Chủ Nhật, 8 tháng 8, 2010

Day Trading Tools

As modern trading is electronic, the exchanges are run by computers, and are accessible via the Internet, so traders can work from almost anywhere in the world using only a few tools and services. Some of these tools are things like a computer, Internet access, and a telephone, so most people already have some of the tools that are needed for day trading. The remaining tools are services are specific to trading, such as a direct access brokerage, and real time market data, and these services are also available via the Internet.

Hardware and Software

The following tools are the hardware (such as a computer), software (such as charting software), and other physical items (such as a telephone) that are needed for day trading. Each item is described in detail, with an explanation of when and how the item is used during trading :

Services

The following tools are the services (such as Internet access) that are needed for day trading. Each service is described in detail, with an explanation of when and how the service is used during trading, and suggestions for where the service can be found : 

  • Modern day trading is performed via the Internet, so it requires fast and reliable Internet access. The recommended minimum specifications for day trading Internet access are as follows :
  • Connection Type : Broadband
  • Connection Speed : 256 Kbps
  • Traffic : Unlimited
  • Time : Unlimited
As long as these minimum specifications are met, any type of broadband Internet access will work, so ADSL, cable, wireless (Wifi), and bidirectional satellite, are all acceptable types of day trading Internet access.

     Backup Internet Access

Even the best Internet access has occasional problems, and day traders do not want to be disconnected from their markets in the middle of a trade, so backup Internet access is an essential day trading tool.
As backup Internet access is only used when the primary Internet access is unavailable, it does not need to be as fast or reliable, and can be either a 56 Kbps dial up, or a mobile phone with Internet access (GSM, GPRS, etc.). In order to provide the highest level of redundancy, backup Internet access should be as separate as possible from your primary Internet access, so a mobile phone with Internet access is one of the best options. 

Recommendations

Whether you are a new day trader, or an experienced day trader, I recommend that you use the following choices for the above mentioned tools :
  • Computer : A laptop computer, running Windows XP, with as large and high resolution screen, as possible
  • Internet Access : ADSL with at least 256 Kbps down, and 128 Kbps up, with unlimited traffic and connection time
  • Backup Internet Access : A mobile phone with full Internet access
  • Telephone : A mobile phone
  • Brokerage : Interactive Brokers
  • Trading Software : Trader Workstation, and Bracket Trader or VisualStation
  • Charting Software : Sierra Chart
  • Market Data : Interactive Brokers' market data
These choices will provide the basics that are needed to start day trading, while still allowing more experienced day traders to expand into multiple markets, advanced trading systems, and even automated trading, without changing their tools, and at no additional cost.

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