Everyone wants a shortcut to learn day trading or any other kind of short term trading – someone to teach them the secret sauce that will take 10-20 years of experience and allow them to come up to speed in a few months. If you needed brain surgery, would you want the guy who got his degree online in 6 months OR the guy who spent 10+ years in med school + residency + specialization? Is that even a fair question?? Well, it's lucky for everyone that trading is far harder than brain surgery … not really but it can seem like it. In reality there are some easy things everyone can do to dramatically increase the chances of winning and decrease the learning curve - but do not expect a single, easy secret that will solve all the issues and make it easy. That knowledge is learned. The one huge key to the path of winning is simply to do things that will not cause you to lose money.
First off, you really need to treat day trading as a profession. This means act like its a real job and your only way to make money. You will need a dedicated computer for trading only, with 2 monitors - a single monitor cannot show enough data. Do not try to use some 5 year old computer that is underpowered. I can assure you that computer will fall behind of the task. You do not want lagging data, there is nothing worse as a trader - this will cause you to lose money. Trading is super data intensive, make sure you have a computer with at least the following specs:
1. A minimum dual core chip, ideally you want a quad core chip. Each core on the chip can run a separate application, and this really lessens the chance the computer will stall out. Make sure the chip has a decent amount of L2 cache. If you dont know what this is, ask a local computer nerd, they will help you.
2. A minimum of 2gb memory, the more the better. If you want more than 4gb you will have to use a 64 bit operating system. Before you take this step, make sure whatever software you are using is fully compatible. You should be able to get by with 2-4gb fine. The faster the memory the better, but no need to really pay up for special memory.
3. An add on graphics card from Nvidia OR AMD. Make sure the card can handle at least 2 monitors. You do not need a high end gaming card, you should be able to get something decent for about 100-150 bucks easy. Do not use thebuilt in graphics on the motherboard - they are really cheaply made and are underpowered. Trading is extremely graphics intensive - think about real time charting, indicators, order entry, bid ask in real time etc - it adds up.
You will only need this on your main computer that will be traded on and used for charting. You want 1 dedicated screen for order entry and 1 screen for charting. If you have any other computers that are older, those are totally fine for surfing the net, getting news, IM chat and other stuff. Once your trading computer is setup, you should keep it uncluttered with other applications - install those on another computer. You do not want it to crash or lock up during trading hours.
Just like a real office, you need a dedicated space that will serve as your trading center and workplace. It should be setup like you would a desk in an office - phone, light, supplies, computers etc. Remember to succeed, you really have to treat learning trading as a real business, not some kind of hobby. A hobby is fine, but you cannot expect to become an expert unless you treat it seriously. When you are concentrating on trading, do not let outside influences distract you. This means chatting on the phone to friends, watching tv shows, and doing other things while kind of watching the market. If this type of behavior would not be acceptible in a normal office, it will not cut it for trading either.
Once your office is setup, you really need to get serious about learning how the market works. The internet and free blogs are a great source of information, but you should not expect to learn everything online. Go to amazon.com.or other sites like Trader's Galleria - search for the term "charts" or "stock charts". You want a beginning book and an advanced book on charting. To learn to trade you have to understand the mechanics of how price moves, which means you have to learn to be an expert at charting. This can and will take some amount of time, and is not easy. As you get better at it through practice, it is much easier to learn new ideas and concepts because you have the background to understand them.
Expect learning charts to take about a year to get good, but in a month or 2 you can get a good start. Again, do not fall into the trap of thinking if I throw some money at this, someone will show me secrets and shortcuts. If you don't have the foundation to understand what is going on, no amount of shortcuts will fix that since you dont understand the underpinnings of how stuff works. One word of caution - do not attend any seminars until you have at least mastered basic charting - your money and time will be wasted. When you think you are ready for the advanced book, then you can consider attending a seminar to learn more. Again here there is no substitute for experience. Every day you have to plan time to watch the markets live, even if its just for an hour or two - ideally for the whole day if possible.
You really need to watch it live AND go over static charts after the market has closed. If your time is impacted because you have another full time job and cannot watch the market here is a secret: Get some screen capture video software (records your screen to video) and an external usb hard drive, probably 500gb will do. Set up a real time chart of the market and a few stocks on your screen before you leave for work. Set up the recording software to save to the external usb hard drive. You can set up a macro (there are free programs out there that can do this, search Google) if you are not home when the market opens. Set i to record at least an hour of video of the market open and any charts you have open. At night you can then replay this recording in real time (or even speed up time) and watch for chart patterns to learn from. If this does not appeal to you, some of the brokerage firms or data vendors have market replay that can replay parts of the prior day for you.
I have not touched on one last thing - charting software. There are tons of them out there. I have my own preferences I like, but that hardly matters. You need to find what you are comfortable with. Some programs are very complicated, some are simple to use, and yet others will let you code custom indicators and trading systems. From the start, I would suggest that most people go with simple. What good is having 500 things you have no clue what they do or how they work?? All that does is confuse more and add things you are not ready to use. Just make sure its a fully robust charting package – meaning all charts are live, you can put tick charts AND minute based charts up (not delayed data, live data) AND its not web based. Web based means the program is running in a browser, rather than running as a separate executable. For the most part, you always want a standalone, executable program - they are far faster and speed is money. You do not want web based order entry (browser) for active trading, its just too slow - you need real time profit and loss and the ability to watch positions in real time. It is too slow in general to be of any use. Web based is totally fine for buy and hold, longer term investing. Winning at trading is about time, even 5 seconds delay can cost you 50c or more per share in lost profit if the market is moving fast. That is a real cost and can cause you to turn what would be a winning trade into a losing trade.
While this was not a tutorial on how to trade, I tried to touch on a few subjects often overlooked when people are trying to learn to trade. They overlook these because they either cost money (charting software, real time data, computers) or they think they take too much time so lets find a way to skip this or that part.
As in every business I know, there are some fixed, monthly costs that are a part of doing business. If you are a trader, data costs and charting package costs are one of many. Often you can get them minimized or waived if you are active, but for probably the first year expect to pay for them as you are learning.