Getting started day trading isn't very complicated. Some say that it takes a lot of money and others say only a specific type of person can day trade. I say anyone can day trade as long as you have a certain number of tools to get started. The most important thing you need to get started is your sanity. There are only a select number of people that I have met in my roughly 10 year career in the industry that are able to trade effectively when they don't have the proper mindset.
Day Trading is as much about having physical tools as much as you have mental tools. In this post I'm going to be talking about the physical tools that you need to get started day trading. Here are the five things you need to get started day trading.
- A Reliable Internet Connection
- Charting Software
- A Broker
- A Trading Strategy
- An Easy Market To Learn
To get started day trading you don't need the latest and most powerful computer on the planet. It doesn't have to make your coffee in the morning, power NASA, or even have fancy lights. All you need is a basic computer that is roughly 2 or 3 years old. You need windows software in order to run most charting platforms, if you plan on using an Apple computer make sure that it can run windows.
Click here for exact specifications on what I recommend
A Reliable Internet Connection
The keywords are in the title, reliable. You don't need the fastest internet connection, the most important thing when it comes to day trading is that you need a constant reliable connection and a decent speed. You can't day trade on a dial up internet connection, a DSL or cable connection is just right.
Click here to learn more about Internet requirements for day trading
There are a few main players in this market but what it really depends on is what kind of instruments you are trading. If you are trading stocks there are dozens of big name players like Scottrade and many massive brokerage firms. If you are trading futures the main players are Tradestation and Ninja Trader. The list goes on and on, the most important thing about choosing a charting software are the following
- Easy to use
- Real-Time Data
When you first start day trading you don't realize that choosing a broker is one of the most important things that you can do. There is always a cat and mouse game with the cost of commissions and day traders. To write checks you need a checking out and to day trade in the stock market you need a brokerage account with a broker. Generally, the more you trade the cheaper your commissions will be.
- Try to go with a large company or at least a company that is well known
- Don't jump with your first choice - look at your options and check out a few firms
- Ask questions - look for forums and ask other traders their opinions
- Price of Commissions - You want to try and find the cheapest commission possible
A Trading Strategy
Lives have been lost and made in the stock market since day trading began years ago. Understand that only 10%-15% of day traders make money. If you want to be part of that small group you want to make sure that you have a strategy that works and is effective to the ever changing dynamic of the stock market. You don't need 20 fancy screens and the latest computer to win. You need a strategy that works.
Make sure that when you choose a strategy that it makes sense. There are tons of companies out there with salesman that will tell you that they are day traders and the strategy works. If they are making so much money in the stock market why are they trying to sell you a strategy?
The bad references are the most important
Ask for a range references, both good and bad references to gauge whether the company is reputable. You want to hear from the 85%-90% of the population that isn't making money, not only from the people who have been succesful with the startegy.
Click here to see my day trading strategy
An Easy Market To Learn
You don't want to start day trading by getting yourself into something that you can't handle. Whether you decide to trade stocks or even futures make sure to choose a market that is easy to learn on. The easier the market the better it will be for your training and your new lifestyle.
Click here to see why you should start on the E-mini S&P 500