Advanced Techniques in Day Trading: A Practical Guide to High Probability Day Trading Strategies and Methods

Trading Platform

An electronic online trading platform is a computer software program that is used to place orders for day trading. The trading platform is different from the direct-access brokers themselves. However, I see often that traders confuse these two as one. The trading platform sends and places your order at the exchange so your direct-access broker can clear the order for you. Usually, direct-access brokers offer their own proprietary trading platform to their clients. The quality, charting capability, speed of the software, and many other features regarding the software, varies significantly, which also of course affects their pricing. Many brokers offer their platform for a monthly fee, but they may waive that fee if you make sufficient commissions for the broker. For example, Interactive Brokers offers a trading platform called Trader Workstation (TWS), but it also allows you to use the DAS Trader platform. Lightspeed Trading also offers its own platform called Lightspeed Trader. TD Ameritrade’s own software is called thinkorswim. SpeedTrader uses DAS Trader as its platform.

The table below summarizes some of the well-known direct-access brokers for day trading. Please note that there are many more firms that are not listed below.

From the brokers listed in the table above, I personally prefer SpeedTrader and Interactive Brokers (IB) as my broker and DAS Trader (www.dastrader.com) as my trading platform. I also have a smaller account with CMEG at the time of writing. My broker, Interactive Brokers, offers their own platform called Trader Workstation or TWS, which I do not recommend for day trading. The DAS Trader platform is one of the four Nasdaq Platinum Partner order entry platforms that offer the highest level of efficient execution and market functionality for online traders. As mentioned earlier, DAS Trader is not a broker, it is only a trading platform, so I linked my IB trading account to it. When I enter my order in the platform, DAS will send my orders to Nasdaq data centers and Interactive Brokers, as my clearing firm, will fill my orders. I pay my trading commissions to IB and a monthly fee to DAS Trader for using their platform and providing me with a real time data feed and Level 2, which I will explain later in this book.

Platform Settings and Chart Indicators

In this section, I explain my DAS Trader Pro platform settings and various windows and tools within it. If you are using other trading platforms, many of these features are still relevant as most of these platforms are similar in terms of layout and functionality, however some may be a bit different. It is best to consult your trading platform software provider for details on some of the features I discuss here. Most of these software programs have excellent starter guides and online video and educational materials that are provided free of charge to the user. I encourage you to spend some time studying the reference materials in order to become familiar with every aspect of your platform.

Figure 2.1 below shows the typical layout of my DAS platform. I will walk you through each window, one by one, and explain how I use them.

Figure 2.1 - Screenshot of my DAS trading platform layout: 1) Top List, 2) Watchlist (or Market View), 3) 1-minute and 5-minute charts, 4) Time and Sale, 5) Montage (or the so-called Level 2).