Internet Day Trading – Tips for Getting Started

Hardware

You will need a computer that is separate from other business or personal activities. Get the best CPU, Motherboard, and RAM you can afford. Get a video card that supports multiple monitors, preferably at least four. Currently, NVIDIA makes great multi monitor video cards. If you want a turn key solution, try http://www.digitaltigers.com.

Security

ESET makes the least intrusive and bug free anti-virus program that I have used. If you can, keep this computer free of downloads, emails, and third party programs. Keep it clean. Don’t let Windows remember user names or passwords. Use a router for your firewall, not windows.

Internet Connection

Cable is the only way to go. I’ve tried them all. If you skimp, you will pay. Get the best service available for your home or office. If cable is unavailable, consider swing or position trading.

Trading Platforms and System Maintenance

Direct Access is the only choice here. I can recommend TradeStation, eSignal, or Interactive Brokers. Once your trading platform software is set up the way you like, back it up onto a thumb drive regularly.

Clear your cache, run Defrag, and Clean Disk regularly to keep things humming. Set restore points just in case. Better yet, clone your hard drive with Acronis True Image or something similar. Do this while everything is running perfectly. This way you won’t suffer any down time, having to set up your trading platform from scratch.

Personally, I like to disable Windows automatic updates. This has saved me many headaches. Let ESET anti virus and the router firewall take care of security. Keep your system clean, no downloads.

Capital

Minimum amount required to day trade is $25,000. Any amount less, you will be in the category of “Non-Pattern” trading which is a pain in the neck if you need to close positions within the same day you opened them. If you want to make a living, $200,000 is a realistic amount to start with. If your ROI is 25%, which is respectable for a budding day trader, you can at least pay yourself a salary.

Platform Set Up

Set up your Order Entry, Level II, and Time & Sales in one corner. Next to this area, set up Watch Lists for buys, sells, and sectors. Set up 5 charts for multiple time frames: 5 minute, 15 minute, 1 hour, daily, and weekly. Link everything together: Order Entry, Level II, Time and sales, Watch Lists and Charts.

Set up three additional charts for monitoring major market induces: Dow futures, S&P futures, NASDAQ futures, Russell 2000, Bonds, Currencies, and Commodities. Put these in there own watch list linked to these three charts. Choose three time frames, such as 5 min, 15 min, and hourly. Put the 5 min TICK and TRIN in another corner. Finally, set up charts for other important market indicators such as the VIX and Put/Call Ratio. Use candlestick charts with black backgrounds. They are much easier on the eyes.