| The Power of the PC | | | | fast as possible (including the internet/browser |
| Thanks to the geniuses in Silicon Valley and other | | | | experience). In addition, many advanced traders |
| spots around the globe, the power of the personal | | | | deploy multiple-monitor setups so they can access all |
| computer has grown exponentially over the past 20 | | | | of their tools at once. Instead of screens popping up |
| years. Despite this, very few day-traders and active | | | | and down on a single monitor, they have dedicated |
| investors actually use the full power of their personal | | | | screens for quotes, charts, news, trade execution, |
| computer systems. | | | | and internet browsing. The relevant screens are |
| Most day-traders run a single piece of software on a | | | | always visible, enabling the user to act on information |
| mid-level computing machine which, at this point, | | | | in real-time. Again, in the right hands, this can be a |
| means a computer more than 2 years old. This | | | | tremendous day-to-day advantage. |
| software is usually a brokerage-provided trading | | | | Example Of An Advanced Trading System |
| application that combines a brokerage service (i.e. a | | | | One example of a core trading application that |
| way to actually execute trades) with tools for news, | | | | provides excellent out-of-the-box functionality is |
| charting, and analysis. | | | | Power E-Trade Pro. The software handles basic |
| Usually, these applications are fairly comprehensive | | | | trades for stocks, options, bonds, and ETF's, as well |
| and are a great starting point for any trader. Besides | | | | as complex options trades and conditional orders (e.g. |
| using a single piece of software, most stock market | | | | stops, trailing stops, sell X shares if Y happens). The |
| traders get all of their information and analysis from | | | | program provides a massive amount of information |
| the internet. However, the internet is not always the | | | | and includes several powerful tools for doing real-time |
| best method for gathering data. | | | | market analysis. It has a very technical and |
| The Internet Is Best For Some Things, But Not | | | | highly-configurable interface, and by default displays |
| Everything | | | | green, red, and white text on a black background so |
| The web is a wonderful resource, but anyone who | | | | you don't have to stare at a super-bright screen all |
| has worked with computers for long knows that | | | | day long. |
| working in the internet world is not as fast, efficient, | | | | Besides Power E-Trade Pro, there are many other |
| or stable as running something on the computer | | | | examples of quality stock market trading applications |
| desktop. Desktop applications are meant to do one | | | | including Interactive Brokers, Tradestation, and Think |
| thing very well and they can be made to run | | | | or Swim (which is offered by TD Ameritrade). Each |
| lightning-fast in their native environment, whereas the | | | | offers it's own suite of quality tools and services |
| internet experience, even at its best, is often marred | | | | covering quotes, charting, news, and analysis. They |
| by painful wait times as pages are loaded into the | | | | are also supported by well-established brokers, which |
| browser (or whatever is going on while that little | | | | is a very important consideration when selecting the |
| wheel spins). | | | | core for your trading system. |
| In the modern world of web 2.0, this is an even | | | | To supplement the main software functionality, raw |
| bigger impediment as the user is hit with videos, | | | | stock market data can be downloaded using a |
| moving ads, and dynamic data streams. On top of | | | | number of software programs (including some of the |
| that, you're lucky if the page that you were waiting | | | | core packages mentioned above). There are also |
| to load was the actual website and not just a | | | | several sources online which offer raw market data, |
| full-page advertisement that pops up before your | | | | including some free ones (this is usually End-of-Day |
| page actually loads. | | | | (EOD) market quote data). The raw data can be |
| Some web sites are faster and more stable than | | | | analyzed using Microsoft Excel or any number of |
| others, but with millions of links to click on, it's not | | | | more advanced data-mining applications to spot micro |
| long before your information-gathering experience | | | | trends (for individual symbols) as well as macro |
| can hit a snag and bog down (or even lock up, | | | | (economic and sector) trends. The data can be sliced |
| requiring a restart of the browser). This varying | | | | up and viewed in a nearly infinite number of ways |
| performance aspect, along with the inconsistent | | | | using custom formulas, SQL queries, and data |
| look-and-feel of different web sites, can be a | | | | visualization methods. This ability to do custom |
| frustrating problem when you're trying to do market | | | | analysis is what really makes a trading system |
| research and analysis. I don't want to downplay the | | | | "advanced". It's what provides that extra bit of |
| internet, which is obviously an amazing and | | | | knowledge that can really give someone an edge |
| tremendous resource, but it does have a few | | | | when deciding which side to take on any given trade. |
| drawbacks and isn't always the best for everything. | | | | On the hardware side, it really is best to use |
| {module 62} | | | | newer-generation components in order to minimize |
| The Advanced Market Trader | | | | any computational or network-related delays. This |
| Not all traders stick to the basics. Some tech-savvy | | | | provides a more enjoyable work environment as well |
| individuals go the extra mile and run 3rd-party | | | | as powering the tools needed to get a serious |
| software applications that provide further powerful | | | | trading edge. Multiple monitors are a must-have if you |
| features and offer deeper levels of analysis. These | | | | really want to employ an advanced trading system |
| systems usually provide additional screening and | | | | and stay on top of the latest information. |
| charting capabilities, and they often employ more | | | | Who Has The Real Advantage When Trading In The |
| advanced mathematical techniques for determining | | | | Stock Market? |
| patterns, strength and weaknesses (e.g. Greek | | | | Every single trade that is made, whether in stocks, |
| calculators and momentum trends). These tools range | | | | options, or futures, is a 1-on-1 exchange between |
| from very fancy and showy to very plain and | | | | you and another trader. It doesn't matter if it's a guy |
| academic. Personally, I prefer a plain, technical | | | | sitting at home in his pajamas or the manager of the |
| look-and-feel to my applications. I don't want to pay | | | | most massive and aggressive hedge fund in the |
| for fluff, and I don't want software development | | | | world. On every single trade there is a buyer and a |
| teams to be spending any time on that either. | | | | seller. Raw instinct is perhaps the most important skill |
| Regardless of the look, in the right hands, these | | | | for an active trader, but whoever has the most |
| software tools can provide a tremendous trading | | | | accurate and timely information has given themselves |
| advantage. | | | | a distinct advantage. Consider how much computing |
| Many advanced home-based traders employ | | | | firepower you are up against on each trade and you |
| leading-edge computer hardware like Intel Corei7 | | | | will realize that every trader should re-evaluate their |
| CPU's, triple-channel RAM memory, and Solid State | | | | computer arsenal so they can at least give |
| Disks (SSD's) to insure that their software runs as | | | | themselves a fighting chance. |