The web is littered with thousands of programs, newsletters, and websites purporting to have something to give a stock trader an edge in finding stock trading picks that work better than what they can find on their own. Some of it is free, but the majority of it requires some form of payment. Either way does not matter, what actually matters is if the tools have any merit at all in finding good day trading stock picks.

What you want to avoid are any tools or software that is highly user dependent. What I mean by this is if you put the tool in the hands of the developer or expert, they can tell the nuances of when it should be used and when it should be ignored, given a certain set of circumstances. This type of tool is very hard to learn because as a new user, you have no idea about these nuances. Most of the time, it is this little fact that makes a tool work, or more likely, NOT WORK. Examples of this abound all over the net. Most any software with trading tools and indicators falls into this category.

On the other hand, you have a set of websites and newsletters that do all the work for you. No guesswork involved, nor user skill involved much. Simple and straightforward. This type of tool is great IF it can be determined ahead of time that the site or tool ACTUALLY works as its advertised to. While the stock market is a constantly changing beast, a tool or method of picking day trading ideas should be somewhat consistent no matter what is going on. Sure there will be times where its really in sync with the market, and times where its off. But there should be no times where it performs so poorly as to completely nullify any gains made during the good times.

With this said, it requires a decent amount of research prior to using any outside tool to assist in finding trading ideas. After all, you are in the market with real money, and can lose real money quickly if you don't know what you are doing or are relying on something that just does not hold up over time. This is why more and more people are looking for a stock day trading system to help them be consistent in their behavior and trading.

Before the start of each day, every one who is a trader, or aspires to be one should do a scan of all current news out for the day, and in addition, news that may be released later in the day. Key stuff here would be economic data, which is usually released at 8:30am EST and 10am EST, but can vary. This type of data has the ability to swing the market wildly, if the outcome is not what the market predicts, or even if its spot on, but its viewed as the end of a certain trend in the data that the market has been following.

In addition to economic news, you should be aware of the major earnings reports due out each day, both premarket and post market. This too can definately affect the trading activity in individual stocks, and at times, the market as a whole. There are many news services that are available, but most people will get some sort of news feed with their trading software or brokerage account. The big issue here is the quality of the news. Often times people dont want to pay for news, they want everything for free. What you should be interested in is the quality of the news. Meaning why would you watch a 3rd or 4th tier news feed (feeds that either repost from other major feeds, or contain stories that not that many people follow). After all, the reason to watch news is BECAUSE it can move stocks. There is no reason to watch news that does not have this ability.

The biggest news feeds are Dow Jones, Bloomberg, and Reuters. If you are skilled at reading and interpreting the news, you will want these news feeds. Personally, I have so many things going on I cannot sort through all the news and dont have time to stare at the news screen. This is where news aggregators come in. The two biggest are Briefing.com and Trade the News. Both of these have people on staff that read and interpret news super fast and then only post the actionable news. Trade the news even has an option to have an analyst read the news aloud that is deemed important. Both save a lot of time, and overall are very good.

When looking to trade the market, most people dont realize there is a difference in the time of day that definately affects how stocks act. Not using this information makes it harder to make money through any type of trading, short term, long term, or even day trading. In addition to time of day, whatever method you employ, whether a trading system or just some tools, will also have certain times of the day where they tend to work better or worse. This type of action can only be discovered by tracking the signals or stock picks that are flagged, then seeing over time when the best use is.

The first 30 minutes is usually the craziest time. Stocks will have bigger swings, up and down as a lot of times there are not established orders from larger mutual and hedge funds in the names to counter this volatility. It is a great time for daytrading and short term trading of stocks because of the increased volatility, but with that also comes increased risk of a stopout. Also there is not much in terms of support and resistance created yet, but you can look at the last hour of the prior day for guidance there. Sometimes using a stock trading system can be of assistance when the market has increased volatility, assuming you have thoroughly researched and tracked the trading ideas it might send out.

From 10am EST until about 11:30-45 EST is prime time for trends to develop. These times are not exact, and shift around some but in general this is when a decent, continuing trend will try to develop. Also the volatility calms down alot, making it easier to put in a stop that is closer to the actual price when day trading. For longer term investing, usually this is not the time to make a decision on entrance, its too early in the day. The exception would be an entrance based off of daily breakout of resistance or support, or some key fundimental data that is just starting to push the stock. Entry when that happens is ok during this time.

From about 11:30 until 1:15pm EST stuff usually slows down alot, and fake moves can happen. What I mean by fake moves is stuff will look weak, then rally up sharply, or stuff will look strong (like it will continue) and then abruptly sell off. Most of this is just due to decreased volume and liquidity. Program trading bots and Algorithm trading bots love this period of time. Basically they try to fade every move. This also makes it very difficult for most traders, as it will seem just when a move gets started, it abruptly ends. Of course there are enough names that do really move and keep going, but these are impossible for the most part to sort out from the ones that stop and reverse until the move is too late.

