Daytrading Tools
Day traders are dependant on tools to analyze trends, know exactly where the current price of a stock is trading and instantly execute purchases and sales. Fortunately, recent advances in technology have enabled the creation of an exciting array of powerful day trading tools. Writing in his 2011 publication, The Complete Day Trader, author Jake Bernstein states that contemporary day traders now have tools at their disposal that are utterly fantastic when compared to the tools used as recently as the 1990s.
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Stock Market Analysis Charting Software
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Day traders utilize stock mark analysis charting software to analyze past market trends and use this historical data as a cue for buying or selling a given stock. For instance, a strategy used by day traders is to employ the software to determine when a stock price hits either a support or resistance level. Because a number of investors use these levels to determine buying and selling strategies, the breach of this level can set a trend for the stock.
Day traders use stock market analysis software to analyze the past activity of a given stock and filter that activity through the lens of certain filters, such as Fibonacci numbers, the golden mean constant, point-and-figure charts, ratio retracements, Gann angle, and support and resistance trend lines. Based on the input from different filters, the software provides the trader with a signal to buy or sell. Favorite stock market analysis software packages include Tradestation, MetaStock and VectorVest.
Real-Time Data
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As you might imagine, real-time stock price data is one of the most important tools available to the day trader. A day trader who does not have access to real-time data is significantly disadvantaged in comparison to his counterparts who know exactly where a stock is trading. Historically real-time data was only available to day traders for a price. However, in 2008, Google Finance started publishing real-time stock quotes without charging viewers. Since that time, other services have also begun offering free real-time data, including MSN Money and Nasdaq.com.
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Trade Execution Platform
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When seconds count, the day trader is forced to depend on the reliability of his trade execution platform. The platform provides the method for day traders to purchase and sell stock. Many brokers offer their own platform. However, some traders prefer to use a platform that is independent of their brokerage and can communicate with multiple brokers. Examples of these types of platforms include Sterling Trader, Ninja Trader and the open source TradeLink program.
Stress Reduction
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Day traders must utilize stress reduction techniques to maintain a healthy perspective. Fitness and exercise tools provide traders with a way to work out stress, get away from the computer and stay in shape.
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