In every business undertaking, equipment is essential. That being said, day trading is no exception. As you are searching for day trading equipment, I suppose you are familiar with the server farms that automated trading firms in Connecticut and New York use. Keep reading, and you will learn about all the basics regarding the equipment you’ll need to start day trading.
How to Get Started with Day Trading?
Apart from a good technique or approach to day trading, you will need the following things:
Profiting from extremely fast moves at times is what makes day trading. You will sometimes find yourself in a trade for less than 10 seconds. So, you will need a day trading computer with a fast processor. It has to be able to handle the speed at which you need to act. Consider at least a Pentium 4 with a minimum of 40 GB hard drive and 1 GB of RAM.
Note that buying a dual-core processor doesn’t have to mean that your computer will work faster. If your trading application doesn’t support dual-core processors, you can’t really make the most of them. An AMD dual-core processor that runs at 2 GHz won’t help with Tradestation. That is because Tradestation hasn’t been designed to take advantage of dual-core processors yet. Thus, you would be better off with a single core processor in this case. Make sure that you understand how your trading platform functions before you go computer shopping.
Don’t forget to use a surge protector to keep your equipment safe!
Some people enjoy having multiple monitors, as that allows them to track different stocks and technical indicators simultaneously. But, it is just a personal preference. Some traders need a dozen of monitors while others simply use a laptop. If you want a multi-monitor setup for your day trading computer, you will have to buy a video card as well. You need the card because it allows multiple monitor setup. Matrox and ATI offer solid video cards that cost between $250 and $500. Be sure to do your research and check eBay prices too. You can get great discounts online.
Try browsing numerous websites (for example, digital tigers) to learn what you actually need. You don’t have to necessarily buy from them, but you can make the most of their content. Find a fully functional setup online, and it will give you a piece of mind. However, keep in mind that these setups are rather pricey.
Finally, your monitors should have good resolution. Also, it is a good idea to keep the brightness low in order to preserve your eyes. If you set your monitor up properly, you won’t have any trouble in the future. Take your time and avoid a potential headache in the long run.
You will need a cable modem connection at least. Since trading is extremely fast, your data has to be even faster. In this case, more is more. Verizon’s FIOS has the best connection with the highest speed. However, not everyone can get it at the moment.
Here are some golden rules to follow regarding internet connection:
- No Library Trading – These networks aren’t secure enough, and they often go down.
- No Starbucks – Coffee shops are great for enjoying your coffee, but don’t show everyone what a cool trader you are. People will comment and ask you numerous questions.
- No 3G – 3G is for smartphones and kids playing games. A trading professional shouldn’t use 3G; your connection speed should be at a decent level.
With day trading, a real-time data feed is required. So, you will have to buy a real-time subscription from your broker. Be aware that whenever you require a real-time data from exchanges, you will have to pay an additional fee. Also, to view the Level 2 information, you will have to pay another additional fee. A real-time news feed is expensive; prepare to pay around $100 a month for it.
Every trader dreads of his computer crashing while he is trading. So, it is vital that you have a backup laptop or PC which will have an appropriate trading software installed. This way, you can easily switch setups if your day trading computer fails you.
It is equally important to have an internet connection backup. Unfortunately, internet connections sometimes go down. If that happens in the middle of a trading session, it’s even worse. Bad internet connection could cost you a lot. A serious day trader should have the option of a dual internet connection. You should be able to instantly switch between two connections in the case of a network failure. It’s better to be safe than sorry.
Keep the software on your trading computer to a minimum. Your system resources shouldn’t be taken up by a third party software that has no relations to trading. It is enough to have a trading software, MS Office, and an anti-virus software. You won’t really need anything else.
Think carefully about your day trading command center, and treat it with respect. Your computer shouldn’t lock up at 9:30 breakout when the time and sales window goes crazy. Also, switching between multiple windows and screens might be too much for a laptop. Don’t try to save money on your equipment. You have to spend more at the beginning in order to have a shot at success.