What Does it Take to Be a Day Trader
So, what does it take to be a day trader? First and foremost, you need access to discretionary funds. Discretionary funds that you do not need to survive. Funds that are not tied into a retirement fund, college funds or any type of funds set aside for a specific purpose. Discretionary funds are an amount of funds that are over and above your normal living expenses. We are all fully aware that in todays economy, discretionary funds tend to be a light-weight in the budget of most households. Frequently, there is little to none left over. However, if you are more fortunate than others and have the financial ability to maintain a budget that contains allotment for discretionary funds – you may decide to try to put the money to work for you, by day trading or short term swing trading.
Aside from discretionary funds – you need the right equipment. Potential day traders need to have access to the highest Internet speed possible. Reliability of your Internet connection is just as important as the speed of your Internet connection. While WiFi has become extremely popular, it is not something you should use as a day trader due to its instability. A day trader cannot afford to lose connection to their trading platform, for even a second. Interruption of your Internet speed will affect the data you rely on, to base any trade – whether entering or exiting. Your Internet speed and connection are your blood line to your trading platform. No connection to your trading platform means the blood flow is interrupted and without an efficient flow of blood, your main organs needed to survive – data feed and ability to execute a trade – are immediately hampered.
Whether you are using a desktop computer or a laptop, you need reliability and a process with the ability to process the amount of data that will be flowing on your computer seamlessly, while you are trading. You also need to maintain your computer on a daily basis in order to retain this quality of your computer processing ability. Clearing cache and history at least once daily is required. Surfing the web while you are trading is not something we suggest. Crashing or locking up your computer while you are in a trade – is not a good thing. Professional traders will have a separate computer they use for trading thus, no outside surfing from it when they are not trading. This is a safety net and will help to prevent picking up a virus etc.
A reliable and affordable broker can make or break any day trader or short term swing trader. While it is advised all potential day trader or short term swing trader review options and fees from several different brokers, immediate phone support is just as vital. If you are in a trade and for whatever reasons need to contact your broker by phone to exit a trade, the last thing you want to hear is a busy signal and you certainly do not have the luxury of being put on hold either. While you are evaluating a potential broker, phone contact is an issue you need to discuss with them, in depth. You need to ask your potential broker if they provide that type of support, when you need it the most.
More to come on next month’s edition of ‘What Does it Take to Be a Day Trader’.