Some execution brokers online occasionally provide a variety of charts and a few analytical tools for traders, but they do frequently charge for this data. Moreover, if the analytical software is provided gratis, then often it may not be fully comprehensive and difficult to interpret for the novice trader. In some instances traders in the past have even complained about some of the data provided by their broker even being inaccurate, bamboozling and of little or no value to them when making trading decisions. Perhaps this is no surprise after perusing over a review of online brokers, which revealed traders general dissatisfaction with their brokers. In view of this, the sane; don’t put all your eggs in one basket might also be relevant when deciding what software analytical tools to use when trading. Indeed, in view of the above, it might be prudent to use independent analytical software from that offered by your broker.
When having an edge in trading is all about making either a profit or a loss it would be wise to invest in analytical software tools that help you make timely, accurate and effective trades. To be governed by your emotions; fear and greed is the last thing that you would want to influence your decision making in a stressful environment, such as trading. For this reason, a comprehensive analytical software package is a tremendous aid for the trader because their decision making process is guided more by their analytical mind, apparently a higher part of the brain, rather than the emotional primal part of the brain, which controls fear, greed and lust, which apparently doesn’t help us when we are required to make cerebral decisions.
Maybe this is the strongest reason why quality analytical trading software is a must have in the tool kit for any professional trader. But with so many options on the market choosing the right one is a bit of a minefield to say the least.
So a question worth pondering over is what do the professional traders, those who actually make a living from trading, want from their software package.
High up the priority list is being able to display data in state of the art charts. For example, a software analytical tool that can show price movements in a candle stick chart format is helpful. A candle stick is a combination of a line-chart and a bar-charts, in that each bar represents the range of price movement over a given time interval. Candle stick charts are often used in technical analysis of equity and currency price patterns and they are a useful visual aid for decision making in stocks, foreign exchange and commodities. Being able to display price movements and other relevant data daily, weekly, quarterly and even 5 year timeframes can also be helpful in determining recent and historic price movements. Charts which also show unique color barometer with a snapshot of every indicator are also preferable.
Having the facility to build lists of tickers to chart from simple to complex was another feature required by traders. The ability to overlay one ticker on another is a great feature that can also give the trader an edge. For example, if you believed that the Dow had a repetitive historic pattern, say during the years 1972 and 2002 you may find it useful if the software you are using can overlay, say 1972 in red and 2002 in yellow on the same chart. This would enable the trader to pick out reoccurring patterns and decide whether history does indeed repeat itself with respect to price movements.
A software tool that can chart trend lines, showing support and resistance price levels is another great tool to have when deciding whether to sell or buy. Basically a trend line is formed when a diagonal line can be drawn between two or more price pivot points. A trend line is created by connecting bottoms to bottoms in the case of an uptrend and tops to tops in the case of a downtrend.
Plotting trend lines can be helpful in determining the future direction of prices movements; again this is a feature you’d want from your software.
The software package should also provide Gann indicators, which have been used by active traders for decades. Gann angles are a popular analysis and trading tool that are used to measure key elements, such as pattern, price and time. On a Gann angle the past, the present and the future all exist at the same time. A Gann angle is a diagonal line that moves at a uniform rate of speed, which is why traders tend to prefer Gann angle compared to trend line for technical analysis. This allows the analyst to forecast where the price is going to be on a particular date in the future.
Another popular tool amongst traders is Fibonacci retracement, which is based on the key numbers identified by mathematician Leonardo Fibonacci in the thirteenth century. In technical analysis, Fibonacci retracement is created by taking two extreme points (usually a major peak and trough) on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%. Once these levels are identified, horizontal lines are drawn and used to identify possible support and resistance levels.
A real time alerting system is another must have feature of any trading software because it means you don’t have to be glued to your trading screens for hours on end. A few of the better trading software enables the trader to send alerts to his/her pager, e-mail or have it play an audio file. In some of the premium trading software package available you can even build color studies or define your own indicators.
So trading software is an essential companion to the professional trader. Most trading software currently available on the market do provide the most basic tools for traders. However, there is one trading software package that stands out head and shoulders above the rest, that’s the winway charts, which is a trading software package containing a complete array of analysis tools. Winway charts ticks all the boxes and is well worth exploring with continuous value added components to give you an edge in your trading.
0 comments:
Post a Comment