Keeping it simple

Trading is not as complicated as you may think. Although there are a myriad of trading apps, charts and record-keeping software out there, often it is the trader that keeps things simple who gets ahead in the end.

Personally, I have not needed any fancy charts or additional software to trade. In fact, it is refreshing to not have to use several different programs each day. I used to work for a multinational corporation and it is my opinion that big businesses like to complicate things with bells and whistles. Sometimes having the latest technology can make you feel more productive, but in my case it was a distraction from the end goal itself – that is to do the work and be profitable.

Brokers

In order to trade, you will need a broker to place your orders in the market. Often we are asked “Which broker is best?” Personally I think different brokers are good at different things and add value in different areas of trading. Some may offer advanced trader education, free charting software, DMA or one-click trading etc. But one key factor of choosing a broker is your fund safety. There is no crime in having more than one brokerage account, but I would caution against taking the same trade on different accounts as this would increase your total risk to more than 1% of your trading capital.    

Charts

The next thing to consider after choosing a user-friendly broker is your charting package. Charts are graphical representations of price action and since we are technical traders, we need decent charts when studying and analyzing market movements.

What does a basic charting package need to have? For me there are four points to consider: 1. Reliable data feed, 2. Must be customizable, 3. Must have built-in technical indicators and oscillators, and 4. Must have drawing tools.

An example of a marked up chart I use. Most charting packages can do this.

When you identify a potential trade set up, it is imperative that you keep a record of the charts before you place the trade. All you need to do this are…

Print Screen and PowerPoint

When we run trading clinics here at TWP, our clients send in screenshots of their trade set ups so we can see what they were seeing at the time they decided to enter the market. It’s as simple as having your charts in front of you and pressing the “Prt Sc” button on your keyboard. You can use some other screen capture tools to do that e.g. the Snipping tool that is built into Windows 7/8 etc. Then you go to a blank PowerPoint presentation and paste the copied chart there. PowerPoint is great because you can give the trade a title and note up the slide with further details on why you thought this would be a good trade. You could then save this file on your computer, and update it when you have your trading result.

Excel

This is not essential but it is a nice to have. I keep a simple spreadsheet with dates, instruments traded, entry and exit points as well as the dollar amount of profit/loss. Having a sheet like this, along with your PowerPoint files are invaluable in helping you improve and keeping your money management up-to-date.

Chances are, you will already have these programs on your computer and your broker is also most likely to provide decent charts for free (note: you may have to pay a data fee if you are trading equities on some exchanges).  

At the end of the day, the tools do not make the trader, it is the grey matter between your ears that does.

Happy trading!

Regards,
The TWP Team