First of all, you need to open your accounts, prepare your trading platform, configure your charts and start getting acquainted with the tools you will be making use of. After this stage, you then begin to get your hands dirty. You can commence by simply watching the movement of stocks all day, taking note of the market behavior and how current events affect these movements.
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A. Setting up your trading software
If you want to go all in for trading and be really good at it in this highly competitive atmosphere, you will need to use professional tools. This includes a direct access broker dedicated to traders and not investors. This broker must provide a highly advanced trading platform. It also comes with market data analysis that gives you real time stock statistics including charts and quotes. Minute charts will not be fast enough if you wish to trade fast paced news stock. So much can happen in 60 seconds.
- Digest all information and finish all tutorials set up by your broker and market data provider.
- Know how to set up a level 1 quote screen. Level 1 is a collection of stocks that comes with streaming data like the bid, ask, last trade, high of the day, low of the day, open price and total volume to name a few.
- Know how to put up your charts. You will see the Cat System set up here. (If you are in possession of Real tick, I can always send my pages to MTrader members and assist you in setting that up)
- Know how to configure your simulator and carry out orders
B. Monitoring Stock Movement
- Select three focus stocks that have a high average volume and a regular daily range. A few examples you can pick from are QQQQ, SPY, AAPL, AMZN.
- Monitor your focus stocks on Level 1 and focus on the volume and price action
Dedicate some time to just monitoring the movement of stocks and note how fast the trades are moving and changing throughout the day. It is usually fast paced early in the day and it slows down towards lunch before picking up pace again by afternoon. Get acquainted with the dynamics of the volume changes.
- The market and the stocks are usually driven by the news so it is vital that you stay current. You have to begin every day looking out for any potential market driver. You can get this information on various financial TV stations like CNBC and Bloomberg and you can also get information online at various money sites.
- Economic reports are made available most mornings between 9.45 – 10.00 ET. Some of the information that is made available with these reports can cause market reactions which you have to be ready to move to.
- For all of your stocks, you should be current on any news or upcoming earnings report that can have any effect on the stock. You can get this information from websites such as http://finance.yahoo.com
- Get up to speed with spotting early momentum. This momentum is always driven by a news catalyst.