Day trading software
You have decided to give the world of day trading a try. First of you are going to need the right tools before you can start to see real results, so why not take the right decisions from the beginning. In this article we will uncover the different types of software and in which part of the process they are needed.
Given that day trading is a type of trading which happen on the internet the tools you are looking for are going to be software. You are going to need software to analyze the markets you are trading on, software to make decisions on which trades to enter and software to make those trades happen. Some of the top software out there can even automatically execute trades based on the strategies you develop. This will give you more time to perfect those strategies and in the end mean more profits.
Types of software
You will quickly find that there are quite a few different programs, all with different features and functions, but you can basically break the software into 4 different types:
- Data gathering
This is always your first step when you want to make trades. You need to know the prices of assets, the price difference of currency pairs, etc, before you know what might seem interest on any given day. Often you will be able to download apps from exchanges which will feed you the information you need.
- Data analysis
After gathering your information, it is time to analyze it to spot trends and patterns. For this purpose many traders use what is known as a charting program. As the name implies, this kind of software makes charts out of the data input, but usually comes with a bunch of other functions. These programs can be expensive, but in this case quality correlates with price and you could gain a crucial advantage by getting one from the top shelf.
- Trade execution
This is the big cheese. You have gathered information and you have put them through thorough analysis and are now ready to make a trade. For this you need to acquire an online trading platform. If you are interested in automated trading this is where you need to make the right choice. Not all platform allow you to make a strategy and have it perform automated trades, so be aware of the term application programming interface, which are often linked with automated trade bots.
- Independent software
Most of the software out there is associated with brokers in one or the other way. This can be problematic, since most brokers only have their own profit in mind, the software they offer sometimes reflect that. Often the independent software offers more features and more advanced functions and charting tools.
It can be a jungle out there, so keep a level head and do your research before choosing which tools you put in you toolbox. Ultimately a carpenter is never better than his tools allow.