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Software has been integral to trading success for many decades now and the choices are endless. Whether you are an individual trader working from home or part of a multi-national investment bank, you will need software to succeed in trading.
The types of software you may encounter are as follows:
- Brokerage (desktop and mobile)
- Trading Data feeds
- Custom signals and systems
As a technical analyst you will need access to charting software. There are countless options for this category of software ranging from free to very expensive.
Trading AtoZ has selected a few options to give an indication of the choice:
|Software Cost||Data Cost||Subscription Costs|
|MetaStock (real time)||$1395||$700/month||–|
|eSignal (real time)||from $176/month||–||–|
|Trading View||free||–||for $15-$60/month you can upgrade to premium for enhanced functions and real time data|
|Stock Charts||free||–||for $15-$40/month you can upgrade to premium for enhanced functions and real time data|
The data costs in the above table are for comprehensive packages covering global markets.
You can spend a lot on charting software but Trading AtoZ do not recommend you spend anything when starting your trading journey. The free option provided by your broker, coupled with free online software will be of sufficient quality.
The ultimate charting software comes with the Bloomberg terminal. It is more than just charting software, it is an all encompassing trading package, with an eye watering price of around £1600/month.
Once you decide that you want to pursue trading you will quickly realise that a spreadsheet is required. Whether to track your trades, monitor your performance, create a system/strategy, the spreadsheet is the ideal tool for the job.
Most aspects of your trading journal can be documented inside a spreadsheet. Doing this will allow you to perform “what if” analysis far easier if you want to alter your trade tolerances and other factors.
Trading AtoZ has selected 3 spreadsheet offerings:
|Apache Open Office||✔||✔||✖||✖||Free|
Trading can now be performed anywhere and at any time so having a spreadsheet that moves with you is invaluable. For this reason, Trading AtoZ would recommend either Microsoft Excel or Google Sheets. They both have full support across all platforms allowing you to seamlessly move from one device to another.
If you already own Microsoft Excel then I would suggest you remain with it, but if not, Google Sheets will meet your needs perfectly well. Trading AtoZ uses Google Sheets for its trade tracking, performance monitoring and trade tolerance definition.
This is the software you need to execute and monitor your trades. Thankfully the days of having to phone or fax a broker to execute a trade are long gone. They all now have multiple ways to interact and trade, from websites, apps, desktop software and most still offer a phone service.
When you have decided on your broker they will undoubtedly send you a link to their software and nowadays this is usually free, especially for the individual trader.
Many of these brokers also offer demo accounts which Trading AtoZ highly recommend you make full use of. They are great for learning the brokers platform and their trading terminology. See our trading glossary for some of the terms you may encounter.
Many of the accounts listed on the brokers page also come with integral charting software and news feeds allowing you to research and trade within one platform.
Trading Data Feeds
As you can imagine the amount of data produced by exchanges is colossal and it is a prized asset. There are many providers that bring together data from all the exchanges and allow access to it for subscribers. This is usually daily data and covers all asset types. More granular data is also available but this will come at an additional cost.
Most brokerage software will come with a free real time data feed as well as showing historical data. It is very rare for this data to be downloadable.
If you are building your own system, performing back testing or have custom software, then you may need a separate data feed.
The typical cost of daily data for all asset types is from £300/year. This will include an initial download of historical data as well the ability to download each day.
Daily data is provided with the following items for each instrument:
- Open Interest
Custom Trading Signals and Systems
There is nothing wrong with using a trading system designed by someone else, or following trading signals generated by proprietary software. If you do this you must understand fully the processes involved and how the system and software generates its signals.
There are a few questions you should ask yourself when choosing such software:
- Do I know how the software generates signals?
- Does it cover all the asset types I want to trade?
- Can I adhere to the rules set in my trading journal?
- Does it provide signals for entry and exit?
- Does it provide stop and limit recommendations?
- What is the cost? (how much return do I need to cover this cost)
- Does it require a separate data feed? (if so, how much does this cost)
- Is there support and training available for the software?
- Is it recommended by reputable sources?
Like many of the other software categories the pricing for this type of software ranges from free to £000s.
To succeed in trading you will need software. Thankfully all of the above categories have free, or very low cost options. Until you have refined your trading journal and settled on a trading style you should only consider free options. There is nothing worse than spending hard earned money only to realise the software does not suit your trading style.