Stocks Trading Software

Is an essential component of stock trading programs.



Stocks trading software is used by stock traders to achieve better returns for less effort with the help of the software.

This is of course the aim of using any tool - more results with less effort.

So this type of software can, in an electronic sense, act as a provider of buying and selling advice to the user to a greater or lesser extent (or not at all), depending on the sophistication of the software.

Many different types of trading software are available. Finding the right one requires you to be very clear about what you want to achieve and how you want to go about achieving it.


Types of Stocks Trading Software

At one extreme of software types are what are known as 'black boxes'. They have the characteristic of not allowing you to determine what methods the software uses to come up with the recommendations that are made.

'Black boxes' are generally not recommended as the trader has no control, and no ability to learn from the successful and unsuccessful recommendations that may be provided.

The next level of stocks trading software refers to those systems that tell you what to buy and when to buy it, with some ability on your part find out how and why the software has made the recommendation.

This type of software may take into account your risk profile, how much of your portfolio to invest, and when to sell.

Other stock trading programs are sophisticated charting systems, which includes most of the products in this area. Flexibility may be provided for the user to try a variety of charting techniques and then get the software to trigger buy and sell recommendations based on these techniques.

A step down from this type of software are simple charting programs that the user manipulates to infer buying and selling decisions.

A further type of software incorporates charting with fundamental analysis with guidance provided to help the user to do the research on a particular stock to determine whether to buy it or not.


What Do I Use?

The software I use makes very limited use of charts for decision making, but calculates intrinsic value using a spreadsheet. It compares this intrinsic value to current stock prices to assist me to make buy and sell decisions based on any disparity between the calculated value of the stock and the stock price.

If I feel the need to do any charting to get a feel for historical stock prices, I use the software provided by my online broker. Occasionally I may also use the broker's software to chart moving averages before making a decision.


Which One(s) Meets Your Needs?

Some of the options available with the various software that you may or may not require include ...

  • Do you want the software to plan your trades, letting you know when to enter and exit a trade?
  • How much training do you need to get started? Packages vary in terms of the amount of training needed and the type(s) of media used for the training
  • Do you require the software to act as a portfolio management tool? Most do, but some more than others.


To Conclude ...

The above discussion indicates that there is a wide variety of stocks trading software.

As a result, it is necessary for the investor to determine what type of investor they intend to be first and then look for the type of software (if any) that will best help to achieve their desired goals.


Because value investing is for the longer term, many of the options in stocks trading software are not required, and are more designed for day traders.

Value investors need to weight up the costs of purchasing a package that may not be used on a regular basis.

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