Types of Brokerage Access Platforms for Day Trading - dummies

Types of Brokerage Access Platforms for Day Trading

To get stock market information and place your day trading orders, you will need a computer platform to communicate with your brokerage firm’s systems. The conduit is the Internet, but you need a way to get your orders to it. Some brokerage firms have their own software that you can use; others allow you to log in through a website.

Software-based platforms

With a software-based platform, you must download and install the brokerage firm’s proprietary system onto your computer. When you’re ready to start your trading day, you connect to the Internet first, launch the software to see what’s happening, and place your trades. Software systems generally offer more features and analytical tools than web-based platforms, but you can only trade on a machine that has the software loaded on it.

Web-based platforms

With a web-based trading platform, you go to the broker’s website and log in to trade. With these types of platforms, you can trade from any computer that has Internet access, which is a boon if you travel or work from several different locations. In exchange, you may give up some of the analytic and backtesting tools offered through software-based platforms.

Note that web-based platforms may be designed to work on specific web browsers. Given the importance of having a stable connection and full functionality in a fast-moving market, if the firm recommends using Internet Explorer, accept that. Don’t cling to a preferred alternative.

What about mobile platforms? Some brokerage firms allow you to get price quotes and place trades through a mobile phone. This capability may be useful to some people, especially as a backup system, but relying on it solely is a bad idea for most day traders.

Day trading is a business, and that means you need some discipline about setting regular hours and working from a regular workspace. You’ll probably need more information to work a trade than will fit on your phone’s screen (most day traders work off more than one full-sized screen, in fact).

Finally, you need to take a break from the market to maintain balance in your life. If you’re making trades at your cousin’s wedding, as the funny man may say, here’s your sign.