Technology for Day Trading

Due to their low cost, most recently released computers can handle the demands of day trading. The components of your day trading system, including hardware, software, an Internet connection, and security, are briefly discussed here.

Day-trading hardware

Two displays are connected to the same trading computer, as is standard practice. The day trader can make use of both screens as though they were a single large rectangle. Thus, the day trader is able to view more charts and market data at once. Although I lack a terminal degree in computer science, I have utilized computers for day trading and assisted others in setting them up. Following the minimum general requirements for day traders are the recommended requirements (in parentheses):

700 MHz Pentium III or higher (Pentium 4 recommended)
RAM of at least 512 MB, preferably 1 GB or more
Version XP of Windows
One CRT display measuring at least 21 inches (two LCD displays measuring at least 19 inches each, ideally)

If you wish to use two monitors, you'll need two separate video cards (one for each monitor) or (preferably) a multi-head video card (from a company like ATI, Matrox, or Apian) that supports multiple displays. If you're not a computer specialist, it's best to have the seller set up the system the way you want it (turnkey). Many of the hardware and software features discussed on this page are optional if you choose to employ the trading robot.

Day Trading Application

A reliable day trading system must first and foremost feature high-quality software. In my opinion, RealTick is the most effective stock trading program available today. Currency trading does not require such complex computer programs. Every professional day trader today makes use of specialized trading software. Day traders use this program to evaluate stocks or currencies and place buy and sell orders on the trading computer described above. The trading software is the backbone of any day trading system; hence, its popularity and acceptance among traders are crucial. The following features should be present in the stock trading program:

A complete inventory of market purchase and sell orders (Level II).
Time and Sales (complete accounting of all business)\
Continuously updated streaming quotations and graphs in sync with current market conditions.
Monitor for Investments
News in the moment
The program has an integrated order taker.

RealTick is the greatest program I've used in this area. Your broker (a direct-access broker on the RealTick platform) will provide you with this when you open a trading account with them. Day trading currencies (forex trading) does not require the aforementioned capabilities. Both a standalone and a Java version of forex trading software are available. The one I use is quite simple to pick up. Follow this link to try out the trading system I use in a simulated environment for 30 days.

Access to the Internet

For day trading to be successful, a high-speed Internet connection is required. DSL and cable modem services are now widely available and cost-effective. The most powerful computer money can buy is useless if it can't keep up with the constant stream of data required by day trading software. This includes quotes, charts, transaction details, and more. Because of this, a 56-Kbps standard phone line modem is not a good choice for a primary Internet connection (unless possibly in exceptional circumstances). Advice (if any is available):

Phone business DSL (Digital Subscriber Line) service, or

The cable company's cable modem service

I've been using DSL (specifically, BellSouth's DSL) for a while now, and it's fantastic. Compared to a 56-K modem, DSL is lightning fast. While I have never personally used cable modem service, I am aware that many traders use it and that it is both popular and very quick. DSL service can be ordered over the phone for around $50 monthly, but it can take up to two weeks for the provider to ship you the necessary equipment and software. Trading in the broker's office, using one of the high-speed computers that are already set up there, is always an option if you do not have DSL or cable modem service in your area.

Safeguarding the System

Having an anti-virus program installed will keep your trading platform safe from malicious software. The Anti-Virus Software: Almost any news source you turn to today will have a report about a new computer virus that is wreaking havoc somewhere in the world. These days, it's the norm to do so. Viruses have been a major problem in recent years, affecting millions of computers worldwide. Whenever a user opens an infected file, the virus might spread throughout the system. The most common method of acquiring these is via email attachment. If a virus wipes out your computer's data, you'll be unable to transact business. You can protect yourself from this by installing an antivirus program on your computer. You can use the free virus scanners at your own risk, but they are available. One of these two programs is likely pre-installed on your computer.

A firewall will prevent hackers from gaining access to your trading machine. High-speed Internet connections (such as DSL or cable modems) leave users open to ""hacking"" unless they have a firewall in place. When someone breaks into your computer from another computer, they are said to have "hacked" it. Once the hacker has taken control of your trading system, they can easily snoop on you or wipe all of your data. For a trader, this might be a devastating blow. Traders can protect themselves from this threat by installing a ""firewall."" A firewall prevents hackers from gaining access to your trading computer. A firewall can be an added piece of hardware or software on a computer. A software firewall is the simplest to implement. Numerous businesses offer free versions of their firewall software, and the market is flooded with options for purchasing it. Visit Steve Gibson's website, www.grc.com, and navigate to the Shield's Up area for more information on firewalls.

The day-trading computer isn't complete without a solid back-end system. A UPS (or, in the worst-case scenario, a surge suppressor) can offer backup power during blackouts and reduce voltage spikes, while a 56-K modem can act as a backup for the high-speed Internet connection. Safety Net: A backup system is unnecessary in an ideal world, but unfortunately, we do not live in an ideal world. When trading, the most crucial sources of backup are:

a 56k modem in case your cable or DSL internet goes down.

Backup power sources in case of blackouts and voltage spikes

There have been rare occasions where the DSL has failed me while trading, but they have occurred. The same is true of cable modem service disruptions. In the event that your broadband connection goes down, you can still use your standard 56-Kbps modem through your ordinary phone line. Although the 56-K connection is not as fast as a high-speed one, it is sufficient for placing trades and viewing the most fundamental trading data. RealTick's flexible configuration options make it ideal for these kinds of situations; the currency trading platform is fully functional even when connected through a 56-K modem.

In the event of a power outage, a UPS will keep your trading computer operational. While the UPS's limited power means you can't keep working endlessly, you can at least save your work and remove any unnecessary tabs or windows before it goes dark. Your trading computer will be safe from damaging power spikes with the help of a UPS. If you're just starting out in trading and don't want to spend the money on a UPS right away, that's fine; however, you should invest in a surge suppressor (which can be purchased for anywhere from $20 to $50) to protect your trading computer from sudden spikes in voltage that could potentially damage or shorten the life of your trading equipment.