Computer applications today, have made it much easier to automate-trading, particularly for the short-term and intensive activities such as day trading, which has made the use of different trading software extremely popular. Debates continue over profit potentials which can be derived realistically from the day-trading activities, due to brokerage commissions and fees are believed to deduct a significant portion of the profit potentials. For this reason, it becomes important to choose the correct day-trading software that comes with a cost-benefit analysis, an assessment of the applicability for individual trading strategies and needs, along with the functions and features that you need.
Day-trading involves time-bound trading activities where sell and buy positions will be taken as well as closed on one trading day. It is aimed at making profits at the lower price differentials at larger order volumes by selling and buying frequently, typically on leverage.
The functions and features available might differ between the different software packages and might come in differing versions. In addition to the brokers, the independent brokers also offer day-trading software that usually offers features that are more advanced.
Characteristics Of Good Day-Trading Software
– Platform Independence
Unless the trader runs algorithms that are highly complex for day-trading that necessitates high-end dedicated computers, then it is suggested to choose the web-based software offerings. The benefits are inclusive of no manual upgrades, installations or maintenance costs, along with connectivity that can be used from anywhere.
– Your Specific Requirements For Day Trading
Do you follow basic day-trading strategies to move the average-tracking on different stocks? Or are you interested in implementing complex delta-neutral trading strategies that include stocks and options? Do you require a Forex-Feed or do you trade on a specific product such as binary options? It is best to try out trial versions to assess the software. You can also check on the screen-by-screen tutorials when available from a vendor or stock broker to understand what is the right fit when it comes to your trading needs.
– Additional Features
Day trading is aimed at capitalizing on the short-term price movements that occur over the day. These short-term based price movements are driven mainly by the news along with demand and supply, along with other factors. If you are focused on day-trading strategies that require charts, news, Level 2 data, an exclusive connectivity when it comes to specific markets such as OTC, data feeds that are specific, etc. Then you need to find out if these will be included in your software or you would need to subscribe to these separately from different sources, which would then increase the costs.
– Analytical Features
It is also important to consider the analytical features on offer. Some of the more important ones include:
Pattern Recognition Or Technical Indicators
For the traders that are looking to take advantage of predicting future price directions and levels, there are a variety of technical indicators available. Once a trader has decided on technical indicators that they should be following, they need to make sure day-trading software they have decided on will support the needed automation for processing that is efficient for trades that are based on a desirable technical indicator.