Five Steps to Becoming an Online Day Trader

Serious online trading, like skydiving or other extreme sports, is not for everyone. Whether you call it day trading, active trading, hyperactive trading, or sophisticated trading, the most fundamental advice we can give you is this: know what you are doing! You must be able to bear economic loss, as there can be no assurance that you will be successful.

Day trading has recently hit 2 billion shares a day. Some traders - generally serious investors who are hungry for data and value high-quality information, investment tools and research - realize how important it is to do their homework and research the companies and sectors in which they're trading. Others act like they're at a Las Vegas casino, throwing their chips on the craps table and hoping for the best. These people, sometimes called hyperactive traders or "market addicts," want low cost trading, a simple interface and fast executions. Their trading is so frequent, they don't even want to have to re-enter their password for each order.

To become a successful trader, one needs a high level of self-discipline, the ability to make sound decisions, an overall optimistic outlook, and, perhaps most of all, a burning desire to succeed and the ability to absorb losses. It helps to work from the best possible day trading site. After all, it's your money on the line. The better your tools, support services and the site's emergency back up system, the more in control you'll feel. If you've got the confidence - and the stomach - to enjoy the turbulence of online trading, or at least take it in stride, the rewards can be amazing, but so can the losses. Here are tips to help you succeed, although no assurances can be given, from

1. To be an excellent craftsman in any area, in our opinion, one needs talent, knowledge, experience and the essential tools of that trade. Trading online is no different. A serious trader should have specialized tools. These include NASDAQ Level II quotes and access to execution reports that are fast and informative. Level II screens let investors monitor real-time trading patterns in NASDAQ stocks. Level II screens not only display the "inside quotes," which are the best "bid and offer" (ask and sell prices) for a stock, but also show all the various levels of bids and offers that each market maker is presenting. This advanced technology is now available to active Internet investors at, at a cost. However, it's available at no cost for clients who execute 100 or more trades per month.

2. In the world of the experienced trader, when seconds can mean thousands of dollars, fast trade execution is the name of the game. Your ability to execute trades quickly allows you to level the playing field and interact like a pro. Keep in mind that the simpler the online execution process, the less chance that either data entry error or human error will affect your trade. You'll also need access to a software application such as CastleOnline's non-browser based, proprietary JavaTrader 2000 software, which is a tool that is used to simplify the online process. Also, a dial-up Internet service provider (ISP) such as America Online can be used for your Internet connection. However, we recommend a high-speed Internet connection - for example, a cable modem service connection from your cable provider or a DSL connection from your local telephone company.

3. Your home computer only needs a Pentium 233 processor with 64 mb of RAM and Windows 95, 98 or NT. However, a PII300 MHz or faster processor and 128 mb RAM is highly recommended. Just as a high performance car needs premium gas, your online trading service needs high-speed connectivity - ideally access to a T-3 fiber optic connection.

4. Many market makers have their own automated execution systems, while others use NASDAQ workstations. There are also electronic communication networks or ECNs that act as virtual market makers. The "route" of an order refers to its direct connection to a particular market maker or ECN's computerized execution system. The ability to choose where orders are being routed provides substantial power to the trader. The discretion to route orders can be beneficial, as traders can thus decide for themselves which route has the better execution response for an individual stock. Being able to route an order, in our opinion, is the difference between using a slingshot or a laser precision tool to hit the target - in this case obtaining the best price for your order.

5. An online customer service instant-chat feature is critical for the feedback you need. Using the customer interface via CastleOnline's JavaTrader, you can immediately access the essential technical support for the software that any serious trader should have. You can, for example, get direct answers to any questions or problems from CastleOnline's knowledgeable staff, without tying up another phone line. When you have a question about the status of an order, or any other question crucial to your "transaction," your trading system's online customer service feature can become the safety net or the skydiving parachute you need!

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