Stock trading involves buying and selling a percentage of ownership of a company, and has been one of the most popular investment strategies for decades now.
Lots of people have ventured into stock trading, and have been able to gather wealth with time. Others, however, have ventured into stock trading, and come out broke, or worse still, in debt.
Profitability In Stock Trading
Profitability in stock trade only comes when the value of the company increases.
Analyzing a company’s stock value, using proper risk management, and knowing points to enter and exit trades on the stock exchange market separates a trading pro from a trading novice.
Profitability from stock trading comes with knowledge and research. Knowing key entry and exit points in trades and recognizing profitable businesses can only come from proper research.
Stock Trading in Contemporary Times
In the past, trading prowess only came through years of research and experience, as well as, through rigorous manual calculation.
Nowadays, with the aid of stock trading software, one can navigate towards stock trading prowess, without necessarily going through rigorous manual processes.
Many online stock trading platforms now offer customizable trading software to their users for a subscription fee.
These trading platform’s software are programmed to have trading tools, to assist traders do a proper analysis of the market, and aid them in executing trades.
Trading Software and Charting Software
Although most people tend to mix up the use of charting software and trading software, both are actually different.
Trading software is software that is designed for trading. These software are programmed to have customizable trading features or tools, to help traders in a timely manner. These software enable proper analysis of the market and help in making well-informed decisions with trades.
Stock charting software on the other hand is software with comprehensive charting capabilities. These capabilities include price charts and other technical tools for market data analysis.
While all trading software offer charting features, charting software provides better and more in-depth charting capability. Some stock trading software, however, is built to offer the full capacity of charting and trading, it is solely up to the trader to do thorough research as to which software is most suitable for their requirements.
Operating Principles of Charting Software
With the numerous charting software options available on the market, traders can find it challenging to select the most suitable software for their trading requirements.
Although this stock charting software is usually customized, there are five principles a good charting software must follow. We’ve covered the briefly below:
Data Collection and Storage
Trading has to do with data generation and analysis. For a trader to be successful, he has to gather lots of data and analyze to make informed trading decisions.
So for this, good charting software needs to have the ability to collect and store data like stock prices, volumes and historical data. With this users can access this data in the his own time frame and in instances required.
Generation of Charts
With the collected and stored data, good stock charting software should be able to help the user visualize and analyze the data in the form of charts.
These charts are a visual representation of the data and can be displayed as candlestick, bar, or line charts, based on the user’s preference.
Collecting data without being able to analyze it is completely useless. To this end, charting software must be equipped with technical indicator tools that correspond to price and volume data.
These tools should be capable of being applied to charts and help provide users with a better understanding of the market.
Current Data Update
When it comes to charting software worth using, it should be able to update itself in regular intervals with the current and historical market data.
Analyzing with only old data will handicap a trader, as current market trends are a necessity in analyzing data. Therefore a good charting software must continuously update the volume and price data of all its stocks.
The needs and preferences of traders vary. While all traders go to analyze market data for trading purposes, each trader has their specific choice of analysis.
A charting software must have the ability to be customized by its user. The trader should be able to tweak things like candlestick color, chart type, as well as other tools, to tailor their taste.
Advantages of Using Advanced Charting Software
There are so many advantages to using advanced charting software. Here are a few;
Improved Decision Making
With the accurate market data provided by these chart analysis software, a trader is well equipped with the right data and charting tools, to make well-informed decisions in terms of his trading.
With better trading platforms and charting tools, the speed at which trades can be placed is considerably faster.
Before being able to analyze data properly, with the use of these charting software, a trader now has quicker access to analyzed data. With this data at hand, a trader can easily place a trade with speed and accuracy.
With their customizing features, a trader can easily set the tools to fit his personal choice and needs. Ranging from the color of the candlestick to the type of chart to be used, each trader has an option of customizing their interface based on their need.
Previously, when all calculations and analysis were manual, a trader needed to have access to his bulky notebook, to access analysis.
The use of charting software, which is now mobile enabled has made it easier for any trader to access current analyzed data, anywhere, anytime.
Access to a Wide Range of Tools
The use of charting software grants the trader access to a wide range of tools.
A trader can now observe trends and patterns, with different tools, and combine them to make well-informed trading choices.
As the world advances, the way of doing things also advances. The use of software, for both trading and charting in analyzing and making trades plays a significant role in the life of a trader.
It’s recommended for traders to use advanced stock charting software, in combination with good stock trading software, to stay ahead and well-informed while trading.
There are many charting and trading software out there, proper research on the trader’s part will guide them in choosing the right software to fit their trading needs.
Frequently Asked Questions
Is there a difference between trading software and charting software?
Yes, there is a difference between trading software and charting software. All trading software has the elements of charting software, but charting software gives a detailed chart.
What do I look for in charting software?
Historic data collection, generation of charts, user-friendly interface, and customization are some of the key things you need to look out for in trading software.
How best do I use charting software?
Charting software is best used in combination with trading software, as this helps the trader have accurate information that can be used to place orders.