Daytrading sounds like a nice, simple way of life. You sit down at your computer, trade a bit in the market, and you can make money.
But, of course, that is not the case. Daytrading must be perceived exactly like any other business endeavors where you need to control equipment, training, backup plans and much more.
So, in this article, we go through what it takes to be able to daytrade with profit.
Let’s start by looking at hardware.
A key tool for daytrading is of course a computer. Considering that it is one of the most important tools in your daytrading business, you should not save here. Another thing is that most people still need a computer in everyday life, so it’s not necessarily a computer that is only used for daytrading.
The ability to connect multiple monitors is important
Basically, you need a fast computer with a powerful graphics card, so you can have charts on more than just one screen.
You will be surprised at how comfortable it is to have 2-3 additional monitors connected to your computer so you can work efficiently while keeping an eye on the markets. The screens do not have to be of the highest quality because they are used to view graphs on and not edit high resolution photos, so you can usually buy them for less than 1,000kr.
Just a few years ago, such a computer was very expensive, but today most stationary computers in the price range from 5,000 to 7,000 kroner can do the job well.
Finally, ask for graphics cards and the option to add more screens before choosing your computer.
A laptop is not necessarily a future-proof solution
The laptops are a bit more expensive, but are not necessarily better, as it is often more difficult to run multiple monitors simultaneously. However, the advantage of the laptops is that they can continue to be used when the power is gone, provided that the internet is still working.
It can be very comfortable to sit with a laptop in the lap on the couch and trade while watching Netflix with the family, but it is not recommended.
If you want to be a serious and profitable daytrader, we recommend setting up a workstation in an office. It does not matter that you are sitting at home in the basement, but it is important that you are not constantly disturbed as it significantly increases the risk of bankruptcy.
Wireless mouse and keyboard can be dangerous
It may seem very tempting to go for a wireless mouse and keyboard, but don’t do it.
Simply try to sit and scale in the market to discover that your mouse or keyboard suddenly has run out of power without warning. That can be a very costly experience. For me, besides a lot of lost money, it cost a broken screen in pure frustration.
So, think about it.
IT security is very underestimated
The risk of phishing, malware etc. is still increasing, but unfortunately very underestimated. But keep in mind that if you are being loose with your security, one day you risk waking up to an empty trading account.
If you want to increase your security as much as possible, we recommend that you use your working computer exclusively for daytrading and instead buy a separate computer – for example. A portable – for your other things like email, facebook, skype etc. In addition, you should also use the approx. 300-500 kroner annually on a good anti-virus software. This reduces the chance that there will be a virus at your workstation.
The risk of malicious attacks becomes no less because you may become known in the industry as a successful daytrader (we are unfortunately talking of our own experience!), So make an extra effort here to limit the risk.
Stable and fast internet connection (s)
As with the computer part, Internet connection is almost unnecessary to write about today. Most areas now have the possibility of fast internet at quite affordable prices.
The monthly subscription for a high-speed internet connection is again something to be included in your business expenses in your trading business.
A spare internet connection
For many daytraders, this is not an absolute necessity, but learned from experience, I personally bought myself an additional internet connection, so I’m not dependent on cables in the ground. This can either be via the cellular network or the like.
The reason for this is that you can always be unlucky and a cable is dug over somewhere. This probably happens at the most unfortunate time when you are in a losing position where you have to hurry out. Suddenly the connection with big losses smokes as follows. If you have big amounts in play in your daytrading, then the monthly amount for an additional connection is a relatively cheap insurance. Consider it.
Most people now have the option of having a laptop as a backup. This protects you against power failure with regard to computer power.
But if your only internet connection is dependent on a router, then it may be a good idea to have a backup battery pack that can secure power for a period of time so you can close your trades.
Such a battery pack is usually called Uninterruptable Power Supply or just UPS. They cost from 600 and above depending on battery capacity and are something that should be considered strongly if you deal with very short-term and high gearing. Here, 15 minutes of power and access to the Internet can be disastrous.
Here is a link to the UPS category on EDBpriser.dk
Trading apps from your broker
As an alternative to the above, you can also use a trading app for smartphones or tablets from one’s broker.
If this runs wirelessly and is independent of your power supply, then this is an excellent and affordable solution at startup.
Another thing you should always have on your trading computer is the phone number of your broker’s trading desk (you can usually find this on the broker’s website). Then you can call your broker directly if their platform goes down and you can then close an active trade quickly.
Convenient office interior
When you are going to sit for many hours and daytrade, it’s important that you think about your physical work environment so you do not get tired of it.
Most daytraders like to have two or more large-sized computer monitors for trading.
Today, such a screen does not cost the world. But avoid the very cheapest, so you do not strain your eyes and so you have a great overview.
You can advantageously turn down the brightness at evening time so your eyes do not get too much light before bedtime, so you fall asleep faster and better.
Desk and office chair
When you need to sit many hours in front of the screens, it’s important that you have a desk set at the right height as well as a good office chair. We recommend you to buy a height adjustable table so that you can stand up and spare your back, as well as a comfortable office chair that can be adjusted to your liking.
It may seem like indifferent details, but after 1,000 hours in front of the screens, it becomes clear why this should be considered.
Personally, I would rather buy something really nice used than any bad quality from new.