I have gotten a lot of questions over the years on how I have my office and charting software set up. When getting your platform up and ready to go, there are a number of things to consider. The first is your work environment. Make sure that you are in a location that is free from too many outside distractions and is also comfortable. Traders spend a great deal of time at their workstation and so a good desk, chair, and preferably, a nice view, are all things to consider. It is important that friends and family also understand that even if you happen to be working from home, it is a job. You will still need to be able to concentrate on it. My friends and family for instance, have very strict instructions not to call during market hours.

Once you have a good location, you need to decide just how much equipment you want to use. I personally have three 19” flatscreen monitors that I use for trading. I then have a laptop for a backup. There are many traders who will use more monitors, but I would recommend at least two. Most of the newer computers out there are fast enough to run the majority of trading platforms you would run into. You will just want to make sure that it has multiple monitor capabilities.

I would also recommend having a backup internet. For instance, many of the providers like AOL will allow you to have a few hours a month for just a couple of dollars. This will tend to be enough that, should your main internet fail, you can get back up online quickly enough to manage your open positions. Of course, keeping your broker's trading desk number on speed dial is always a must.

Next, let's move on then to actually getting your charts set up. I use about 2 1/2 monitors for my charting, with my execution platform on the rest of the third monitor.

I use both all sessions and intraday charts. What this means is that I pay attention not only to intraday data, but pre and post market data as well. For me, I have found that the moving averages and pivot highs and lows that are based on all sessions charts hold just as well as those that are just paced upon intraday data. As a result, I weigh both equally.

Here is how I have my moving averages set up: I use simple moving averages for one thing. Why? Because I like to keep things simple. Actually, I started out with simple moving averages and have never found a reason to switch to exponential or directional moving averages. The differences between a simple and exponential moving average are as follows:

Simple Moving Average - A simple, sometimes called arithmetic, moving average is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods.

Exponential Moving Average - Exponential moving averages are calculated by applying a percentage of the current bar's closing price to the previous bar's moving average value, giving greater weight to the more recent data.

I set up my moving averages to average the close of each bar. How you have your moving averages set up will make the difference on whether or not you get the same moving averages I do or vastly different ones. It is uncommon for every charting platform to give you the EXACT same moving average as the next person's, so it is important to think of a moving average as a zone and not an exact price.

For charts, I use a 1-minute, 2-minute, 5-minute, 15-minute, 30-minute, 60-minute and daily chart in my analysis. I do not keep a 60-minute and daily always up though. I generally look at those two a few times throughout the day just to see if we are coming into any major support or resistance, but find it is not necessary to leave it up at all times. You can even remove the 30-minute if you want and just flip your 15-minute to a 30-minute when you want to look at.

I use candlestick charts with volume displayed as well as a number of moving averages and those are the only things I have on my charts. Intraday, I only use a 20- and 200-period simple moving average (sma). These tend to hold the best and any more just tend to add clutter in my opinion, although many traders will also add a 50- and 100-period sma intraday. On my daily charts though, I do have a few additions. I use a 10-, 20-, 50-, 100- and 200-period sma and I also use the Commodity Channel Index. This is an overbought/oversold oscillator developed by a guy names Donald Lambert and there are a few ways of using it. It can be used to watch for divergence as well as an oscillator, but I use it solely as an oscillator. I set the period at 15 for the daily charts and in such a case the oscillation occurs between *200 instead of *100. As it gets to the + or - 200 levels the market will be at either overbought (+) or oversold (-) levels. It also works to watch prior highs and low in the index and use those as support or resistance. No matter what you use on your charts, consistency and simplicity are the key. You do not want a ton of indicators giving you conflicting signals.

Part 2 will be continued tomorrow.

P.S. I'd love to receive feedback from you. Please leave a comment or discuss the article by clicking on "Make a comment on this article" below.

Toni Hansen is President and Co-founder of the Bastiat Group, Inc., and runs the popular Trading From Main Street. She can be reached at Toni@tradingfrommainstreet.com.