Day trading is a highly lucrative line of work, but you need trading software and a computer powerful enough to run it. In this guide to day trading for beginners, we’ll help you understand more about what day trading entails. And to help you choose between the many trading computers on the market today, we’ve provided you with a guide to choosing the trading computer that best suits your personal needs.
How Does Day Trading Work?
In order to capitalize on short-term price changes, day traders buy and sell securities on the same day. Many day traders purchase assets using borrowed or leveraged capital. Learning how to day trade profitably requires extensive news and market monitoring and involves a lot of speculation and risks.
Professional day traders typically have a lot of market experience and a deep understanding of strategies and risks. Day trading requires quick decision-changing and you can see substantial losses in a matter of minutes or even seconds. If you are using leveraged capital, you could lose a lot more than you invested.
How to Get Started in Day Trading
Learn the Basics
When you are learning to trade, start with trading fundamentals like market terminology, trading strategies, and risk management techniques. You can learn to day trade by reading books, watching videos, or taking online courses to learn these concepts.
(Our free trading guides from Falcon are a great place to start!)
You can speculate on a wide range of financial instruments, including:
- Stocks: securities that give you ownership in a company
- Currencies: money used in a particular country or region
- Commodities: physical products like oil, copper, corn, or coffee
- Options: give you the right to buy or sell an asset at an agreed-upon price/date
When day trading, you need to know the instrument’s trading hours, as well as its volatility (range in which the asset sells) and liquidity (ease and speed with which you can buy or sell the asset).
Get a Fast and Reliable Trading Computer
If you’re learning how to trade, you will need a computer that can handle multiple applications running simultaneously, including trading platforms, charting software, and news feeds. These applications require significant processing power and memory, which may not be available on a standard consumer-grade computer.
Our trading computers setups are a great choice for day traders at any experience level. Our machines are fast, run on multiple screens, and can be upgraded as your needs change.
Setting up a Trading Account
After you learn day trading basics, you can set up a trading account with a brokerage firm. This will involve providing personal information, completing a risk assessment, and linking your bank account to your trading account. Then you must decide whether you want to open a cash account or a margin account.
With a cash account, you pay for your trades up front with the available cash in your account. A margin account lets you buy securities with borrowed money and pay back at the end of the trading day. Margin accounts are for more advanced traders who are willing to take a chance on losing more than their investment amount in exchange for a chance at greater gains.
Choosing a Day Trading Strategy
There are many different day trading strategies you can use, including: breakout trading, trend trading, momentum trading, news trading and scalping. Read up on how each strategy works, then choose the one that best aligns with your trading goals and personality.
How to Analyze Stocks and Setup Your Own Watchlist
Once you’ve chosen from the many day trading strategies, you will need to gather information on the stocks that interest you. Before you begin trading in any stocks:
- Identify key metrics like earnings per share (EPS), price-to-earnings ratio (P/E ratio), dividend yield, and revenue growth.
- Research stock factors like the company’s financials, its competitors, and its industry trends.
- Create a shortlist of stocks that fit your investment strategy and have strong company fundamentals and metrics.
- Monitor your watchlist to keep track of how your stocks are performing.
Setup your Trading Platform and Place Your First Trade
Trading platforms are software packages you can use to place trades and monitor the markets. There are several platforms that are easy to set up that will walk you through the basics of how to begin day trading, including:
- TD Ameritrade
Once you have signed up, provided your KYC information, and funded your account, you can enter trade details like the stock symbol, order type, and the number of shares you want to purchase.
Managing Risk and Setting Stop Losses
Before you start day trading for beginners, you need to manage your risk and set your stop losses. Here are some ways to avoid getting overextended.
- Determine your risk tolerance: How much can you afford to lose?
- Set & adjust stop losses: Stop-loss orders automatically sell when your security reaches a certain price to avoid further losses.
- Use position sizing: Most retail day traders risk no more than 2% of their investment capital on any single trade.
- Diversify your trades: This helps you avoid exposure to sudden unexpected changes in a stock or sector.
- Keep emotions in check: It’s easy to get caught up in the excitement and make overly risky bets.
Tracking Your Trades and Analyzing Your Performance
When you’re learning how to do day trading, a trading journal will be invaluable. A trading journal tracks dates, times, financial instruments, entry and exit points, and the reason for the trade. This will help you identify patterns in your winning and losing trades and identify any common mistakes you may be making. You can analyze performance metrics like your win rate and your average gain or loss per trade.
How to Choose a Computer for Day Trading
Day traders need a computer that can keep up with their demands. Because seconds count in day trading, you need a fast machine that can handle its workload without lagging.
Here is how to choose a reliable computer with the right specs for day trading.
Choosing the Right CPU, RAM, and Storage
- CPU: The CPU is the computer’s brain. You need a powerful CPU to handle processor-intensive trading programs.
- RAM: The RAM acts as the CPU’s memory, holding data in memory addresses while the CPU makes calculations. More RAM means the CPU can operate faster and more efficiently.
- Storage: Information comes to RAM and CPU from the storage disk. You want an SSD drive with enough room to handle all your needed data.
Graphics Card and Multiple Monitors
- Graphics card: The graphics card handles the processing of the images and videos you see on your monitor. Because most traders use multiple monitors to keep an eye on different charts and markets, your trading computer will need a GPU that can support several monitors.
