Day trading is one of the most thrilling ways to make money in the stock market. It takes someone with a particular set of skills to be a successful day trader, and even if you are a seasoned veteran, it also takes certain tools.
A Platform for Trading
Modern-day trading is now done online like most everything else. There are many different online platforms, and there are software systems that will allow you to day trade from your office or from the comfort of your own home. You’ll need a computer with enough memory and a fast processor, so you don’t get any lag time when you need to make a quick trade.
You’ll also need software that allows you to pull up price charts and that will also allow you to see tick charge and timed charts. Make sure the software you use allows for quick trading.
A Broker
A good day trader needs a good broker. There are dozens of brokerage accounts available, so it is important to find one that works for you and one that works quickly. If your broker doesn’t fill your order immediately, you could lose money.
Since day traders make many trades throughout the day, it is also essential to find a broker that provides low commissions. Look for a small, regulated brokerage firm that uses software you like.
News Feeds
Day traders need to keep their eye on the news and on events that can affect the market. You will need constant access to data and indicators, so you can measure stock performance and find potential opportunities. Set up your day trading workspace with more than one monitor, so you can watch the news and watch the markets at the same time.
Intraday Charts
Most day trading strategies use intraday charts to see price action for short time intervals. There are charts that include 5-minute, 15-minute, and 60-minute time intervals. In addition, there are data-based charts that allow traders to see the price action from several different data intervals instead of the time. Some of the data-based charts include volume, tick, and range, and they will print a bar at the end of a specified data interval.
Indicators
There are several different types of indicators day traders need in order to find opportunities. Each indicator has different theories, and they fall into four categories, including momentum, trend, volume, and volatility.
While technical indicators won’t provide a guaranteed profit, they can help point you in the right direction in many cases. This type of tool can often point out something that is not obvious, save you time in your market analysis, and even help you find a trade idea. All the technical indicators use a mathematical formula, so you don’t need to do the calculations.
These are just a few of the tools a successful day trader needs. It is also important to have a good setup, whether it is at your office or at home where you have fast internet access, and even a backup internet plan.
