Top 10 trading skills and tools you need to succeed

To be successful with day trading, traders need to be equipped with the skills and tools that will enable them to trade efficiently. The financial markets can be unforgiving and within a few seconds you can expect the markets to turn around.

While professional traders invest a lot of money into purchasing the right equipment and tools to hone their trading skills, for the average retail investor, not many can afford the luxury. Still, there are some ways that the average retail investor can still be ahead of the curve.

To be successful with day trading, traders should have a certain skillset and access to the right set of tools to achieve the goal of making money, day in and day out. With the financial markets, there are no breaks and the markets can reward those you dare to take risks.

Given the significance a losing trade or a winning trade can have in the market, traders, these days need to be sophisticated and ahead of the curve if they really want to take their day trading seriously.

In this article, we present the top ten trading skills needed for you to be successful as a day trader.

1. Access to the right trading platform

Trading has evolved over the years. While trading in the older days was confined to the trading pits, with digitization, trading is now done electronically. This means that traders need to have access to the right set of tools if they want to gain an edge.

A starting point is in having the right trading platform. There are many different trading platforms available for traders these days depending on the type of markets that they trade.

Most of the trading platforms are available for free depending on the brokerage that you use. For example, if you are trading futures, then you can have the choice to choose from the standard MT5 trading platform to the more sophisticated platforms such as Multicharts or NinjaTrader platform.

If you are just trading forex, then the MT4 trading platform is no doubt one of the best. A right trading platform will give you the ability to back test your trading strategies, manage your open positions and allows you to analyze the markets in ways that are familiar for you.

A trading platform must be flexible to suit your needs and demand.

When it comes to day trading, you might be tempted to ask what is the best day trading platform or app?

Truth is that there is no best day trading app or a day trading platform. Every platform is designed to suit a particular need and serves a certain market. Obviously, if you want to trade forex on a trading platform built for the futures market, you can see why it does not make sense.

The best way to find a trading platform or an app is to experiment with the platforms of interest and then make your own deduction.

2. Good computer

With financial trading now being mostly electronic, having the right computer hardware is essential. Without the good framework, even if you use the best trading platform, changes are that your system will not function to its full extent.

Given the fact that the financial markets are fast and always evolving, having a well configured computer or a laptop can mean the difference between a winning and a losing trade.

While trading platforms these days allows you to access your trading account from a web browser and even a mobile app, nothing beats the full functionality that comes with a downloadable trading platform.

For the platform to work efficiently it is important that you have the latest hardware set up such as good processor speed and high capacity of RAM to ensure that your trading does not get affected.

Some traders also make use of additional monitors. You might come across articles that will say that having two monitors is better than using just one. This depends on how big a trader you are.

For example, if you trade for just a few hours a week, or do not have a large capital, it does not make sense to invest a lot of money into building the top notch computer or using additional monitors.

While having a good computer is essential, try not to get too carried away. Typically you can make use of a tablet to complement your PC or your laptop in order to organize your trading.

3. High-Speed Internet

With electronic execution now almost taken for granted, having access to a good high-speed interest is essential. Without a good internet connection, you can expect delays for your orders to be executed.

For a day trader this could mean the difference between a winning and a losing trade especially when you get filled at the wrong price. A good internet connection is critical to the success of your trading journey.

Most traders take this for granted but the fact remains having good infrastructure is critical. It is also recommended that you have access to a secondary internet line which can act as a backup in case there are any connectivity problems with the first.

Your secondary internet connection can be as simple as the connection that comes with your mobile phone. Using Bluetooth, you could connect your computer to your phone and access this secondary line of internet in case of an emergency.

4. Access to the right information

Information is critical when you are day trading. It is often said that the price always discounts the news that is available. The financial markets, whether you are trading forex or futures, or equities always has some news or the other coming out.

This onslaught can constantly shift and shape the markets. As a trader, having access to the right set of information can be helpful.

You can subscribe to either a paid data feed such as the Dow Jones newswire or look to your broker who might already have built this feature in with your trading platform.

If you are very serious about your trading, you could also invest in some third-party news software designed for the financial markets. This will enable you to stay on top of the markets and you would always know what is going on in the markets.