Choosing the Right Tech
When you are looking for a trading desktop, trading desktop you need to consider factors like processing power, multiple screens, and upgradability. Here are some computers that are specially designed to handle the demands of day trading for beginners and experienced traders.
The Falcon P-32 is our best-value computer for those who are learning to trade. It comes with a wide range of options to support your needs and budget. You get a powerful Intel processor with up to 12 processor cores and speeds up to 5GHz Turbo. You can add up to 64GB of DDR4 RAM and GPU support for up to 8 monitors. Our Phase Change Cooling ensures your system won’t overheat no matter how demanding the work.
The Falcon F-37GT is a great choice for those who know how to trade and want a machine with power to spare. You get an Intel i7 processor with up to 16 processor cores and speeds up to 5.4GHz Turbo, enough to handle heavy trading without costly crashes or lag time. The F-37GT can take up to 128GB of DDR4 RAM and you can add a graphics card with support for up to 8 monitors.
The Falcon F-1 is the trading computer of choice for those who want the highest performance and reliability. The F-1 uses an Intel Core-i9 processor with up to 24 processor cores, speeds up to 5.8GHz Turbo, and custom water cooling that keeps your processor running at top speeds without overheating. With up to 64GB DDR5 or 128GB DDR4 RAM and the ability to run up to 16 monitors, the Falcon F-1 is our top of the line trading computer.
If you want to learn to trade and are looking for a trading laptop, you need to consider factors like processing power, multiple screens, and upgradability. Here are some computers that are specially designed to handle the demands of day trading for beginners and experienced traders.
The Falcon F-10 is an excellent choice for those who prioritize portability. It is lightweight, making it easy to carry while traveling. Yet it also has a large 15.6-inch screen that is conducive to reading charts and running simulations.
It comes with an Intel Core i9 13900H processor, 16GB DDR4 RAM, and a 500GB M.2 NVMe SSD for storage, along with an NVIDIA GeForce RTX 3050 graphics card that can support two monitors in 4K resolution.
If you are a gamer who wants to learn how to day trade, the Falcon F-15 is the laptop for you! The F-15 is great for trading, and it’s also a popular option for gamers due to its large 17.3-inch screen and custom specs that provide incredible performance.
It comes with an Intel Core i9-13900HX processor, 32GB DDR5 RAM, a 500GB M.2 NVMe SSD, and an NVIDIA GeForce RTX 4060 graphics card, which supports three monitors.
Our top-of-the-line Falcon F30 is a high-speed, high-performing mobile computer that is perfect for day trading. Its 12th Gen Intel Core i9-12900K processor has the power to handle anything you throw at it, and its NVIDIA GeForce RTX 3060 graphics card can support up to three monitors.
The machine comes with 16GB DDR4 RAM and a 500GB M.2 NVMe SSD for storage but is upgradeable so you can add RAM or a larger SSD as you learn how to trade.
Now that you’ve looked at trading computers, you want to know how to get started. Day trading for beginners has a learning curve, but once you get the hang of a few software packages you’ll be trading in no time.
Trading Platforms and Charting Software
Trading platforms like eTrade and Robinhood and charting software like Webull and Market Trader provide real-time market data, advanced charting features, and fast order execution, which are necessary for making informed trading decisions and taking advantage of short-term market movements.
Automated Trading Systems and Algorithms
Automated Trading Systems and Algorithms like Trade Station and NinjaTrader can be useful in day trading because they can execute trades quickly and consistently without being influenced by emotions. They can also analyze large amounts of market data and identify trading opportunities that a human trader might miss
Backtesting and Simulation Software
Backtesting and simulation software like TrendSpider and Tradewell can be useful in day trading because they allow traders to test their trading strategies against historical market data without risking real money. This can help traders identify potential weaknesses in their strategies, make adjustments before trading on the market, and provide valuable insights into the performance of the strategies in different market conditions.
Tips Experts Wish They Knew When They Started
Multiple Avenues of Knowledge
1. Read Books and Take Online Courses
There are many books and online courses available that can help you with learning how to day trade. Look for reputable trading resources that provide practical advice and strategies.
2. Find a Mentor
Look for an experienced day trading guide who can guide you and answer your questions. Online trading communities and forums can connect you with seasoned traders who are happy to share their experiences.
3. Join a Trading Community
Trading communities like FXGears and Trade2Win are a great place to build a supportive network of fellow traders who can offer advice, insights, and tips on how to day trade stocks. You can also find fellow day traders on social media like LinkedIn and Facebook as well as in chat rooms dedicated to day trading.
Refining and Building Your Skillset
Practice With a Demo Account
One of the best and safest ways to learn how to start day trading is by using demo accounts that allow you to practice trading with virtual funds. This is a great way to test your trading strategies and learn how to day trade with your trading platform before risking real money.
Stay Up-To-Date With Market News and Analysis
Markets are constantly changing, so it’s important to stay up-to-date on the latest news and trends. Financial news websites, social media platforms, news and data on trading platforms, and economic calendars are some of the sources you can use to identify new trading opportunities and refine your trading strategies over time.
The Bottom Line
To truly learn how to day trade, you need a reliable trading computer that is up to the rigors of trading and can provide you with all the data you need across multiple screens. Our computers are designed to handle day trading for beginners and experts and are used by many professional traders. Check out our Falcon trading computer reviews to read testimonials from people who make their living using our computers.