Guide to Day trading

This depends on how fast a trader could learn and implement the trading strategies. The correct answer to this question is, "When the day trader feels comfortable." We have seen people paper trade for months before day trading with real money. There have been others that have only paper traded a few short weeks. It all depends on the individual student. Paper trading is an essential step in a day trader's education and cannot be skipped. To learn how to trade correctly, the student needs to practice on a trading simulator. Though majority of trading practice should be done on faster-than-market simulators for obvious reasons, many forex trading firms now offer free demos of their trading platforms. These are a great learning tool for serious up-and-coming day traders.

Should I trade from home or from a trading room?

Please be careful with trading rooms. Even though it does feel good to trade with someone or a group of people side by side, this is not always a good thing. Many trading rooms charge a sit fee for the use of their trading stations and also make commissions from their day traders. These firms typically train customers to generate lots of trades with their "proprietary" strategies or techniques. Be very, very careful. When you trade with other people, there is also a tendency for a group to follow one or two day traders. This prevents an individual day trader from reaching the level of independence that he or she needs to trade successfully. Even though it might be difficult at the beginning to trade from home, we suggest that you stick with it. Get the proper day trading education and paper trade enough until you feel comfortable to trade live from home.

Is day trading with a laptop better than with a desktop?

Not really. Even though most laptops nowadays come with a video card that allows you to connect an extra monitor on the back, it is kind of awkward to be looking at the laptop screen and at a bigger screen beside it. If you already have a pretty modern laptop and you don't want to spend extra money on a day trading desktop computer, then something is better than nothing. At least get a separate monitor and connect it to the appropriate port on the back of the laptop. If you want to get a laptop regardless, make sure that the video card that it brings allows you to connect an extra monitor to one of the video ports. Try to get a laptop with as much RAM as possible (greater than 512 MB if possible).

Do I need more than one monitor?

No, but multiple monitors will make your day trading job a lot easier. If you are day trading stocks using a direct access broker and level II software, you will need at least two monitors - possibly even three. When you are trading currencies, on the other hand, you might get away with just one; possibly a 19" LCD (flat screen) or greater. The reason for this is that currencies are a lot simpler to trade, since you only have a few major currencies to deal with. The software for currency day trading is also a lot simpler than that for stocks. This makes it a lot easier on the budgets of day trader that don't have too much starting capital to begin with.

Do I need DSL or Cable Modem service?

Stock trading software requires a lot of data and statistics to be constantly delivered to your trading computer via the Internet. Consequently, you are better off getting broadband Internet service (DSL or Cable Modem) if you are planning to trade stocks. When the market is very active, stock day traders with a 56K connection typically experience data delays, where the data being displayed on their computer screens lags the actual market data. Not a very pleasant thing to experience. Even though currency trading software will also work better over a high-speed connection, since not much data is being transmitted you can probably get away with a regular 56K connection

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