Ultimate Day trading tools guide.

Day trading is an intensive type of investing, and like any profession, its practitioners need to have appropriate skill sets to succeed. Have you ever heard of a handyman without his bag of tools or an electrician working without their protective gear? Me neither!

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Having the right set of tools is essential because they help you gain a tactical advantage. In day trading, you need to get the correct tools to process the heavy data coming in. Data is constantly in flow for day traders to process and analyze. The proper analysis leads to accurate risk assessment for realizing opportunities emerging in the markets.

Being aware of the best tools available and using them effectively means day trading with the best outcomes. The tools we recommend here are from a genuine review. We do not financially benefit from recommending them to our readers.

This article is an honest review on how to day trade.

The Basics

Everything nowadays is electronic and online. Day trading is no different. For day trading, you need access to the internet. Being online will give you access to the financial markets. Bear in mind; we are talking about full-time, reliable access. You do not want your laptop to crash or the internet connection to hiccup during a critical deal. You should also have a telephone handy in case you need to get in touch with your broker.

Computer or Laptop for Day Trading

Technology is constantly evolving, so you must ensure that whatever device you use to log onto the internet is fast enough to process heavy financial market tickers without lags or stalling. Most screening and charting software programs will also require a machine with solid processing powers. You will need to switch between company and broker sites and charting screens most of the time. Some traders opt to use two monitors. You are free to do so if it works for you. It all depends on what you are comfortable with and what set up your trading desk is friendly for.

Internet Access & Backup internet access

Since the usual trading process requires constant updating and monitoring of multiple pages, your internet should be fast enough to load pages quickly. A good internet service provider is essential for day trading. Broker pages, screening websites, and apps need significant data flow as they track your trades. This creates a strong appetite for internet data. If your internet doesn't keep up with this data flow, it will lag (slow down) and bring in old data. It's kind of like pouring a lot of water into a narrow straw, the trickle of water is slow, and water starts to accumulate at the mouth of the straw, waiting for its turn to get out. For you, this will mean that you may be seeing 5- or 10-minute old data. Try out different speed packages by the internet service provider and see which one helps run your trading software and web pages the smoothest.

Backup Internet Access

Even the best of service providers experience problems. Since we want to run things smoothly regardless of whether our internet provider has problems, make sure you have a flexible data plan with an alternative provider. Ideally, this should be a different provider than your primary provider. Usually, internet service providers face technical issues across their networks. Having your backup with an alternative service provider will help you avoid internet loss.

Day Trading Brokerage

A broker makes your trades by acting as a middleman in return for a fixed percentage amount. This is known as the brokerage commission or fee on your deals. As a day trader, you should look for a low fee broker as high commission rates can eat away a day’s trading gains. This does not mean that cheaper is the best in this case.

You should look for a broker that provides additional support if you run into any problems. Paying a little higher commission has its merits if the brokerage company can step in to help you save thousands of dollars if you have a technical breakdown and cannot exit your active deals.

Brokers also have their specialisation; while most banks have trading accounts for their clients, these are not designed for day trading demands. In addition, larger banks usually have a higher commission fee and a less accommodating fee structure. Smaller brokers specialising in day trading will have a more customised rate offering and commission packages for day traders.

This will not concern you anymore if you are based in the US as US-based brokers have opted to offer zero-commission trading since late 2019.

If you have a trading software preference, shortlist your broker on this basis. Most small brokers have different access levels to other markets. Whether you plan to trade in stocks, forex, futures, or options, or all of these, you may need to pick multiple brokers.

Timely Market Data

Day trading demands a steady flow of financial data. This comprises asset pricing and steady market updates. The data can be obtained from your broker, but you will need to specify which type of data you need. If you plan to trade in stocks, forex, futures, or options, or all of these, your output can be customised accordingly.

For instance, if you plan to trade in stocks, you need to determine and let your broker know which exchanges you will be tracking for your decision making. Whether you plan to follow the NASDAQ or some other stock exchange, you need to specify that and track information from the same market.

If you plan to trade in futures, you need to specify which contracts you will change to get the pricing information for such agreements. Many brokers charge you for the data you receive, so it makes sense to opt for the data that pertains to your preferred trading options. While some brokers offer all market data for free, their commissions are usually higher.

In forex trades, most brokers provide all currency pair data for free, so you will not need to be careful about what you pick and which data you receive.

Scanning software

Scanning Software

As traders, we can have all the theoretical awareness of trading the markets, but if we cannot find trades in real-time, we will never profit. Stock scanners help in identifying these setups. Before digitisation made them possible, traders would trade from a master watch list by going through manual charts, which took a long time.

Stock scanners help traders select the type of stocks they want to see. Complex scanners will be able to look for specific matches for chart movements, while simpler ones will pick up generic criteria like dividend issues.

