If you are looking to day trade stocks, futures or other commodities, you need to have the right trading tools, especially the right home setup.  This includes trading with the best computer to meet your needs, investing in a reliable and robust charting software, and having a means to place trades through an online broker. 

After the reading this article, you will be armed with the knowledge to prepare yourself with the right tools to trade successfully.

First off, you need a computer that can handle the demands of running both a real-time charting software and brokerage platform.  This is not the place to skimp, but you don’t need the fanciest computer either. 

Most computers these days can do the job effectively.  What you do need is fast processing speed and large amounts of RAM.  In fact, since you will be running multiple programs simultaneously, invest in RAM. 

It used to be that only desktop computers could handle the requirements of charting software and brokerage platforms, but this is no longer the case. Laptop computers are just as powerful as desktop computers.  Where they may be lacking is in comfort. 

If you’re going to stare at a screen for the 6-hour trading day, you’ll probably want a larger more luxurious screen than your laptop will provide.  In addition, many traders favor having multiple monitors, especially if they’re looking at multiple markets or time frames simultaneously. 

One other peripheral I would recommend is a power backup.  Every trader has experienced being in a trade when your charts go down or during a power outage.  It can be scary to say the least.  Having a backup power supply will ease these concerns tremendously.

Speaking of charting packages, you want to choose one that gives you real-time charts as opposed to end-of-day.  End-of-day charts are useless to the day trader.  Also, when choosing a charting platform, look for length of time in business and a large user base. 

In addition, it also helps to have the ability to code entries and exits in the software and to backtest trading strategies, as well as replay trading days.  This way, you can practice your trading in your off-hours, after the trading day has passed. 

Major charting software packages, not listed in any preferred order, are TradeStation, eSignal, Market Delta, Investor/RT, Ninjatrader and Ensign.  Do your research before investing in one of these though.  Most charting programs offer a free trial.  Take advantage of it.

Whereas you can actually place trades within some charting packages, most traders also use a separate online trading platform to enter and exit trades.  These platforms are usually provided by the broker with whom you choose to do business.  Your broker may have more than one platform from which to choose, so again, research your options. 

It is essential to your trading business that you have the right tools to ensure your success.  Choose a computer with a fast processor, invest in additional RAM, and if you can, a power generator and additional monitors.  Choose a charting package that is well-used by many and that offers you the ability to adapt itself to your style.  And familiarize yourself with the various online trade entry platforms that are available. 

Carefully learn your business and invest in the right tools, and you too can make a living as a day trader.

We soon learn that winning the lottery or having a great job fall into our laps are foolish expectations to build a life strategy around, but the realization of a truth does not necessarily guarantee that we will be mindful of it when a new activity comes along.  Many newcomers to currency trading have learned this lesson the hard way by failing in the first three months of trading, but every successful trader understands that managing expectations is at the heart of his disciplined approach to the market.

Managing expectations is part of the psychology of trading, a new discipline that has received much attention in the past two decades.  Self-awareness is key to understanding how we view the forex market and how we interact with it.  Expectations can apply to each of these phases and should be addressed up front:

• Your Self Image:  Are you really cut out to be a forex trader?  A number of points may contribute to answering this question.  If you are losing sleep at night due to the intensity required or the necessity of accepting losses as part of forex reality, then perhaps your approach needs a review.  You do not have to be a “scalping” day-trading expert to win in online forex.  Adjust your timeframe approach to a “swing trading” genre to ease the tension a bit and see how you fare.  Trading is also about discipline and following a set of rules to the letter.  If your free spirit would rather not be so encumbered, then once again, trading may not match up with your personality type.  If you feel comfortable with your trading style, then confirmation is always a good thing to have;
• The Forex Market:  The forex market is all about establishing equity in exchange rate pricing, not selling a product or commodity.  As a retail forex trader, you are engaged in speculation, plain and simple.  Intrinsic value is nowhere to be found.  Relative value is the name of the game, and no single trader has the resources available to outguess the market.  You must ride the waves, gauge momentum, and rely on your technical tools.  Losing trades will be plentiful.  They are to be expected and accepted.  Recent published statistics suggest that there are three losing trades for every winner!  Experts may have a better track record than the average, but they, too, must manage expectations in this area.  The Rule is simple – cut your losers early, and let your winners run.  One good winning trade will nearly always offset three small losing ones, if you manage the value of your losses in a tight fashion;
• Forex Trading:  The act of trading must be very disciplined, according to a step-by-step trading plan that incorporates prudent risk management techniques.  Instincts based on knowledge and experience may guide your effort, but shooting from the hip with no stop-loss orders in place is a recipe for disaster.  Sooner or later, you may find yourself shooting at a tank with no opportunity for a return volley.  Never risk capital in forex trading that you cannot afford to lose and follow the “2%/6%” rule for money management.  You should never put more than “2%” of your forex account balance at risk in one position, nor should you have more than three such positions, “6%”, open at any one time.

thanks,
John