The purpose of this article is to provide a guide with information for stock trading software to small investors and beginners. There are reviews with useful tips for investment basics and definition, best platforms, automated trading, day trading tools, tutorials, top sites.
The main sections are:
- What is stock trading?
- Software requirements
- A list of stock trading software
- Free financial sites for news or analysis
What is stock trading?
Stock trading is the process of exchanging of securities between buyers and sellers. Yes, the stock market seems sophisticated but in the end of the day it is a market as any others. You buy and sell. You have stock exchanges.
You have stock exchanges. You need a licensed broker who has access to these exchanges.
On these exchanges, you can buy and sell stocks, shares, bonds, options, features. Obviously, you can buy and hope that your security will increase its value. But also, you can “rent” and hope your security will lose value – this is call “short” operation.
Well, the little problem is that you need to decide when and which stock to buy. And yes this is a million dollar question. There is no best way or approach and it is very subjective.
Anyway in stock trading there are two approaches – fundamental and technical.
The fundamental approach includes qualitative analysis of companies, their main business process, their management, goals, competitors, and etc. And qualitative analysis of their balance sheets, incomes, expenses, financial statements, etc.
The technical approach includes analysis of charting and various technical indicators based on historical data (mostly price & volume).
You can use both approaches together for better results. But when it come to software there is different.
Usually, the fundamental approach is not so much “software based”. You can not decide the CEO qualities based on software. So, fundamental analysis is based mostly on analytical skills and on data gathered from official corporate websites, sites with financial data, analysis, news, etc. A list of such sites is defined here.
From the other hand indicators for technical analysis depend heavily on software. There are tons of technical data and you simply can not use it without powerful tools. You can find a list of stock trading software here.
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Obviously, the major requirement for stock trading software is to allow you to trade with stocks. Other securities such as bonds, features, options are a plus.
If you can access it via the web and/or via mobile devices is a major plus also.
Having automation options, inbuilt news, and alert features are also important requirements.
But usually anything other than that is a part of the fundamental or technical analysis.
Requirements for technical analysis software
For me, these are the most important requirements in one tool. They include:
- Charts, charts, and more charts. And all of them should be based on technical indicators such as Moving Average, Relative Strength Index, Money Flow Index, Stochastics, MACD, Bollinger Bands, etc. You can find detailed information about them in Investopedia.
- Drawing tools – Fibonacci fan, trend lines, text overlay, grids, bars, etc.
- Backtesting – it tests technical analysis investment timing strategies against historical price movement for one or more specific stocks.
- Scanning and Alerting – scans the market for some specific indicators. And inform trader if such indicator value is found.
- Data feed – the way software imports information. The best way is real time but some data is imported at EoD (End of the day).
Requirements for fundamental analysis software
The most important are the fundamental information which includes news, market data, stock screeners based on different indicators (P/E, market cap, div yield, price changes, etc), alerts.
So there are some good options for gathering fundamental information:
- General financial sites – see last page section.
- Official site of the company you invest in.
- Official site of the Exchange where the stock is listed (for quarter reports, balance sheets, etc).
- Some technical analysis software also provides fundamental information.
OK, fees are important. Before you select a stock trading software you should decide what kind of trader you are. Day traders usually open and close many positions need very stable software, low leverage interest, and broker with low fees for opening and closing position.
The standard small investors which need to go to work or have a small business obviously do not trade that often. So they need to pay more attention to flat fees and hidden fees. If you open and close 10 position per month yo should not care if your fee is 5 or 7 USD.
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Stock Trading Software
MetaTrader 4 is definitely one of the best stock trading software around.
It has most of the most important features for trading and technical analysis.
For example, you can track plenty of orders in different markets and to have a full range of stop orders.
Technical analysis tools are excellent. You have:
- 4 technical analysis tools comprise of 30 built-in indicators
- More than 2 000 free custom indicators
- 700 paid indicators
- 9 timeframes — from one minute up to one month
- 24 analytical items – lines, channels, the Gann tools, shapes, arrows, and Fibonacci.
I mean guys if you are technical maniacs this software will definitely fit you. And we should not forget that there are tons of alerts and notifications.
You can access this software via web and mobile also which is pretty cool.
There are no real issues with this software. OK, it is not open-source and could not run on MaC OS but these ones are really minor.
If you want more information, please visit MetaTrader4 official site.
Well, optionsXpress is my personal favorite options trading tool. But it does not mean that you are limited only to options. You can trade stocks, futures, bonds, etc.
I think that optionsXpress is one of the best stock trading tools and there are strong reasons for this.
First it has great fundamental analysis features. And I mean it. You really have all those profitability, valuation, sharEs, effectiveness indicators at a glance.
Second you have all financial news and documents – all the important annual and quarter reports, news, special events, etc.
Order system is very good – you have all the management options, stop orders, limits, and more.
Also, you can have alerts and notifications based on your custom parameters.
Technical analysis tools are not forgotten also. You have charts with bars, lines, candles, areas with many options. And you have all important indicators – RSI, MA, MACD, Momentum, and many more.
All the above turns optionsXprexx in a very powerful tool for stock trading but still very user-friendly and intuitive.
Frankly speaking, MetaStock is one of most powerful technical analysis tool you can use for stock trading.
It is flexible, intuitive, multi-task, real-time, analysis tool which can really boost your information for markets.
MetaStock has following options:
Charting – Literally everything. Bars, line, candlesticks, points, trends, lines, kagi, three-line break, etc. And all other useful attributes as different colors, text, symbols. You can have hundreds of charts open, and you can move, hide and manage the.
Indicators – Metastock offers more than 300 predefined indicators available. And you can create your own indicators.
Forecaster – an excellent mojo which analyzes past events in order to forecast future price moves.
