Day Trading Tools and Platforms
This is a famous expression in the trading community. You can be the best trader, have the most proven strategies, but if you are in the wrong stock, you will lose money.
There are too many new traders who do not know what a good stock to day trade is nor how to find one, and they waste too many trading days mistakenly believing that the market is impossible to day trade in. One of the common challenges that new traders mention is not knowing what to trade. Thousands of stocks are moving in the market every single day, but finding a setup that is both consistent and a good fit is really hard. I use Trade Ideas software (www.trade-ideas.com) for scanning the market and finding good trades.
For day trading, you need a good direct broker. In fact, you don’t just need a good broker; you need an awesome broker. Your broker is your vehicle to trade. If you have a bad broker, you lose money, even if you are trading properly and accurately, because your broker eventually has to fill your order on time and at a good price. There are many brokers out there with various software and price structures. Many of them are great but expensive, some are terrible but cheap, and many of them are either terrible or expensive or both. I will share here what broker I am using and why.
Pattern Day Trade Rule (PDT)
According to a U.S Government regulation called Pattern Day Trade, the U.S. residents will need a minimum of $25,000 in their account for active day trading. Therefore, the U.S-based brokers (such as Interactive Brokers or SpeedTrader) will enforece this rule for all U.S. residents. You can read further about the “Pattern Day Trade” regulation here.
If you plan to day trade with less than $25,000, you may be able to use non-U.S. based brokers such as CME Group.
SpeedTrader (www.speedtrader.com) is a very popular broker for U.S. residents, including Canadians with U.S. addresses as well as traders from around the world. Please visit their FAQ for a complete list of accepted foreign clients. As mentioned above, the PDT rule applies for U.S. residents. However, SpeedTrader requires a minimum of $30,000 to open an account. They are offering our members a flat commission rate of $2.95/trade, regardless of share size in your trade. This is an astoundingly low fee, compared to the typical $4.95/trade charge of many other brokers.
Please mention if you are a member of Bear Bull Traders in your SpeedTrader application to receive the discounted commission rate.
SpeedTrader uses DAS Pro as their trading platform.
Because SpeedTrader does not open accounts for Canadians (I live in Vancouver, BC), I am currently using Interactive Brokers (also known as IB, www.interactivebrokers.com). IB is also an inexpensive broker with commissions as low as $1 per trade up to 400 share size trade. Similar to SpeedTRader, IB is also subject to PDT, meaning the U.S. residents must have at least $25,000 in their account to be able to actively day trade. For Canadians, IB requires a minimum of $10,000 for day trading. The U.S. and Canadaian residents who are unable to meet the minimum requirment may consider CME Group for day trading.
IB uses DAS Pro and TWS as their trading platform.
Capital Markets Elite Group (https://www.cmelitegroup.com) is a new off-shore broker that offers 6:1 margin for traders. Since they are based outside of the U.S., the Pattern Day Trader Rule (PDT) does not apply to their clients. This makes CME Group an excellent alternative for those with less than $25,000 available for day trading. CME Group uses the DAS Trader platform (below). If you live in the U.S., have under $25,000 available for day trading, and are looking for a broker-platform combination which resembles what I use, CME Group is the ideal broker.
They are currently offering a discounted commission structure of $2.95/trade up to 1,000 shares to our memebrs. This is an incredibly low fee compared to all other U.S. based and off-shore brokers. If you open an account with them, please e-mail firstname.lastname@example.org and mention code BearBullCMEG2018 to get access to the discounted rates. I am currently having an account with them and sometimes makes trade in that account.
CMEG uses DAS Pro as their trading platform.
Fast trade execution is the key for day traders to be successful. You need to be able to move in and out of trades quickly. If your broker doesn’t use a platform or software that has Hotkeys, you’re not going to get in and out of trades fast enough. I use DAS Trader (www.dastrader.com) as my trading platform. DAS platform is one of the most efficient execution platforms for online traders worldwide.
DAS servers are collocated with NASDAQ data centers so you cannot be any closer to the market for trading than this. DAS Trader is not a broker, but you can link your trading account to its platform for fast order execution. Some brokers, such as SureTrader and SpeedTrader, offer you the DAS platform when you open an account (with a monthly platform fee). My broker, IB, has its own platform (called Trader Workstation or TWS) that I do not recommend for day trading. I have a subscription to DAS directly and they have linked my IB account to the DAS platform.
