To be able to start trading stocks, there are a list of tools which you are required to have beforehand. Trading tools are things that either empower you to trade online or make your life easier by making your daily tasks more convenient. In this chapter, we will scratch the surface on some of the most basic, yet essential tools you will need to get going when trading stocks.
1. Internet Connectivity – Internet connectivity speed is probably one of the biggest misconceptions people have about trading in the comforts of their homes. You do not need a blazing fast internet connectivity to make the most of your trading. The professionals in Wall Street have direct access to the market and can probably execute their orders faster than you even if you have the fastest internet connectivity. With that said, you do need at least a decent connection to ensure that orders are flowing smoothly and that the connection does not break in the middle of the trading session. An ideal connection would be a fiber-optic service, while a cable modem service would work just fine.
2. Computer/Laptop – Likewise, you do not need a very fast computer to be able to start trading stocks. An i5 processor works beautifully and should be enough to cater to your every need. Of course, depending on the trading platform that you are using, the operating system actually matters. Most platforms works on Windows while only a few have actively developed on the Mac OS. If you are looking to day trade or scalp trade, it might also help to have 2-3 monitors so that you can keep track of multiple stocks at any given time.
3. Trading Software – Your trading software is the tool that you use to place your trades and very likely also to analyze your stocks. Because it is something that you will use rather frequently and for important purposes, we recommend that you do detailed research on the respective platforms. Generally, the platform should fulfill your basic needs such as the ability to place stop-losses, be bug-free and allow for real time stock quote streams. Additional services can come in the form of real-time news, Level 2 quotes, Time and Sales and advanced charting diagrams.
To protect your computer completely, it will be a great idea to install antivirus programs and firewall. The last thing you want to happen is your computer to hang or stop working is in the middle of the trading session when you have your money tied up in a critical transaction. Of course, ergonomic tables and chairs might come in handy as well if you plan on trading stocks for long hours.