Day Trading Tools: What You Actually Need to Start (Scanner, Charts, Level 2, Broker)

Short answer: The day trading tools you need to start trading stocks are a broker account with fast order entry, a clean chart with VWAP and volume, a scanner that finds stocks gapping on heavy relative volume, a position size calculator, a trading journal, and a simulator to practice on first. Add a news feed, free access to SEC filings on EDGAR, and a steady internet connection. Level 2 and Time and Sales are worth learning early, but they confirm a trade rather than find one. Extra monitors, paid indicators, signal services and trading bots can all wait, and most beginners never need them.

I trade small-cap momentum, long only.

What do you need to start day trading? The checklist

1. A broker account that fits how you trade

Your broker is the one tool you can't trade without. For a small-cap momentum trader, four things matter: what an order costs you, how fast you can get an order in, whether you can see the order book, and which rules the broker applies to an active account. We compare brokers on those points in our guide to online brokers for day trading.

If you trade long only, like I do, you can ignore short-locate tools and borrow lists.

The order types you will use

You need three order types, and you need to know how each one fills. Investor.gov defines them plainly:

• Market order: "A market order is an order to buy or sell a stock at the best available price." On a fast small cap, "parts of a large market order may execute at different prices due to lack of liquidity at a price at the time of execution."
• Limit order: "A limit order is an order to buy or sell a stock at a specific price or better." You control the price, but "A limit order is not guaranteed to execute."
• Stop order: "When the stop price is reached, a stop order becomes a market order." So on a fast drop, your exit price can be lower than your stop.

Before you fund an account, check that your broker offers the order types you plan to use. Investor.gov's stop order bulletin notes that stop and stop-limit orders "may not be available through all brokerage firms."

Cash or margin, and where the PDT rule stands

The rules changed in 2026. FINRA replaced the pattern day trader rule with new intraday margin requirements, effective June 4, 2026. Under the new approach there's "no $25,000 minimum equity requirement for day trading", though $2,000 is still the minimum equity to trade on margin. Investor.gov adds the timing: the new rules "permit a transition period until October 20, 2027, for brokerage firms that need more time to comply." Your broker may still run the old rules on your account, so ask which set applies. Our PDT rule explainer walks through what changed.

A cash account is the simpler start. You trade only settled money, and FINRA notes that "The current settlement time for most equity trades is T+1, or the next business day." That limits how often you can reuse the same cash in a morning, but it also keeps you from borrowing to trade before you've proven anything.

2. Charts: keep them simple

You don't need a wall of indicators. Here is how I set mine up: "I keep the chart simple: price, VWAP, and a couple of moving averages."

What a beginner's chart needs:

• A few timeframes. The daily chart for the bigger trend and key levels, the 5-minute chart for the setup, and the 1-minute only for timing an entry.
• VWAP. It starts at the open and resets every day. When price is above VWAP, buyers are in control; below it, sellers are.
• Volume bars. A move on light volume and a move on heavy volume are two different trades.
• Pre-market highs and lows marked. Those are the levels the open trades around.

Check your broker's own charts before you pay for a separate charting tool; they may cover all of the above.

3. A scanner to find what's moving

Thousands of stocks trade every morning. A scanner narrows that to the handful worth watching. For momentum trading the core filters are gap percentage, volume and relative volume, which compares how much a stock is trading right now to how much it normally trades.

Then add filters to cut the noise: a price range, average volume, spread, and float. Float is the number of shares that trade freely on the open market, and on small caps a low float can mean fast, violent moves both ways. In my float guide I put it this way: "Float is one of the first things I check before I trade a stock". The full filter set, with example settings, is in our day trading scanner setup guide.

Look for real-time data during pre-market and the open, a relative volume column, float data, and alerts. Skip dozens of custom scans: three good ones beat thirty you never read. A scanner shows you where the attention is. Your chart and your rules decide the trade.

4. Level 2 and Time and Sales

Level 2 is the order book for a stock: the buy orders stacked below the price and the sell orders stacked above it, with the size waiting at each level. Nasdaq's own depth feed, TotalView, "displays the full order book depth on Nasdaq, including every single quote and order at every price level". Time and Sales is the other half. Fidelity's help page describes it as "both a streaming and historical view of individual trades in the market." In Fidelity's version, a print shows green when it trades at the ask or higher and red at the bid or lower. Other apps use their own color keys, so check yours.

In my words: "For the thin small-caps I trade, Level 2 is a tool I lean on to confirm an entry."

Know the limits before you lean on it. Large orders can be pulled at the last second or hidden, so a wall of shares isn't a promise. The book shows intent. The tape shows what actually traded. Some brokers include Level 2 and some sell it as a paid add-on. Learn to read it early, on the simulator, but trade from your chart and your plan first.

