Guide to 6 Day Trading Tools (Plus Important Skills)

Updated September 30, 2022

Day trading is when financial professionals buy and sell financial instruments within a one-day period to generate profits. Professionals who work in day trading often use a set of tools that help them make the best stock decisions and succeed in their roles every single day. If you're interested in day trading, it can be helpful to learn more about common day trading tools that may lead to your success.

In this article, we discuss day trading and day trading tools, review why you may use these tools, examine a list of six day trading tools and explore skills that may benefit the role.

What is a day trader?

A day trader is a financial professional who quickly buys and sells financial assets in an effort to make profits and mitigate the risk of losing money due to any daily stock market changes. They often work independently or for a large financial institution as an official day trader. In this role, day traders spend each day buying and selling financial assets, both of which include short and long trades. Typically, a day trader keeps a financial asset for a couple of seconds through a couple of hours, then finalizes their sales by the end of each day.

Specific duties for day traders can vary depending on their place of employment, but all involve conducting stock trading and facilitating sales and trades for the good of their own finances or that of their company's. Common day trader responsibilities usually include:

Monitoring stock market trends
Purchasing stocks
Conducting trades at a fast pace
Tracking fluctuations in the economy
Funding trades
Selling stocks

What are day trading tools?

Day trading tools are industry-specific programs or accessories that assist day trading professionals in their responsibilities. They may help secure the most current stock market information and provide information essential for their decision-making. These tools generally consist of different types of software, electronic devices, calculators and technologies that help perform calculations, track data and analyze data.

These tools often allow day traders to increase their job performance by providing them with advantages and opportunities, such as detailed insights into the stock market, that they wouldn't have otherwise. They can be especially helpful to novice day traders who don't have as much experience with trends and forecasting.

Why use day trading tools?

You may use day trading tools for a wide variety of reasons, including:

Performing calculations
Facilitating stock trades
Determining which stocks to trade
Storing and saving certain financial assets
Researching market and economic trends
Moving funds

6 day trading tools

There are a variety of different day trading tools that professional can use in their work. These tools range from electronic and digital tools to manual tools and typically include:

1. Stock-scanning software

Day traders often use helpful stock-scanning software to assist them in finding specific stocks to trade. This type of software typically allows day traders to set criteria and specifications that identify which stocks to trade. They can search for criteria such as biggest gainers or losers, volume spikes and bull flags.

2. Online brokers

Day traders need an online broker to facilitate their trades and allow them to function in their role. In most cases, professionals in this role have access to several online brokering tools, so they can use the one that best fits their specific stock trade needs. Financial companies typically offer online brokering tools and software for day traders to choose from, but they may set higher commissions and offer less customization. Smaller regulated brokers may offer lower commission or zero-commission trading. Brokerages use different types of software and have access to different markets, so make inquiries before choosing.

3. Stock market dashboard

Being able to view different aspects of the stock market at all points in time is typically a necessity for successful day trading. Because of this, day traders often use stock market dashboard tools that compile daily stock and market information and present it in one easily viewable and accessible dashboard. This allows for a simple and efficient means of increasing awareness of changes in the stock market.

4. Digital calculators

Both simple and advanced scientific calculators are essential for performing day trading calculations. Professionals in this role often have both types of digital calculators easily accessible to perform quick calculations and determine how much money they may generate or lose when trading stocks. Typically, day traders have these tools both on their computers and their mobile devices, such as their tablets and smartphones, for instant access.

5. Day trading software

Day trading software is one of the essential daily tools of a day trader. This software facilitates the trading of stocks and movement of funds. There are typically several types of software that day traders use to help them succeed in their role, including:

Charting software
Online brokering software
Scanning software

6. News dashboards

It's often important for day traders to monitor any breaking news as it pertains to the stock market. Doing so can increase their awareness of market and economic fluctuations and the opinions of field professionals. Because of this, day traders often use news dashboard tools that compile specified news websites so professionals can easily view relevant articles.

What skills do day traders have?

Typically, day traders share a common skill set that allows them to succeed in their role. Usually, this list contains both hard skills, including field-specific and technical skills, and soft skills, such as:

Analytical skills: Day traders are required to analyze market and economic trends so that they can make educated trading decisions. Their analytical skills allow them to understand trends and take quick, decisive actions.
Math skills: Being able to quickly and effectively perform mathematical calculations and understand statistics is critical to success as a day trader. An advanced understanding of math is usually a requirement for the role.
Critical thinking: Lots of trading scenarios require day traders to review context and external factors so they can make the best trading decisions. This often requires them to have excellent critical thinking skills.
Decision-making: Day traders are responsible for making quick, educated decisions about finances and trading stocks, so they're typically skilled in decision-making.