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So what is the perfect setup?

I often get asked about my setup, the tools I use and how many screens are best, etc…

Well, in truth it really all depends on how you trade. If like me you’re drilling things down to a very narrow criteria, and are only focusing on a very specific couple of strategies then you really want to keep it as simple as possible. I currently trade from a desktop with two 24″ monitors, and for the most part this does the trick. I could certainly entertain the addition of a third monitor, but whilst it would sometimes make things easier by negating the need to tab over, it isn’t completely essential. As long as the most important information is visible and or very easily accessible then you’re fine. Some traders employ several different strategies and/or have different methods at various points in the day, so having all this info showing at all times means multiple monitors up and news feeds a’rollin so you can track it all, and pounce when the time comes! With my style this would be overkill, but for others the more charts showing the better.

With thousands of stocks available to trade how on earth do you pick? Well, again I try to keep it all as simple as possible. I use Trade Ideas Pro for my stock scanning, and TC2000 for my charts. I will also refer to finviz to check for any news/announcements/insider buying, etc that may be acting as a catalyst for any pricing action as this may sway my decision when selecting/discarding stocks for my morning watch list. As I’ve mentioned before I look for a very specific criteria to be met, and if this isn’t happening, then I ain’t trading. Trying to force a trade simply because you want to trade is nothing more than gambling on it going one way or the other… and if you let the “fear of missing out” influence your decision process then you’re very likely to sustain unnecessary losses. My morning watch list is usually 1-4 stocks maximum, and if none of those end up setting up in the way I want them to then I won’t trade. I may just sit back and watch my scanners for something else fitting my style to pop up. Discipline is so important in trading. Sometimes the best trade of the day is no trade at all… seriously.

There are so many different methods and techniques, and some will suit you more than others. Trial and error will soon help you to discover what is most comfortable for you. If you follow a trader who can seem to scalp 10-20 cents in the first few minutes of the open with 5000+ share positions, and walk away from the market with his/her $500-$1000 it doesn’t necessarily mean you can copy/paste the same method/results in real time. Some traders will have a very different risk tolerance to you, and possibly a better or more experienced understanding of the pricing action and level 2 so they can make faster decisions on when to execute the entry/exit. That’s why you should never take a trade just because someone else has. They may also have the advantage of using hot keys to get in and out of the faster moving stocks whilst you’re trying to manually punch in the order. My point is, whilst it can be very useful indeed to see what others are doing, and to learn from their methods and skills, you will still need to develop your own style and strategy. Ask questions, watch tutorials and read all you can to improve your skills, but ultimately you need to be self sufficient as a trader. For me, the whole point of trading stocks, the romance of it is that you are reliant on nothing and no one! It’s just you, your screens and the market. Well, maybe coffee too…

TIP: Once you find your preferred method, stick to it and master it and just focus on that. Try for a month to make just one trade a day. If you only have one chance would you waste it on anything other than an absolutely perfect setup?

Let me know about your style and setup, and if you have any questions please comment below, I’d love to hear from you.

All the best,

Al

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