Stuff will generally pick up after 1:15 for about 45 min or so, then slow down again near 2pm EST. 2:30PM EST (for whatever reason) is a key time to watch. Countless times the market will put in a top or bottom near this time and then reverse into the close. Does it happen all the time? no. But it does happen enough of the time its well worth paying attention to. Volume should pick up after about 3-315 EST into the close, whether there is a 2:30 reversal or not. This is again a good time for short term trading, AND its good for watching for longer term additions as you can see if the stock is holding gains, pushed above key resistance, has made a major reversal on daily chart etc.

Most people have heard of the futures market, and it does get mentioned on news shows such as CNBC or MSNBC. However, a lot of people dont understand what the futures market is. Its actually quite simple. The futures market is simply a bet on where an index will be as of a specified date in the future (hence futures market). It is no different than saying " I think GE will be 5 points higher in 3 months". Now imagine thousands or people, or even hundreds of thousands all betting on where GE will be in 3 months. Not tomorrow, 3 months from now.

This aggregate valuation call would be considered a futures market. It may be higher or lower than where GE is now, but you also have to consider the people have 3 months to be right - that is a lot of time. This time has a value - the more time you have to be right, the easier the call is. So the market puts this time value into the price of the futures, and each day that goes by a bit of it decays (goes away) as it gets closer to the 3 month time. This 3 month time in this example is a fixed time, it does not scroll forward. So if the bet is the 31st of July, 2 weeks from now the GE bet would still be based on the 31st of July, but the time value associated with that bet would be a bit lower because there is less time left to be right (or wrong).

This basic concept is then carried over to the stock indexes. People make bets based on all available information, and bets based on anticipated information and research for where the indexes might be in the future. One thing to remember is at the expiration date, the futures contract AND the cash contract (the index) will be identical. So if the S&P 500 index is at 1400 on expiration, so will the futures contract trade to this price. Because of this fact, there is what is called arbitrage between the 2 (cash vs futures) since they trade separately. I can make a bet on the futures market (buying or selling) without doing anything with the cash index. On the same note, I can buy a large basket (or sell) of stocks in the index, without doing anything with the futures market. This give and take causes the 2 of them to fluctuate independently.

If the futures get too high (people buying futures but not stocks), there is free money there since at expiration futures and cash are equal. So you can sell the futures, then buy the basket of stocks that make up the index and lock in free money if you hold it until expiration. By selling the futures, you have agreed in principal to sell the basket of stocks comprising the index at that futures price. If the futures are 1430 and the cash is 1400, and the time value is 20, theoreticaly the futures should be at 1420. At 1430, I can sell the futures, then buy the stocks and lock in 10 points for free. In reality its not this easy, but this is the basic concept.

Most people who want to trade, or are beginning to trade the markets (less than 3 years) usually try to search for tools to help them win. They go from program to program, attend seminars, get books, and generally are searching for the holy grail idea that will unlock the mystery of the markets and make the millions. They see enough stuff that "kind of works" that it continues to lead them down then path to find perfection.

In reality, this perfection does not exist. Even if you had a trader sitting next to you who makes 10 million a year day trading, you would find that the nuances of knowing when to trade and not trade and stock selection are the true keys. There is no holy grail indicator or program that leads to mass riches. Sure they may use tools to assist them, but basically most of the success of any trader is knowing the proper exit strategy and money management. Almost everyone is always interested in the perfect entry point. Why? Because frankly, it sucks to buy some stock and immediatly lose money and have that continue. That initial pain leads people to try to minimize it through this search for the perfect tool. This perfect tool does not exist, but through thorough research on the web, including reviews of stock trading systems and indicators, some decent stuff can be found.

Even if there was a perfect tool, the key to anything (profit wise) is how to get out. A perfect tool will predict an uptrend (or a downtrend) which will happen, but unfortunately the MAGNITUDE always gets in the way. Does the stock go 1 point up then sell, 5 points, or maybe 15 points? No one really knows until hindsight, but a skillful trader will have a gut feel based on many factors. This is where skill comes in, money management and the other finer points of trading experience.

So you have a perfect tool that can call turning points, but its still possible to lose money. How? Easy. If you have no clue how much money you should target, its easy to have a winning trade turn into a losing trade. You think it can move 3 points, but after 75c it starts going down. Fine, the tool predicted the push. Even stocks that go 15 points up never do it in a straight line. Its always push, backfill, push, backfill.

The issue here is a 15 point winner and a .75 point winner look identical in the beginning. The only difference is the 15 point winner turns around after the selling, pushes higher to a new higher high, then repeats the process. And even a 15 point winning trade may go against you some. So the .75 winner now goes against you. Then a bit more. Then the market sells off, and that accelerates. Eventually it hits your stopout point. But I have a perfect tool? How can I lose? Exactly what happened here happens every day and is exactly why there is no such thing as a perfect tool or indicator.

This scenario usually filters a lot of people who want to trade out of the market (of trying to trade the market). Even though there is no such perfect indicator, people are trying -and think they have found it - every day. The traders that stay around longer term realize that chasing this holy grail idea is a waste of time. Its much easier to find some decent ideas for scanning stocks (to filter them), using some money management and skills to make some money.