Day trading software
Encyclopedia
Day trading software is computer software intended to facilitate day trading
of stock
s or other financial instruments.
needs to know the prices of the stocks, futures
, or currencies that s/he wants to trade. In the case of stocks and futures, those prices come from the exchange where they are traded. Forex is a little different as there is no central exchange.
Because exchanges don't generally want to be concerning themselves with supplying data to millions of individuals, they usually make their price feed available to an aggregation company. These companies then sell those price feeds on to individuals and corporations.
Prices can vary greatly for data feeds, with the exchange setting the base price.
Some data feeds are free, but the prices these feeds supply are delayed. Such feeds are only useful to occasional investors, and are worthless to day traders.
Charting packages all tend to offer the same basic technical analysis
indicators. Advanced packages often include a complete programming language for creating more indicators, or testing different trading strategies.
Most brokers
will provide proprietary software linked directly to their in house systems, but many third party applications exist through Independent software vendor
s(ISV). The advantage of third party programs is that they allow the trader to trade through different brokers whilst retaining the same interface. They may also offer a number of advanced features such as automatic trade execution.
Day trading
Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day...
of stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
s or other financial instruments.
Types of software
Day trading software falls into three main categories: Data, Charting, and Trade Execution.Data
A day traderDay trader
A day trader is a trader who buys and sells financial instruments within the same trading day such that all positions will usually be closed before the market close of the trading day. This trading style is called day trading...
needs to know the prices of the stocks, futures
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
, or currencies that s/he wants to trade. In the case of stocks and futures, those prices come from the exchange where they are traded. Forex is a little different as there is no central exchange.
Because exchanges don't generally want to be concerning themselves with supplying data to millions of individuals, they usually make their price feed available to an aggregation company. These companies then sell those price feeds on to individuals and corporations.
Prices can vary greatly for data feeds, with the exchange setting the base price.
Some data feeds are free, but the prices these feeds supply are delayed. Such feeds are only useful to occasional investors, and are worthless to day traders.
Charting
The vast majority of day traders will chart prices in some kind of charting software. Many charting vendors also supply data feeds.Charting packages all tend to offer the same basic technical analysis
Technical analysis
In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...
indicators. Advanced packages often include a complete programming language for creating more indicators, or testing different trading strategies.
Trade Execution
Once a trader has their data and can see and analyze it on a chart, they will at some point want to place a trade. To do so, they need to use some kind of trade execution software.Most brokers
Stock broker
A stock broker or stockbroker is a regulated professional broker who buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors...
will provide proprietary software linked directly to their in house systems, but many third party applications exist through Independent software vendor
Independent software vendor
Independent software vendor is a business term for companies specializing in making or selling software, designed for mass marketing or for niche markets...
s(ISV). The advantage of third party programs is that they allow the trader to trade through different brokers whilst retaining the same interface. They may also offer a number of advanced features such as automatic trade execution.
See also
- Electronic trading platformElectronic trading platformIn finance, an Electronic trading platform is a computer system that can be used to place orders for financial products over a network with a financial intermediary. This includes products such as shares, bonds, currencies, commodities and derivatives with a financial intermediary, such as a...
- Extended hours tradingExtended hours tradingAfter-hours trading is stock trading that occurs after the traditional trading hours of the major exchanges, such as the New York Stock Exchange and the Nasdaq Stock Market. Since 1985, the regular trading hours in America have been from 9:30 a.m. to 4:00 p.m...
- Bloomberg TerminalBloomberg TerminalThe Bloomberg Terminal is a computer system provided by Bloomberg L.P. that enables financial professionals to access the Bloomberg Professional service through which users can monitor and analyze real-time financial market data movements and place trades on the electronic trading platform...
- Reuters 3000 XtraReuters 3000 XtraReuters 3000 Xtra is an electronic trading platform typically used by professional traders and investment analysts in trading rooms. It provides real time streaming price date on exchange traded stocks, warrants, options, futures, indices, bonds, commodities and foreign currencies as well...
- Technical analysis softwareTechnical analysis softwareTechnical analysis software automates the charting, analysis and reporting functions that support technical analysts in their review and prediction of financial markets .-Features:...