What You Need to Day Trade

When you start trading there are a few things that you will need in today's marketplace. The basics are a high speed internet connection, real-time quotes, a charting service, and a broker service or platform to execute your trades (electronically). You may also want subscribe to a service which will show you the depth of the market. Market depth shows at what prices other traders are bidding or offering outside of the current price and also shows the volume they are willing to trade. Market depth is a generic term, but is also commonly referred to as Level II quotes (NASDAQ market center) or Open Book (New York Stock Exchange).

Depending on the style of trading you are doing will determine the quality of real-time quotes you require. Most charting services now also offer quotes in addition to charts. The more actively, or more often you trade, the more reliable you will want your quote stream. Some companies experience frequently "lagging" quotes, meaning the prices seen by you is no longer the price available in the market. This can cause problems for traders as they will not know the price at which their market orders are being executed.

Since technical analysis is the main tool of short-term traders it is also important to have charts that provide all the tools for the trader's system to be implemented effectively and easily. Each charting services offers different technical tools and indicators. If you have already developed a trading system it is important to select a charting service that provides everything you will need to implement that system. All the analytical, research, screening and technical tools a services offers can generally be found on the companies website before you purchase or trial the product. Most charting services offer a free trial period in which you will be able to see how the charts and indicators perform in real-time before committing to subscribe to the service. During this time you will able to see how adaptable the software is to your trading style and plan.

If you do not have a trading plan or system and do not have time to come up with one, there are many services available which provide entry and exit signals for trades. These signals are sent to you for a fee via email or are posted on in the subscribers area of the site you are ordering the signals from. If you are going to pay for a service make sure they have a long history of profitable trading signals under real market conditions (not just back tested and optimized data). It is also important to note that if they do have a profitable record you need to follow the exact criteria the company dictates for entering and exiting your trades. If you don't follow the signals, or deviate from the system under which those signals are generated, you will not see the returns that are advertised.

There are many broker services and platforms for online trading, each with their own benefits. Many of these platforms will provide you with charting, real-time market depth quotes and possibly even trading signals. For day trading, or any trading method that requires active trading, it is important to keep the per transaction costs as low as possible. Choosing a broker is a broad topic, but remember to keep what you are paying for your orders in the context of how much you are making (or reasonable expect to make based on your trading plan). Price out if it is better to attain an online broker with no frills and cheap fees and then receive the tools needed from other vendors, or if paying a higher price for a broker that combines everything you need is worth it.

In summary, it is fairly easy to acquire the tools you need to trade, but a bit of research will be required. Make sure you are attaining services and tools that match up well with your trading style. There is not need to pay for excessive services if you have your own trading methods, and if you don't have your own methods find a signal provider you like and stick with them.