3 Steps To Set-up Your At-Home Trading Station

Trading seems to be all the rage nowadays. While it definitely isn’t for everyone, I’ll share the 3 steps I use to trade the US markets even while holding a full-time job.

Quick disclaimer though: I have stopped using these trading systems since 2020, but this article might contain some ideas/mindsets that might be useful for those looking to embark on this journey. 

The Home Trading Set-up

It was pretty simple. I did not require multiple screens nor super fast internet speed (as my trading edge was not based on speed).

All I had was a single laptop with normal internet access, scanning/back-testing software and Application Programming Interface (API) connectivity to my broker. Overall, it was just a small working space.

Step 1 – Select all stocks that fit my criteria

For stocks selection and back-testing, I used  the software Metastock.

Metastock offered several products, depending on the needs of the trader. 

Its top products are: 

1. Metastock Pro (For real time traders)
2. Metastock Pro FX (For currency traders)
3. Metastock End of Day (For End-of-Day traders)

I had previously used Metastock Pro in my past jobs to back-test trading strategies. While this offered real-time tick data, it was rather costly.

My home trading systems primarily scanned end-of-day closing prices and did not require real-time data.

Hence, I purchased the MetaStock end-of-day traders package, which was sufficient for my home trading needs. It was also much cheaper.

I recommend using Metastock for those starting out. (not sponsored!)

Metastock has a free 30 day trial. Just before the trial ends, you could send an email to inform your intent to discontinue. They would typically reply in a day or so to confirm the discontinuation. 

One area which I personally think makes them stand out strong is their customer service. It is exemplary.

For example, when I initially got started, I requested to extend my free trial. Although it was technically not allowed, they put in the effort to provide alternative solutions which I really appreciated.

Step 2 – Compute price levels & number of shares I was willing to trade for each stock

My next step would then be to compute:

1. Buy/Sell Price levels I was willing to transact at
2. Stop Loss Order
3. Take Profit Order
4. Number of shares (based on amount I was willing to risk per trade)

For a buy order, it generally looked like this:

And for a sell order, it generally looked like this:

The way I computed these prices and quantities of shares was using a spreadsheet (Microsoft Excel) and its programming language, Visual Basic Application (VBA).

These mathematical computations were critical for my risk management framework as it defined my limit order prices as well as the corresponding stop (profit & loss) orders for every trade I put on.

That eliminated 100% of the human guesswork and emotional responses.  

Trading was now just a set of rules which the algorithm followed.

With the computed prices and quantities of each stock, I was now ready to proceed to the next step.

Step 3 – Submit the orders to my broker via API

I chose Interactive Brokers for two main reasons:

1. Ease of access to their trading APIs. They made it very easy for even newbies to access their trading APIs
2. They had competitive commission rates compared to other brokers

For their API, they offered a wide range (Python, C++, C#, DDE etc) for application development.

The one I finally decided on was the “Dynamic Data Exchange (DDE)” which allowed me to submit orders via an Excel template. It was the simplest of them all, which was perfect for me, as I did not have much development experience.

What was my daily trading routine like?

As it was 100% mechanical, it was actually pretty boring. There was no guesswork, hoping or fearing.

As you can see from these 3 steps, the daily process was standardized and void of human decision making.

Here is an example of my daily routine

1. When I was back home after work, I ran Metastock to scan the markets and selected all the stocks that fit my criteria.

(During the scan, I shower and grab my dinner)

Time taken = 20min

2. I then transferred the list of stocks from my previous step into my spreadsheet and run my own algorithm (VBA) to compute the price levels and quantities of each stock.

Time taken = 3min

3. I then submitted all orders to my brokers

Time taken = 2min

4. I would also do a sanity check by viewing the price chart of each submitted order to validate the entry and stop loss levels. 

Time taken = 5min

5. If there were major events occurring which could potentially create a volatile market open, I would hang around at market open just to be sure.

That’s all. My daily trading activities were usually completed in about 30min.

Overall, this systematic way of trading provided me with the much-needed framework for consistency and allows trading decisions to be data driven and void of human emotions.

Once I internalized this belief, it changed my perspective drastically. 

My focus was no longer on making money every day.

Rather, my focus shifted to executing my trading systems properly every day. By doing so, I knew that in the long run, money could be made.

That made me a consistent and much happier trader.