Everyone wants a shortcut to learn day trading or any other kind of short term trading – someone to teach them the “secret sauce” that will take 10-20 years of experience and allow them to come up to speed in a few months. If you needed back surgury, would you go to the guy who got is associate degree online, or the guy who went to Harvard Medical School? Is that even a fair question?? Well, it’s lucky for everyone that trading is far harder than brain surgery … not really but it can seem like it. In reality there are some easy things everyone can do to dramatically increase the chances of winning and decrease the learning curve – but do not expect a single, easy secret that will solve all the issues and make it easy. That knowledge is learned.The one huge key to the path of winning is simply to do things that will not cause you to lose money.

First off, you really need to treat  day trading as a profession. This means act like its a real job and your only way to make money. You need a dedicated computer to trading with at least 2 monitors. Do not try to use some 5 year old computer that is underpowered. I can assure you that computer will fall behind of the task. Nothing is worse than lagging data (meaning the market is at place C but your computer is showing its at place A still) and failed network connections. Trading is super data intensive, make sure you have a computer with at least the following specs:

1. A minimum dual core chip, ideally you want a quad core chip. Each core can run a separate app, really lessens the chance that the computer will stall out. Make sure the processor you choose has a decent amount of L2 cache also – this increases speed as well. If you dont know what this is, ask a local computer nerd, they will help you.

2. A minimum of 2gb memory, the more the better. If you want to access and use more than 4gb of memory, you will need to use a 64 bit operating system – othewise the memory cannot be accessed. Make really sure before you do this step that whatever software you plan on using is compatible. You should be able to get by with 2-4gb fine. The faster the memory the better, but no need to really pay up for special memory.

3. a separate, discreet graphics card from AMD or Nvidia. Make sure the card can handle at least 2 monitors. You do not need a high end gaming card, you should be able to get something decent for about 100-150 bucks easy. Do not rely on the built in graphics on the motherboard, they are notoriously underpowered for any graphics intensive software. Trading is extremely graphics intensive – think about real time charting, indicators, order entry, bid ask in real time etc – it adds up.

You will only need this on your main computer that will be traded on and used for charting. You want 1 dedicated screen for order entry and 1 screen for charting. If you have any other computers that are older, those are totally fine for surfing the net, getting news, IM chat and other stuff. I would always keep your trading computer as uncluttered with add on applications as possible. You do not want it to crash or lock up during trading hours.

Just like a real office, you need a dedicated space that will serve as your trading center and workplace. It needs to be setup no different than a desk in a normal working environment – phone, lights, supplies, computer, printer etc. In order to succeed at trading, you have to treat it as a real business, not as a hobby or whim or a way to get your gambling fix. A hobby is fine, but you cannot expect to become an expert unless you treat it seriously. When you are concentrating on trading, do not let outside influences distract you. This means chatting on the phone to friends, watching tv shows, and doing other things while “kind of watching” the market. If this type of behavior would not be acceptible in a normal office, it will not cut it for trading either.

Once your office is setup, you really need to get serious about learning how the market works. The internet and free blogs are a great source of information, but you should not expect to learn everything online. Go to amazon.com.or other sites like Trader’s Galleria – search for the term “charts” or “stock charts”. You want a beginning book and an advanced book on charting. To learn to trade you have to understand the mechanics of how price moves, which means you have to learn to be an expert at charting. This can and will take some amount of time, and is not easy. As you get better at it through practice, it is much easier to learn new ideas and concepts because you have the background to understand them.

One can expect that chart reading would take about a year to get really good, but in just a few months you can become proficient. Do not go down the path thinking “I can throw some money at this and someone will show me the secrets”. If you don’t have the foundation to understand what is going on, no amount of shortcuts will fix that since you dont understand the underpinnings of how stuff works. One word of caution – do not attend any seminars until you have at least mastered basic charting – your money and time will be wasted. IF you think you know enough to tackle the advanced book, then it is probably time to attend a seminar to learn more. Again, there is no real subtitute for real experience gained. You will need to watch the markets every day, even if its just for an hour or 2 (until you decide its a career move you can make).

Static charts are fine to go over when the market is closed, but you really need to watch it live as well. If you have a full time job and cannot sit in front of the market all day, here is a secret: Get some screen video capture software and record the market action to a portable hard drive for review later on. Open your charting program, log it on and set up a few real time charts on the screen before you go to work. Set up the software you are going to use for recording to save to the external usb hard drive. You can set up a macro (there are free programs out there that can do this, search Google) if you are not home when the market opens. Set it to start recording and then grab at least an hour of video from the market open and any additional charts you have open. At night you can then replay this recording in real time (or even speed up time) and watch for chart patterns to learn from. If this does not appeal to you, some of the brokerage firms or data vendors have market replay that can replay parts of the prior day for you.

One last thing I have not touched on yet – charting software. There are a lot of them available. I have my own preferences, but that does not matter. You need to discover what you are comfortable with. Some programs are very complicated, some are simple to use, and yet others will let you code custom indicators and trading systems. If the beginning , I would suggest everyone go with simple. What is the point of tons of things that you have no idea how they work or what they do, or even if you would use them?? All that can do is to lead to confusion and add a bunch of things that are too complicated. Just make sure the charting is NOT web based, can support both tick and minute based charts, and has a lot of indicators built in already. Web based means the program is running in a browser, rather than running as a separate executable. For the most part, you always want a standalone, executable program – they are far faster and speed is money. You do not want web based order entry (browser) for active trading, its just too slow – you need real time profit and loss and the ability to watch positions in real time. It is too slow in general to be of any use. Web based applications and software are totally fine for buy and hold and longer term investing type trading. Trading is about time, even 5 seconds sometimes can cost you 50c per share if the market is moving fast. That is a real cost and can cause you to turn what would be a winning trade into a losing trade.

While this was not a tutorial on how to trade, I tried to touch on a few subjects often overlooked when people are trying to learn to trade. They overlook these because they either cost money (charting software, real time data, computers) or they think they take too much time so lets find a way to skip this or that part.

Every business has fixed costs that go along with the territory. As a trader, data and charting costs are one of many. Often you can get them minimized or waived if you are active, but for probably the first year expect to pay for them as you are learning.

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