Alerts – the software offers a full range of alerts, notifications, sell and buy signals, embedded help, and more.
DataFeed – two options here. You can have data in real time and End-of-Day. They cost different so need to consider if you are a day trader or not. If you are day trader – need to buy real-time option, obviously.
Add-ons – tons of them. Literally.
And please, install this software on a good PC. All the above analysis needs hardware behind.
Some cons about the system – no mobile access, and it work only on a PC. But it is analysis tools and its features worth every penny.
More information about MetaStock on their website.
TradeKing is definitely one of the top stock trading software platforms around.
It has one obvious advantage – its fee is one of the lowest so if you plan to trade few stocks often you can consider it as a valuable option.
Of course, this is not the only advantage. You can buy stocks, options, mutual funds, FOREX, and ETFs. And you have a nice auto-trade feature.
And the platform tools are pretty cool – you have all major charts, technical indicators, draw trend lines, etc.
You have very useful calculators, stock screeners for market research, technical forecast mojo, and streaming.
TradeKing has Apple and Android apps also which is a nice addition to other services.
The platform is stable, robust, and reliable and it matters.
Cons – not enough customization for my taste. But the available features are enough for successful stock trading.
TradeStation is one of the best stock trading tools.
It offers great flexibility and tons of useful features for trading stocks, futures, and options.
TradeStation hs powerful market scanner, has useful charts and offers full back-testing services.
Trades can be executed with a single-click or via automated strategy. Of course, this software has excellent order management and you can manage your trades in real-time.
Technical analysis tools are not forgotten. You have charts with a full range of indicators which can support your decisions. You can place orders via chart trading – very cool option when speed matters.
And last but not least – you have a mobile application with all important features. So you can trade anytime and anywhere.
Cons – Almost nothing. Some of the margin requirements seem high for beginners.
If you need more information – visit TradeStation official site.
First of all, CQG does not offer one tool but a set of stock trading software and tools. And this provides excellent customer flexibility.
So CQG has 4 desktop applications, mobile app, 3 enterprise tools, and APIs.
The most popular CQG product is CQG Integrated Client which offers ultimate features for electronic stock trade.
CQG Integrated Client is robust and has extremely fast performance. It has an innovative user interface with on-time global market data, professional analytical tools, and advanced order management.
One of the best features is the back-testing module which improves trading strategy and increases profitability. CQG Integrated Client has options for automated trade, stop orders, limits, and other.
Excellent charts of each type are implemented in the software. Technical indicators are also available and they are enough detailed.
The software has 2 versions depending on the data feed. The version with End-od-day data feed is free and the real-time data version is paid but with 7 days free trial.
On of the best feature in this stock trading software is that you can actually create your own screeners and automated trades. Which actually provides one of the top flexibility available.
Of course, you have set of predefined technical analysis indicators and they are quite useful. The charts are also very good with many options and settings. You have also alerts, back testing, optimizations and other cool features.
There are mobile apps which is definitely an advantage, and you can install ProRealTime on Windows, MaC, and Linux.
All the above turns ProRealTime in one of most complete stock trading software.
If you are interested – you can visit ProRealTime official website.
This is one of the best online stock trading platforms. Nothing to install, just make an account and start.
But does not mean that Scottrade does not offer a huge amount of features.
You can customize your stock trading web-site via drag-and-drop. You have very flexible order and position management. And have nice tools for market snapshots and comparison.
Scottrader Streaming Quotes module offers advanced charting and many useful technical indicators. You have excellent features as Watch List, Active Tickers, Market Mover, and more.
And the new ScottradeElite module offers more powerful analysis options for more profitable trade.
And you have mobile access also which means access from everywhere.
Free financial sites for news and analysis
The stock trading software is a must for access to exchanges. But sometimes information in it is not enough. It is good to have more than one source of information and analysis.
Hopefully, there are numbers of sites which provide financial information or free stock analysis. I will share the financial sites I am using and I do not claim that they are the full list.
Bloomberg.com – well it is a benchmark in the financial news sites. Up-to-date news, interesting analysis, market indexes and trends, insights, videos, and more. Definitely, worth to have it in your browser’s bookmarks.
The Wall Street Journal – one of the best financial sites. Very good blogs, detailed market information, politics section, world news.
Financial Times – an excellent site with very useful news from UK and Europe. The site has a very good section with columnists, bloggers, and analyzations. Market section is also very detailed and useful for the traders.
Stockcharts.com – free market information and technical analysis tools. There is no news but blogs and market messages. But you have real-time access to exchanges information, amazing charts with tons of features for free.
Google Finance – another excellent financial site. Very good balance between news, blogs, and market data.Very useful stock screener, portfolio management options, and more.
Yahoo Finance – the other big search engine offers very good financial site. A good mix of news, market charts, trends, etc.
Investing.com – excellent sites full of useful financial news and gadgets. It has stock trading charts are just so good. I mean they really have everything needed as functionality.
Barchart.com – one of the best financial sites. Excellent place for stock trading charts with a market overview, indices, signals, commentaries, and many more.
Investopedia – I love this site. Literally! I learned so much from it. It is like a university in finance for beginners. I still check it if I hesitate or need some financial definition. You can use for everything from current news to investment strategy researchers, from financial analysis to charts info. It is rich in information, has professional guest bloggers, provides technical indicators, and more.
OK, these are my favorite stock trading software and financial sites. I do not claim that this is a full list or a perfect guide. But I really think that all the tools I mentioned above are very good and useful.
In any case, you need to make your own decision which software fits you best.
And please remember that stock trading is not without the risk. No software could prevent you from losses. They are helpful but it is you that makes the buy-or-sell decision.
And if you need more information for investing you can read my article “How to invest money?”
And good luck in the stock trading.