My favourite scanners are listed below:

Trading View
Details

The Trading View site has a broad range of options with a clean design and structure, making it one of my favourites. It has a free option so that you can get a feel of the scanner before opting for a paid plan. The scanner offers real-time quotes streams and screening options based on multiple fundamental and technical trading requirements.

The trading view service has no limits on the watchlist you can create. It offers customisable screeners for stocks, crypto, and forex. The four tiers of plans range from free to $59.95 per month. The scanner has free mobile apps for Apple and Android platforms. It offers an alert feature and a 30-day free trial

Confimation button Pros
  • 12 types of custom chart types
  • Options for price indicators and custom alerts
  • Over 100 screening criteria based on both fundamental and technical trading requirements.
Cancel button Cons
  • Tiered plans make selecting the paid options difficult.
  • Real-time charting options not available in the free accounts
Trading View
Details

This is a one-stop shop for all things related to stocks. The platform is an all-purpose guide with robust charting and indicator variety. Its screening criteria and alert options are all great. The best for day traders is the detailed calendar suite which tracks upcoming markers like earnings reports, announcements, and other events to watch. All these come with a price tag attached. Its packages start from $ 99 and go up to $ 147, based on selected options and billing periods. The scanner offers a 14-day free trial

Confimation button Pros
  • It has a strong news feed based on real-time relays.
  • The Audio Squawk feature reads the headlines for users, letting them save time.
  • Instant desktop and email alerts
  • Monitor to track unusual trading activity
  • Research capabilities for multiple securities
Cancel button Cons
  • Most expensive solution on the list
  • Some options are too complex for traders beginning their trading careers.
Ziggma
Details

For rapid-fire, real-time updates, Ziggma is the go-to scanner for screener updates in stocks. The parameters are based on sliding scales and do not need to be entered manually and your preferred searches are updated continually.

The free version offers a great screening experience, but with $9.90 per month, Ziggma offers its one-of-a-kind stock scoring with subscores that evaluate for profitability based on growth, income, and financial strength for a strong screening experience. Ziggma also offers predesigned screens by Ziggmas in-house analysts’ teams.

Confimation button Pros
  • Quick and intuitive screener.
  • Most major search criteria are preselected.
  • Effective stock scoring for investors.
  • Most effective screeners are available for free.
Cancel button Cons
  • The premium subscription does not offer a free trial period.
  • No mobile apps are available.

Charting Software

Having strong charting software available makes the investing process much easier. Stock charts plot the price and volume history of stocks and help investors determine if the price is rising or falling. Stock charts are an integral part of assessing market trends and help predict movements effectively.

StockCharts.com
Details

This is the second most popular charting tool after TradingView. I prefer it because of its clean and straightforward interface and ease of use. The site is free to use and popular amongst financial bloggers, mainly because of its free and comprehensive tools for analyzing a stock’s current activity. If you need historical charting and in-depth analysis, you will have to get a paid subscription.

For investors who want historical charting and further analysis, they can upgrade to a paid subscription. The payments start from $ 14.95 per month to $39.95 per month. All plans come with a free one-month trial option.

Confimation button Pros
  • Amongst the first free charting sites and still, the easiest to use.
  • Easy to read and customise charts
Cancel button Cons
  • The site doesn't offer real-time data
  • There is no option for HTML 5 charting.
Yahoo Finance
Details

Yahoo Finance had an upgrade to its charting section in 2019. Since then, it has offered HTML 5 charts that are simple and very easy to use. The website is also excellent for quotes, research, and stock news. For important features like event overviews, users need to subscribe to Yahoo Finance’s Premium service for $34.99 per month.

Confimation button Pros
  • Well-designed charts that are easy to use and read
Cancel button Cons
  • All useful features like alerts and customised charts are based on subscription, and there is no service for free.
BigCharts.com
Details

This screener also offers comprehensive and easy-to-use investment research tools like charts, quotes, industry analysis, and intraday stock screeners. It also offers in-house commentary and market-based news.

Confimation button Pros
  • Well-designed charts that are easy to read
  • Free services
Cancel button Cons
  • Issues with loading news and share activities.

Conclusion

There is a lot of information to process when you start your day trading career. You will have to figure out which tools you want to use, and these can always be added to and changed as and when you want. Market analysis, when done thoroughly, will increase your profitability. It would make more sense to evaluate the options of screeners and scanners, and other tools available so that you select one that matches your needs and trading styles. There is no lack of options available.

Getting a solid laptop, reliable internet, reasonably priced broker, and scanning software may seem expensive but will help you in the long run.

Having the appropriate equipment and software helps you process the vast data available (and needed) for day trading. Picking the proper tools will help you process the information required to make effective trades.


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by Mark Benson

A stockbroker for 15 years and a keen follower of stock markets and financial news. Mark Benson has extensive knowledge about the national and international financial market. He has written for many popular websites in the past.

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