You’ve saved up some money in your bank account, read a few books, countless online articles and spent hours developing a trading strategy. You are all ready to jump into the world of day trading. The last thing you need to do is set up your trading station. When many people think of a day trader’s work station, they imagine a huge desk filled with large computer screens all showing different charts.
However, a growing number of traders these days prefer to work on the go, and use nothing but a laptop. In this article, we will go over some of the tools that will help you be a successful trader, regardless of which approach you use.
1) Good Computer(s)
The first thing any trader needs is a good computer (or a few good computers) with a high-speed internet connection. Contrary to the stereotypical vision of a trader surrounded by six or seven monitors, you can certainly be successful with just one screen. As long as you are well prepared with a strong, simple strategy and a few of your favorite tools, one computer is enough. But if you find that you like to look at many different charts simultaneously and you want multiple screens at your desk, then by all means, do what works for you. There is no one right way, and everyone has their own process.
2) Online Broker
Next you will need to sign up with an online broker to process your trades. There are many factors to consider including commissions, trading platforms, research tools, and customer service. The brokers all offer different experiences, you should try to find one that has a balance of services that best suits your needs. For a great breakdown and ranking of the best online stock brokers, refer to our recent post. If you are interested in futures trading, check out this post instead.
3) Price Charts
Once you’re all set up with a broker, you will need to find the charts that you will use. The key here is simplicity and having everything you need in one place. There is no need to pay for price charts; you can find perfectly good free charts at websites like https://tradingview.com and https://stockcharts.com. Both of these sites have charts for all different asset classes, and the graphics are clean, simple, and easy to read.
Trading View’s charts are fully integrated into the BetterTrader app.
4) Economic Calendar
All traders should be aware of major economic events that could impact the assets they are tracking. In particular, it is crucial for forex traders to always know what is going on in the world in order to make productive trades, and prevent major losses. A simple economic calendar is one of the most useful tools that every trader should be checking on a regular basis. You can find a great calendar included in the BetterTrader app, which has every significant market-moving event, and also allows you to set up convenient notifications to always stay ahead of the game. Economic Event Calendar is definitely one of the essential tools in your trading kit.
5) Stock Screener
Stock screening tools are great for finding certain stocks that you want to focus on. The free screener at https://finviz.com allows you to search using various criteria to find stocks that you are interested in. The website also provides a really cool heat map which tracks the frequency of trades among different markets and asset classes in real time.
6) Strategy Backtester
When developing a new trading strategy, backtesting tools can be extremely useful, and can possibly protect you from huge losses that can occur when experimenting with real money. A great, free backtester can be found at https://www.profitspi.com/stock/view.aspx; a fantastic way to hone your strategy before taking it into the real market. Back-testing tools are absolutely one of the essential tools in your trading kit
BetterTrader integrates advanced statistical backtesting into its trade suggestions, optimizing the accuracy of its market predictions following economic events.
7) Reliable News Source
It seems simple, but having a reliable news source that reports news as quickly as possible can make a huge difference in your trading. Most traders get their news from Bloomberg, CNBC, and Wall Street Journal’s MarketWatch. Bloomberg is a great option thanks to its great combination of television news, online resources, and mobile apps, but other media outlets can be very useful as well. Use whichever one that you are most comfortable with, but make sure that you have at least one reliable source, if not more.
8) Market Sentiment Indicator
A sentiment indicator can be another good tool to help with your trading decisions. This tool shows the general direction that the market for a particular asset is moving. It will tell you the proportion of investors that are holding long and short positions for each asset. Although on its own, this is not a perfect way to predict price moves, it is still useful, and can help you to better see a picture of the market as a whole.
9) Volatility Calculator
The volatility calculator can be a helpful tool when trying to identify assets that you want to focus on closely. It allows you to measure the volatility of anything you might want to trade, over any given time period. Whether you are looking for a highly volatile market to generate high returns, or you want to avoid the dangers of high volatility, you can use a volatility calculator to find a suitable asset to trade.
Day trading is hard work, and can be very stressful, especially when you are just starting out. By using some of the tools listed here, you can make your life a lot easier, and hopefully make great profits!
We are BetterTrader, a financial analysis company who helps traders by running statistical models in real-time. We help you get an edge by predicting market reactions to events or price actions, based on market movements in similar situations. Interested in learning more about us? Check out the benefits of our platform or jump right in with our web app.