Prof. Tyler yamazaki

Chapter 5
Tools of the Trade
Even when compared to other types of trading, the tools you use as a day
trader are extremely important if you hope to generate a profit on a regular
basis. Thanks to the tight timeframes that day traders typically operate
under, every second can literally be the difference between success and
failure which means the platforms, software and tools you use are
ultimately just as important as the strategies you employ and the stocks you
pick to trade. What follows is a list of things that every day trader should
have on hand in order to ensure as much success as possible.
Tools
The right hardware: While you don’t necessarily need the latest and
greatest in computer hardware in order to run most types of trading
software, that doesn’t mean you can get by with the bare minimum either.
The better your computer, the faster and smoother this software will run and
the less lag and fewer crashes you will experience. First and foremost, it is
important that you have adequate RAM which will make it easier to
multitask without issue as you will frequently have several different
programs as well as your web browser open at the same time. Additionally,
as your software needs increase, the base level of hardware required will do
the same.
While these costs can easily add up dramatically if you have to purchase an
entire new rig all at once, there will rarely be a need to do so. Rather, you
can purchase parts overtime as needed, or when they are on sale, in a more
piecemeal fashion most of the time. With this strategy, you can grow your
hardware capabilities slowly as your need for the increased power manifests
itself.
As you get more serious about day trading, you are also likely going to
want to run at least 2 monitors at a time, if not more, which will allow you

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to dedicate one to trading and the other to research and tracking results.
This will mean you will likely need a better video card with enough HDMI
ports to account for the additional monitor inputs. Once this is done,
depending on the quality of your system, and its available cooling power,
you may need to look into liquid cooling solutions as well to ensure that
things don’t overheat in the midst of an important trade.
Regardless, you are going to want to invest in the best internet speed
available that your current system can reasonably take advantage of. The
current high-end standard is 1 gigabyte MBPS which can be found in most
major markets, though something around 100 MBPS is typically fast
enough for most systems. In addition to having access to the speed, you are
going to need to be sure that your router and modem can keep up as well or
they will bottleneck your efficiency to a noticeable degree. When you
contact your internet service provider, you will also want to consider
reinstalling a landline as a type of emergency backup in case you find
yourself unable to make a specific trade in any other fashion. While this
might seem like overkill, the $10 per month will seem reasonable the first
time you find yourself using it to place a major trade and you can think of it
as a hardline to your broker in case the worst occurs.
Brokerage: Many traders stick with the first brokerage they come across
without ever thinking twice about it. This can be a serious mistake,
however, as an experienced trader has needs that are frequently quite
different than those of a beginner. As such, once you get used to the day
trading experience it will generally behoove you to reevaluate your choice
of broker and determine if you ultimately made the right decision.
First thing in order to determine the best options for what you are looking
for, the best place to start is on your favorite day trading website and see
what the people who frequent their forums have to say. After you have
determined a suitable list, the next thing you will want to do is determine
the fees that they charge in exchange for the services that they offer. If you
have already determined what trading platform or online tools that you
prefer then it is important to make sure that the brokerages you are looking
at support them as not all brokerages support all trading platforms.
Otherwise you risk having to learn an entire new platform from scratch.

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Additionally, it is very important that you choose a brokerage that is based
in your home country or at least in a country that provides proper oversight
when it comes to day trading. While many foreign brokerages might offer
cheaper fees, putting your money into the hands of a company without
direct oversight means that if that company suddenly disappears, your
trading capital will go with it.
Finally, it is important to make a concentrated effort when it comes to
determining the type of customer service the brokerages you are interested
in provide. In order to determine this, you will want to do more than listen
to reviews which can easily be skewed in one way or another, it is instead
best to see for yourself. This means you are going to want to call the
brokerage personally and see how long it takes for you to speak with a real
person. While you won’t have to actually call your brokerage very often,
when you do it is likely to be an emergency which means you are going to
want the time it takes to find someone to talk to, to be as short as it possibly
can be.
As a new customer, it is likely that you will receive a call back from
someone associated with the brokerage who will try and sell you their
service. If this call takes more than one business to occur then you will
know that you are better off going somewhere else. After all, if the
company treats new customers with that level of disdain, consider how
much worse things will be once they already have your money and aren’t
actively trying to make a good impression. Finally, assuming that their
customer service is up to snuff, you will also want to email them with
questions a few different times, just to see what their level of response is
like. While this process may be a bit time consuming, once you find a
brokerage that is on point, it will be more than worth the effort in the long
run.
Online trading tools: There are plenty of different tools online that claim to
help you maximize your trade efficiency so the ones you choose to use are
ultimately up to you. First things first, you are going to want to find a
financial calendar that works for you to ensure that you don’t miss any
important dates when it comes to financial earnings reports. The program
you choose should automatically populate with various important events as

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well as offer many different customizable dates and provide details on
multiple different markets.
If you ever trade in the forex market then you will want to find a good
currency convertor that shows any changes to specified currencies in real
time. You will also want a currency convertor that shows the range a
specific currency pair has operated in over a predetermined period of time.
Additionally, you will want to ensure that you have a calculator that makes
it easy to determine pivot points along with Fibonacci numbers. These tools
will make it easy for you to keep up to date on relevant trends and help you
stay informed on relevant indicators that it is otherwise easy to miss if you
aren’t careful. Along similar lines, you are going to want to track down a
heat map that is reliable and that shows you the trades that are currently
trending along with a volatility monitor to make it easy for you to keep tabs
on the mood of the market.