TraderNovice.com
You have decided to trade. You plan to be successful, have money, a brokerage account, and a plan. What trading software will you use?
Understanding Trading software is an important part of the trading equation. The product you choose will act as an interface between you and your broker, and subsequently the markets. There are several considerations when trying to decide on the product that is best for you. I will list a few of the considerations here, with a short discussion on each, in the hopes that this may aid those learning to trade.
Below are a few links to some you tube videos that may give you a preliminary idea on various trading software programs. Some of the videos are of moderate quality, but will at least give you an idea of the software. At this point most major brokerages provide cheap, or free charting so we will begin with them. There are several other vendors who supply data, or charting, or both.
Interactive Brokers provides a reasonable option with Trader Workstation. Since it is supplied FREE with the brokerage account, that is certainly a factor consider. Data is supplied FREE as well, so there is no need for a separate data vendor. This is a huge plus for small accounts. The truth is though, that I.B. provides one thing better than any other brokerage.......low cost across the board. They do that by limiting other brokerage offerings such as support, and extras, and TWS is no exception. It is the software that I use most often, have used for several years, is functional and accurate but far from user friendly and no where near the best on the market.
For those who have traded for years, this is a free option that is not so bad. For new traders, it will likely cause you some headache, and several mistakes but may be worth a try.
Click This Link!for a view
of the TWS workstation view. To see Trader Workstation (TWS) Charting, please click
here!
TradeStation has an excellent product. It has some of the best trading technology on the market. The advantage of TradeStation for years, has been the ability to backtest your trading ideas. This has been the focus of this product for longer than any other tool on the market. At present, the software is being provided free with new accounts (minimum 30k day trade, 5k non day trade). The product, like Ninja and others, also allows for simulated trading of your ideas. Commissions are not as cheap as I.B., but service, support, and the software is better. You can get an idea of the product from Tradestation's own video tutorial by clicking Here.! You can also get an idea from a you tube link by clicking this link!.
MBTrading also is listed as a top broker. I have never used their product, but it has gotten good reviews elsewhere. I wanted to include some links here because I think it is worth consideration. You can get an idea of their platform by clicking here!
TDAMERITRADE is also a highly rated broker. Unfortunately, once again, I have no personal knowledge of their product. It too, however, has gotten some good reviews elsewhere and Barron's ranks this brokerage as being quite supportive to new traders, especially since the acquisition of Think or Swim. All this support comes with a price though.....higher commissions. You can see TDA's own video presentation by clicking here!
Many other brokerages provide products. This list includes OptionsHouse, TradeMonster, Scottrade, Etrade, Schwab, Lightspeedtrading, OptionsExpress, and others.
Ninja Trader is a type of trading software that I have used extensively. I have found it to be an excellent tool for charting and trading. I have read that the program has had some database issues, but I have not personally experienced this problem. Customer support is via email, but is reasonable and fairly quick. The program is like all programs that allow for multiple function and user adaptability......there is a significant learning curve. In addition, there is no month to month subscription. This is certainly a negative. I have a link here for a Ninja Trader video that has been posted on you tube. Click This Link!for one video on ninja trader. Click Here!for a video on using ninja for backtesting.
If you are looking for FREE charting, go to StockCharts.com. This is the best free stuff around. There are a lot of free, simple stock charts that typical traders might choose to use from this site. Major averages, commodity groups, educational tools are all available. You should at least check this site out here
CQG is a product I have used quite a bit. I think it is both a solid data provider and also a provider of reasonable charting capability. All the typical charts are available, as are indicators of a wide variety. This is a good product. You can access information on CQG by clicking this link
eSignal provides excellent data service and great quality charts and is often used as an add on element for other trading software. This provider is quite similar to CQG in the variability of the information and products it makes available. I used it as a data provider with WindoTrader, and as a stand alone charting product. It is a very worthwhile product which is on par with anything else available. There are a lot of educational tools available through the site as well. You can access eSIgnal here
DTN IQFeed is similar to CQG and eSignal in available products. View their website here. DTN IQfeed offers a FREE 7 day TRIAL.
