Software is extremely important when you trade. There is not necessarily one software that is “best” but there certainly are software programs that are better than others. There are a few points to keep in mind when a trader chooses a software program to trade with, or chooses a brokerage based upon their trading platform.
Every trader wants a trading software or a trading platform that is “low latency”. This is a fancy way of saying that all of the quotes and information displayed by the software is extremely up to date, calculated to the microsecond. This is crucial for traders because the markets move so quickly. A trader needs the most up to date information possible, if they are to trade effectively. This is more true every day, as more and more computer algorithms make up a bigger and bigger percentage of the total trades. Computers act fast, and if a trader has a software that is not up to date, they will struggle, especially on short term trades, where pennies can make the difference between a profit and a loss.
At How We Trade we also recommend that you use the lowest latency software possible. We would not want a trader to have any disadvantage, as trading is hard enough by itself.
It usually makes a trader more effective if the software has a simple user interface. This is not to say that the software should be unsophisticated, or be lacking in formation or features. The key here is that the design of the software allows a trader to navigate intuitively. Not only does this allow a trader to move more quickly with less thought about how to interact with the software, but it also goes a long way to prevent user errors, popularly termed mistakes like “fat finger” trades.
At How We Trade we prefer a simple design. Good software programs for day traders include platforms like Tradestation, Thinkorswim, or Sterling. We also trade with Tradorax when we trade binary options, because they have a clean professional interface with their software.
Whatever choice you make regarding your preferred software, remember that it needs to be something that you are comfortable with, that you can navigate with ease and that you will not make order entry mistakes with. Remember, accurate orders are a trader’s best friend.
Your Software Should Have Advanced Charting Features
Depending upon your strategy, you may use advanced charting features when you trade. If your strategy depends upon charting moving averages, MACD indicators, Fibonacci signals, stochastic indicators, or something similar, you need to make sure that your software includes this. Software and online platforms from many companies do include these indicators today, but if you use one or more of these in your trading, or you think you may incorporate them into your trading at some point, you should have software with advanced charting elements included.
Alternately, you could also use a third party trade indicator software if this is more effective for you. There are a few of them out there. Most do require you to pay a separate fee, which may be worthwhile if they are profitable. As with any indicator, the key is in learning when it is effective and when it is not effective, because not all signals will be profitable and you will have to develop additional rules to using the indicators in most cases.
This may sound a little silly, but trading is very emotional. When you trade, you want to be focused and in an upbeat mood. Using a software with eye pleasing colors, layout, or a good looking scheme can help keep you in the right frame of mind for trading. When emotions play such a big role in determining your ultimate success or failure, every edge counts, just like every edge in your trading strategy counts. In fact we consider superior mastery of your emotions an edge when it comes to making profits. Remember, when you think successful thoughts you have a higher chance of achieving your goals. Software can play an important role in this area.
Most Software Packages Are Sufficient From A Mechanical Perspective
Today, most trading software and trading platforms are technologically advanced enough to provide trader with sufficient features and reliability to access the markets efficiently. What this means is that most software can “get the job done”. The best software packages do more than this though. To succeed, you want your software to be lightening fast, eye catching, have elegance in its sophisticated yet simple design, and to have the tools you need to consistently profit from the markets!