Please note that DAS is both my charting and order execution platform but it is not my clearing firm. People often think DAS is also a broker, but it is not. DAS will send my orders to NASDAQ data centers and Interactive Brokers, as my clearing firm, will fill my orders. I pay my commissions to IB and not to DAS. DAS does not charge me any commission, only a monthly fee for using their platform and providing me with a real time data feed and Level 2.
NOTE: DAS is a Windows based program. If you are planning to use a Mac, you may use Parallels specifically designed to address DAS Trader Pro Mac/Windows issues. Please visit their website for more info.
I am always being asked for my recommendation for a trading station. There is no easy answer to this because it depends on your budget and many other factors. My trading PC is a custom-made +$3,000 system that supports 6 monitors. But you do not need to have such a station to start with in order to be successful in trading. However, a fast and reliable working station is important. I recommend new traders invest a small amount of their funds in an i5 or i7 CPU PC or laptop with at least 8 GB RAM and an SSD hard drive. I recommend this laptop from Acer. It is a very good and affordable ($579 at time of writing) laptop with the following criteria:
CPU (Intel i5-7200U)
RAM: 8GB DDR4 SDRAM
Hard Drive: 256GB SSD
Display Ports: 1 HDMI + 1 VGA
Of course, there is no upper limit for buying a PC and you can spend thousands and thousands of dollars on your PC, but I encourage new traders to keep the cost of their business down as much as possible at the beginning. You in particular need several screens for your trading laptop or PC because more screens give you more flexibility in watching the market, setting up your platform and scanners, and such.
The highest quality and most affordable screen for trading I have found on the market is the 2017 Newest Acer Business 23.8” Full HD 1920 x 1080 IPS LCD/LED Widescreen Monitor. They are amazingly high quality and very affordable (only $134 as of the time of writing). I have 6 of them for my station. Please note that they are also VESA compatible, so if you will be considering mounting them on your stand one day, you will not have any problem.
If you plan to add more screens to your PC or laptop, but you do not have sufficient screen ports, you may want to consider buying a USB adapter so you can use your USB ports for adding additional screens. I found a USB to VGA port works very well on most PCs and laptops. If you are using a PC, then you may want to add another graphic card instead of using this adapter, which is probably a better idea. But, if you are using a laptop such as the one I explained above, then a plugable USB to VGA Graphic Card Adapter is the easiest way.
I use an Ergotron WorkFit-D Sit-Stand Desk, a standing desk, for my trading hours. It is hard to sit all day long, I hate it! People say sitting is the new smoking, and that we must get rid of it soon. I have no opinion on that, but I found standing is much better for my knees and back and most importantly, it keeps me alert and awake during the day. I love my desk. It is a bit pricy, but I strongly recommend it for anyone who can afford it. This desk encourages healthy movement, and you can adjust it if you want to sit. If you do buy this desk, make sure to buy a standing desk pad (such as this one I use) for it as well. It is a must to have a high quality pad to stand on.
Well, I know perhaps not too many new traders need this accessory, but if you ever decide to upgrade your trading station and want to have a stand for all of your screens, you may need a desk mount. I have a 6 monitor VIVO Hex LCD Monitor Stand and I love it. Since I am using 6 screens, I of course have a stand for 6 screens, but you can also find ones for 2 or 4 screens. It is incredibly cheap (only $103 at the time of writing), but it is of very high quality. I am very happy with this purchase. It is very stable and robust. You will see a picture of my station below. Please note that your screens need to be VESA compatible for this mount. If your screens are not, then you may want to buy a mounting adapter for them. If you douse the screens recommended above, you will need adapters like this here. The adapters are not necessary if your screens are already VESA compatible.
This is extremely important. Day trading requires fast data processing. At times, seconds will literally make a huge difference in your results. Your trading computer and CPU performance is extremely important. You should remove unnecessary programs and apps from your PC, and always use a malware scanner to prevent intrusive software, computer viruses, spyware, adware, scareware, and other malicious programs. This will free up much of the PC’s memory and CPU capacity and your trading execution speed will increase significantly. Your PC, just like your body and mind, needs to be kept clean, lean and fast, all of which have a direct effect on your trading platform and eventually your trading results. I am using Malwarebytes as my malware-crushing and ransomware protection. It’s the security I’ve been looking for. I have annual subscriptions for all of my personal and trading PCs.