daytraders.com is monitored (by yours truly), and we cover as many breaking news stories as we can. We also make stock calls (Buy, Sell, Short, Scalp, etc.) including analysts’ actions, volume alerts, research alerts and many trading ideas (stocks) posted by the membership itself. The room is for professionals and is strictly monitored to eliminate inappropriate trading and off topic comments to insure professional behavior. Being a part of a group of savvy traders gives you the benefit of many pairs of eyes and ears. I also suggest you monitor MarketWatch.com. It is free and does deliver some real time news. It also gives you a lot of trading ideas as well as in-depth stories on stocks that are in play for the day. The other free news service you will want to bookmark and keep handy is Yahoo Finance. It’s not real-time, but it has a wealth of research information along with delayed news. Other information at Yahoo Finance includes detailed quotes, 52 week highs and lows, float information, short interest, analysts’ opinions, upgrades, downgrades, stock screeners, etc. You will also want to have your TV tuned to CNBC. A mere mention on the air can move a stock. This may give you any number of trading ideas, or explain why a trade your are in is reacting the way it is. There are a number links at www.TraderAide.com that you will also want to bookmark and keep close. The NASDAQ page, for instance, has the pre-market and during market Radar which tells you what stocks are moving in real time. I find this extremely valuable in pre-market trading. The NASDAQ page also has halted stocks information, a daily calendar of economic events, Market Maker lists, and a plethora of other data. In addition, at TradeAide.com you will find links to many other sites that can be very helpful during the trading day. You will also find a link on how to set your Stochastic chart which will include a daily candlestick chart and a volume overlay. It is not the goal of TraderAide.com to give you a link to every site on the net that deals with the markets, only ones that will help you make money on a daily basis. When you are setting up your data feed/quotes, keep it simple. A couple of market maker/level II windows are all you need, with the ticker (time of sales). You need a stochastic chart, a daily (one year) candlestick chart for price history and your news feed. You can open up a multitude of other screens and studies inside your data/quote feed, but too much information is just that, too much information. Remember KISS! Happy trading! No permission is needed to reproduce an unedited copy of this article as long the About The Author tag is left in tact and hot links included. Questions and comments can be sent to Floyd at floyd@TraderAide.com. Floyd Snyder has been trading and investing in the stock market for three decades. He was on the forefront of the day trading craze that swept the nation back in the late 1990's, both as a trader and as the moderator of one of the Internet's largest real time trading rooms, http://Daytraders.com. He is the owner of http://www.TraderAide.com and Strictly Business Magazine at http://www.sbmag.org |
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Books: Recommended Reading |
| TraderAide.com The Trader's Assistant |
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| S&S Enterprises Web Sites: EducationResourcesNetwork.com | Strictly Business Magazine | FrameHouseGallery.com | |
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| The Bull Market by Will Bullas Paper 15"x14" Image 16"x20" Open Edition Poster Release Price $27.30 TraderAide.com Price $20.00 |
| The Bear Market by Will Bullas Paper 15"x14" Image 16"x20" Open Edition Poster Release Price $27.30 TraderAide.com Price $20.00 |
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| The MasterTrader eBook Your complete guide to active trading/day trading. Learn proven strategies and make money consistently! |
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