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As modern day trading is electronic, the exchanges are run by computers, and are accessible via the Internet, so day traders can work from almost anywhere in the world using only a few tools and services. These tools are things like a computer, Internet access, and a telephone, so most people already have some of the tools that day traders use. The remaining tools are services that are specific to day trading, such as a day trading brokerage, and market data, and these services are also available via the Internet.
Hardware and Software
The following tools are the hardware (such as a computer), software (such as charting software), and other physical items (such as a telephone) that are needed for day trading. Each item is described in detail, with an explanation of when and how the item is used during trading :
Day Trading Computer
Telephone
Trading Software
Charting Software
Day Trading Computer
Day trading computers range from standard computers available at any computer store, to custom built computers with multiple CPUs and support for multiple monitors. Day trading computers need to be able to access the Internet, while running trading and charting software, in addition to non trading activities, such as web surfing and email.
Minimum Specifications
Day trading computers can be any make and model, but should be meet the following minimum specifications so that they are fast enough and reliable enough for day trading :
Operating System : Windows XP or Vista
CPU (Processor) : Intel Celeron or AMD at 1.0 GHZ
Memory (RAM) : 512 MB
Hard Drive : 20 GB
Screen Size : 15 " (38.1 cm)
Screen Resolution : 1024 X 768
Network Interface : 10 / 100 Mbps
Modem : 56 Kbps
The most important features are the CPU speed, the memory, the screen size, and the screen resolution, which should all be as high and large as possible.
The more powerful a day trading computer is, the more markets and charts it will be able to handle, so beginning day traders can use less powerful computers, while more experienced day traders may want more powerful computers.
Operating System
Windows XP is the recommend operating system, because most brokerage provided trading software, and most charting software, requires Windows XP. Some day trading brokerages (such as Interactive Brokers) offer trading software that is compatible with Unix and Mac operating systems, but Windows XP will give you the widest choice of day trading brokerage, and of trading and charting software.
In contrast to traditional investors and traditional brokers, day traders make all of their trades themselves, using direct access brokers, so that their trades are sent directly to the exchange. This means that day traders only contact their brokerage via the telephone when something goes wrong, and they need to exit a trade, and have no other method of doing so.
For example, if a day trader had an active trade, and their primary and backup Internet access were unavailable, or if their computer was not working, they would need to contact their brokerage via the telephone to exit their trade.
Landline or Mobile Telephone
As day traders rarely need a telephone, either a landline or a mobile phone are acceptable choices, and both have their own advantages and disadvantages
Trading Software
Trading software is used by day traders to place the entry and exit orders that make up their trades, and is often known as order entry software. Trading software displays the current (and sometimes most recent) prices for each market, and usually interfaces with charting software to provide a graphical view of the market.
Brokerage Software
Each day trading brokerage has their own trading software, so the trading software that each day trader uses will often depend upon which brokerage they choose. The trading software for some popular day trading brokerages are as follows :
Pivot Point Bounce
The pivot point bounce trading system uses a short term timeframe and the standard daily pivot points, and trades the price moving toward, and then bouncing off of any of the full or half way pivot points.
Pivot points are support and resistance levels that are calculated using the open, high, low, and close of the previous trading day. The pivot points include the pivot point itself, six full support and resistance levels.