Category: 

What Are the Different Types of Day Trading Tools?

Day traders can find charting software online.
Article Details
  • Written By: Dana DeCecco
  • Edited By: A. Joseph
  • Last Modified Date: 07 September 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
  • Print this Article

Different types of day trading tools can be used to enhance investors' trading skills. Accurate data flow and charting software are available online. Information services that provide news announcements and current events are abundant. Brokers can equip day traders provide ultra-fast trade execution platforms. Day trading would not be possible without these day trading tools.

Various financial assets are available for day trading. Liquid assets that are heavily traded are the best choice. Broad-based indexes as well as individual equities can be day traded. Commodities and currencies are among the many day trading alternatives.

The types of day trading tools selected will depend on the asset being traded as well as the system being used. Trading systems can range from scalping tick charts to swing trading larger time frames. Accurate and timely data is necessary for scalping tick charts. This time frame can be one second or less. Extremely fast order entry platforms are supplied by brokers catering to day traders.

The trader must be thoroughly familiar with the order platform being used. Entry and exit signals must be acted upon quickly and accurately. Some day trading platforms enable trading directly from the chart. Technical analysis and order entry can be accomplished from a single computer screen.

Ad

Different hardware configurations are another option available. Day traders can make use of multiple screens. Hardwired feeds might be dedicated for data only. Multiple computers, screens and data sources can be configured to create a custom trading environment. Day traders usually require data feeds, news feeds and secure broker connections.

Trading signals can be acquired through technical and fundamental sources. These types of day trading tools can be purchased or developed. Various information sources include news, economic announcements and even noise directly from the exchange floor. Independent firms supply specialized feeds for day traders.

Technical signals can be developed by the trader using analysis software. This software is normally in the form of charting programs, which include an array of indicators as well as the ability to create custom indicators. Technical signals are also available from independent signal providers.

Brokers that cater to day traders generally specialize in specific financial assets. Some brokers might specialize in trading indexes and will supply the trader with the tools necessary to trade these assets. Other brokers might specialize in currency trading or precious metals. These specialized brokers are well equipped to supply the trader with the necessary tools.

Before selecting the day trading tools, the trader must decide which financial asset will be traded. The time frame and style of trading also must be determined. The broker can be selected on the basis of commission rates and support provided. The day trading tools provided by the broker might be of prime importance.

Ad

More from Wisegeek

You might also Like

Discuss this Article

Post your comments

Post Anonymously

Login

username
password
forgot password?

Register

username
password
confirm
email