5. News and SEC filings

When a small cap is moving, you want to know why before you buy. A news feed covers headlines. The SEC covers the rest, free. Investor.gov says "The EDGAR database provides free public access to corporate information", including the filings that matter most to a small-cap trader:

• 8-K: a current report that "Discloses material events or information that the company chooses or is required to make public prior to its next scheduled quarterly or annual report."
• S-1 and S-3: registration statements to sell securities to the public. The S-3 is "An abbreviated registration statement available to certain already-reporting companies to register the offer and sale of securities to the public."
• 424B: the prospectus for an offering.

If a company has just filed to sell new shares while the stock is spiking, more shares may be coming into the move. Our guide to dilution and stock offerings shows how to read those filings.

Skip trading off social posts. The SEC tells investors to "use extreme caution when making investment decisions based solely on information found on social media platforms."

6. A position size calculator

As I put it in the Momentum Method: "Risk management is the whole job. Everything else is just finding the entry."

The rule I teach is the 1-2-3 rule: "risk no more than 1% of your account on a single trade. Do not enter without a 2:1 R/R. Stop trading at 3 losses." R/R means reward to risk. A position size calculator does the arithmetic for the first part:

Position size = account risk ($) ÷ risk per share

Here is a hypothetical example with round numbers:

• Account: $10,000. 1% risk = $100.
• Entry: $5.00. Stop: $4.80. Risk per share: $0.20.
• Position size: $100 ÷ $0.20 = 500 shares, a $2,500 position.

Tighten the stop so you risk $0.10 a share, and the same $100 of risk buys 1,000 shares, a $5,000 position. The dollar risk stays the same; the share count adjusts. If the share count costs more than your buying power, take fewer shares. Never widen the risk to fit the trade.

7. A trading journal

Log the setup, entry, stop, target and one sentence on why you took the trade. Write the reason before you know the outcome. After the close, mark whether you followed your rules.

A spreadsheet works. Pick a format you'll keep using, because a journal you stop using is worth nothing. Our trading journal template has the fields to copy.

8. A simulator for practice

My advice here never changes: "the first thing I tell every trader is to prove it on a simulator before you risk a dollar." Practice your order entry, scanner routine and stops there first.

Know its blind spot. In many simulators you get filled exactly where you click, with no slippage and no partial fills. Live small caps don't trade that way, so treat sim results as a test of your process and your discipline.

9. Hardware and internet basics

A reliable computer, one decent monitor and a stable internet connection will do. The SEC's tips for online trading point out that a slow or faulty computer or internet provider can slow or block your orders, and that in fast markets "delays can develop across the board."

Find out whether your broker takes orders by phone, save that number, and check what it charges for those orders.

What you can skip at the start

• Extra monitors. One screen is enough to learn on. Add a second when you know what you'd put on it.
• Paid indicators. Learn price, VWAP and volume first. On indicators, my view is short: "Piling on more indicators adds noise".
• Signal services and stock-pick newsletters. If you copy someone's picks, you skip the learning. The SEC warns: "Don't believe advertising claims that promise quick and sure profits from day trading."
• Trading bots and auto-trading apps. FINRA describes auto-trading as "a third party sending trading instructions directly to an investor's brokerage account for immediate execution", and warns that with services run by unregistered firms, "you might incur significant losses before you even realize that transactions occurred on your behalf."

What comes with a Momentum membership

Two of the tools on this list, the scanner and the journal, come with the membership. The live trading room runs from 8 to 11 AM ET, and members get the chatroom, the Momentum Scanner with alerts, the Momentum Journal, every session recorded, the nightly watchlist at 5 PM, the pre-market watchlist at 9 AM and a daily recap.

The scanner has curated lists such as Top Gappers, plus live halt detection. In the room, I call out my entry and my stop as I take them so you can see the thought process behind every decision. Every execution is taken live. Your size stays your decision. You still need your own broker; any day trading broker works.

Frequently asked questions

Can you day trade on a phone?

You can place trades from a phone app, but reading a chart, a scanner and Level 2 at the same time on a small screen is hard, especially at the open. Use the phone as a backup to manage or close a position.

How much do day trading tools cost?

EDGAR is free, a spreadsheet journal costs nothing, and many brokers' own charts are enough to start. Level 2 is sometimes a paid add-on, so check your broker's market-data fees first. Pay for a tool only when you know what problem it solves.

Do you still need $25,000 to day trade?

Not under FINRA's new intraday margin requirements, effective June 4, 2026, which have "no $25,000 minimum equity requirement for day trading". Brokers may keep the old rules until October 20, 2027, so ask yours which set applies.

See the tools used live

In the Momentum trading room, I trade live on stream every morning, and you watch my screen in real time. Start your 7-day free trial. Cancel anytime.

This content is for educational purposes only and is not financial advice. Trading involves significant risk and may not be suitable for all traders.