Jay Froscheiser with DTN was kind enough to comment on the services DTNiq has to offer:
What IQFeed provides is quality, affordable market data. Many people get stuck in the “I get data from my broker” mentality. What they don’t realize is that this data is sent in a non-guaranteed format and often drops or filters data during active markets. This means your indicators will be different than what others are seeing because there is a high likelihood that the data your software is processing isn’t the same as someone else with the same setup. As you know, psychology is key to successful trading. There is enough stress involved in analyzing your charts, news and signal to determine entry and exit points. How does it affect your trading if you also have to second guess if your signals are incorrect due to data errors or delays? I am amazed at the number of times I see people post in forums, chats rooms, twitter, etc asking for validation of a signal. They need to do this because they don’t know if their data generating the signal is accurate (signals are just math, so they are as accurate as the formula entered. The only thing that will drive incorrect signals is the underlying data). Hundreds of trades have scrutinized our data against just about everything under the sun. This include free broker feeds on up to $1500 professional terminals. In nearly all cases, we are as good and often better in terms of speed, reliability and accuracy. The other bit of misinformation out there for new traders is that they are getting “free” data from their broker. The large majority of brokers offering feeds as part of their brokerage account are charging a markup on every trade executed. These fees range from a few pennies to as much as $1 per trade. It doesn’t take many trades to add up to or above the fees for a quality data feed like IQFeed. And, these feeds usually don’t include access to indexes, market breadth indicators, 800# support, access to other markets, historical data or streaming real time news. The brokers try to hide this information and make traders (especially beginning traders) feel like they are getting everything they need and its “free”. They never outline the execution technology/data costs that are baked into their commission structure. Many traders would be better off finding a low cost broker (Interactive Brokers for example) who doesn’t bake in these fees, then pay for quality data and the customer support that comes with it.
MasterTrader provides trading platforms for all the markets. Their website has information on costs and comparisons and can be accessed here
Market Profile is a method of charting price activity based on where it occurs during sequential periods of a trading day. It was developed by Peter Steidlmayer at the Chicago Board of Trade in the late 1980s. I know that many of you are familiar with using Market Profile for charting. I recognized the intuitive aspect of the concept from the first time that I heard about it, and I remain convinced that it has a role in easier understanding of market activity, which is why I am including a specific section for Market Profile Software here. Review our section on market profile trading.
Mr. Steidlmayer has written several books himself including Markets and Market Logic and Steidlmayer on the markets. Jim Dalton has also written two very informative books on the concept. I have had the pleasure of interracting with Mr. Dalton on several occassions and can verify that he has a great understanding of markets and how they work and why. Mr. Dalton believes strongly in the principle of the auction process playing a primary role in market activity, and he explains this concisely in his first book Mind over Markets. What understanding I do have of the markets comes from a variety of sources, not the least of which is Jim and his teachings. Jim Dalton relies heavily on market profile for interpretation of market activity. You may review his books in our book review section.)
Mr. Steidlmayer has a good explanatory interview on market profile posted here
I have no doubt that Mr. Steidlmayer has a magical understanding of the markets and of course market profile, as it was his idea. I did however read one of his books and I would have to give the edge to Mr. Dalton when it comes to explanations. If you have interest in learning more about market profile, consider reading Dalton's books.
Using market profile usually requires a special type of trading software as typical charting software packages generally do not include profile ability. Several companies produce such software including Market Delt, CQG, Investor/RT,Final financial software, esignal and others. I have used many of the programs and nothing comes close to WindoTrader, which in my opinion is clearly the leader in profile charting.
Tradernovice has a market profile section as well.
WindoTrader is a type of trading software used only for market profile charting. It allows for remarkable flexibility in your profile charting approach. The company is run by Terry Liberman, with technical work by Eric Cassidy. In an effort to provide full disclosure I must admit that I know both men very well and consider them friends. Terry,his wife Marilyn, and Eric, as I have mentioned elsewhere, are some of the finest people I have met in my trading ventures. He is one who has sacrificed profit to some extent, in order to help others trying to learn. But irrespective of the fact that I know Terry, WindoTrader is a remarkable product that provides clear, accurate, flexible profile charting. All of the typical charting options for product and time are available, and the new WindoTrader Blue product allows inredible personal configurability. I think it is head and shoulders above the competition. I have used the product extensively for years. It was better than anything else prior to the recent upgrade, and now with WindoTrader Blue it has only lengthened its lead over the competition.
WindoTrader has a website with a great deal of information that can be found at WindoTrader.com Below is a sample of one of their charts.
""windotrader chart" |
WindoTrader CEO Terry Liberman has also posted charting of a regular trading session which can be seen on vimeo here
Market Delta is another well known charting software that focuses on using the market profile methodology. Market Delta has been around a while, and I have used this product in years past. This product provides traditional charting as well as market profile charts. As far as market profile charting is concerned, the product does provide a bit of flexibility and some unique charts, including their footprint chart which focuses on recognizing trades that occur on the bid, as opposed to those which occur on the ask. Typical configurations with variable, times, products, etc. are available as are the addition of indicators. I am sure this is a powerful product, but in the time that I used it, I did not find the bid / ask notations to be as helpful as I expected. You can find a sample of the footprint chart here
In addition you can access the MarketDelta website here
Investor /RT provides market profile charting. I have not used this product. There are several videos that have been posted by the company showing typical market profile charts and one of their profile charts can be viewed here
The Investor /RT home is easily accessible here
Steidlmayer Software Inc. also provides a product for use with market profile charting. You can access that product here.
Photon Trader is a product of Future Path Trading. I have used it. It provides adequate, colorful market profile charts. Based on my experience, that is about all I can say here. I did not find it as flexible as other Market Profile trading products, but you can find a gallery of the charting samples here
Several of the more well known vendors also provide profile charting. This includes