Day trading for a living requires an investment in a few essential tools of the trade that will help you get your career off the ground. All day traders need:
- A Reliable Workstation: Day traders need a fast, reliable computer with a connection to high-speed Internet. Many day traders prefer to have multiple screens to effectively multi-task throughout the trading day, but this isn’t absolutely required. Day traders should also make sure that they have mobile phone service or access to a landline where they are located, in case of a computer problem or Internet outage.
- A Day Trading Brokerage Account: Most day traders utilize direct access brokers that allow you to interact directly with the exchanges and markets. Many brokerages also provide real-time market data to their traders. Be advised that there is a wide variety of options when choosing a brokerage firm. Some have low commission structures, others are very Internet specific, and some are best suited for trading in specific markets. We recommend 101investing.com a leading global broker that provides an advanced & secure trading platform for trading financial assets.
- Analytical Software: All day trading brokerage firms provide traders with trading software, but some traders prefer to use third party software that interfaces with their brokerage because of a particular feature or ease of use reasons. Some features that traders typically rely on to execute their strategies are:
- Automatic Pattern Recognition. This type of trading program is designed to identify technical indicators such as flags, channels, or even Elliot Wave patterns.
- Genetic and neural applications. These programs use genetic algorithms and neural networks to execute trading systems and make better predictions of future market trends.
- Broker integration. Some programs directly interact with the brokerage firm, allowing for instant or automated trade execution.
- Back testing. This enables traders to test a strategy with past performance as a way to see how a strategy will perform in the future.
- Multiple News Sources. All day traders have one eye on the news throughout the day. News provides opportunities for day traders, so it’s important to be among the first to know when a story breaks. Traders stay on top of the news through Dow Jones Newswire, CNBC and other cable news outlets, and websites and software that aggregate the stories of the day.