However, be aware that information overload can also be confusing at times. Therefore, it is best to maintain a limit when it comes to the number of news sources that you rely upon.

5. Research & Analysis

Having good research skills is also an important skill that you should have if you want to be successful in trading the financial markets. To be good with research and analysis, you should have a fair knowledge about the markets that you are trading and the fundamentals that govern the prices.

Topping this off, having good technical analysis skills are also important. This can help you to combine the knowledge from the fundamentals and to build a solid trading plan.

A good research on the securities that you are trading will enable you to know when to trade and when to stay away from the markets. A good research is also helpful to keep your emotions in check especially when there is a losing trade.

6. Trading Discipline

Trading discipline is something that you cannot get out of the blue. It only takes experience which means time to hone your skills to maintain the discipline needed when trading the financial markets.

A disciplined trader is a lot better off than one who is not. When you are disciplined, you keep your trading emotions in check. This will ensure that you do not end up over-trading or taking on too much risk or just wait and hope that a losing trade will reverse and turn into a profit.

Trading discipline is essential if you want to maintain the profits that the markets give you. Many traders can make profits, but they end up giving back those profits to the markets, because they are not disciplined.

7. Trading Strategy

A good trading strategy is one of the key aspects that will determine the success or failure of your trading journey. Most traders focus on a trading strategy that gives them profits but they pay little attention to things beyond that.

A good trading strategy is one where you are very familiar with the markets and know the pros and cons of your trading system. Knowing in which markets you can use your strategy and what markets to avoid can keep you from making simple mistakes that could be easily avoided.

Traders often make the mistake of jumping from one trading strategy to another. This is acceptable only for a short period of time, until you discover what type of a trading strategy suits you better.

Not all traders are equal and therefore one type of trading strategy might not be suitable for another trader and vice versa. Once you discover a trading strategy that you are comfortable with, spending time to fine tune this trading strategy to suit your trading requirements and needs will play a long role in building consistent profits for you.

8. Risk management

Risk management and trading go hand in hand. If you are trading any kind of the financial markets, then chances are that you are already risking money. The key to efficient risk management is to ensure that you do not end up losing more than what you are risking.

Taking this a step further, a good risk management strategy is to ensure that you regularly keep the profits that the market gives you while ensuring that you do not leave too much risk on the table.

Risk management often comes into the picture only when a trader blows up their trading account. By then it is too little too late. A good risk management strategy goes hand in hand with your trading strategy.

9. Trading Capital

Having a good starting capital to trade with is essential. While this is not a skill, it is a requirement. Most traders, especially when it comes to the forex markets take the liberty of using high leverage. This ensures that they do not need to put up with large capital.

While this can be helpful to a certain extent, using too much of leverage can expose your trading capital to a lot of risk. This will eventually lead to you potentially losing more than the capital that you have risked.

Starting with a decent amount of trading capital will ensure that you are less leveraged, and it also helps you to bring in consistent and meaningful profits.

10. Learning

Learning is an aspect that never ends, and this couldn’t be further from the truth when it comes to the financial markets. Learning enables you to understand how the markets are evolving.

It can keep you in the know about new developments in the industry, new technical indicators and even new methods of analyzing the markets. When you are constantly learning, you are always on top of the latest buzz in the field.

With financial markets, which are always changing learning is an essential aspect. Although you might have your tried and tested trading strategy, it does not hurt to watch some webinars or try to understand how other strategies work.

There is a good chance that you might actually pick up a few skills and tips for trading from learning that you previously didn’t even think of.

It is also a good habit to read, from the financial markets to biographies of traders to everyone else that matters in the industry. Reading will open your eyes to new possibilities and eventually it will be for your own benefit.

In conclusion, the above mentioned top 10 skills and tools for trading are by no means that only ones. You will find that trading the financial markets requires a lot more than just the ten topics pointed out in this article.

To be truly successful, you must treat your trading as if it were business. This means doing constant risk assessment, self evaluation and knowing where your short comings are. Then, work on these short comings in order to develop yourself as an all round trader.


About Me

I'm Mike Semlitsch the owner of My trading career started in 2007. Since 2013 I have helped thousands of traders to take their trading to the next level. Many of them are now constantly profitable traders. 

The following performance was achieved by me while trading live in front of hundreds of my clients:

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