What Is the Best Financial Trading Software?
Together with the personal computer (PC) and the internet, the financial market has changed dramatically over the years. Nowadays more and more traders focus on where and how to find the best financial trading software rather than finding the best trading strategy.
In a way, it is only reasonable. The focus shifted from capital to speed, as the race for the fastest and most accurate execution is on. For this reason, traders tend to lose focus on the actual trading and concentrate more on finding the right financial trading software. The idea is that with the help of better software, trading results will improve.
That is correct, but with one condition: that the trading strategy depends on the core competencies a financial trading software brings. Plus, there is a tremendous confusion between traders as they consider the trading platform as financial trading software.
While some similarities exist, the two are different and serve other purposes. The broker provides an electronic trading platform as the interface or the gate to the interbank market. In return, the broker charges a fee either in the form of a spread between the bid and ask prices, or in the way of a commission. Sometimes, both a spread and a commission are deducted from the traders’ accounts.
Depending on the trading platform, traders enjoy different execution conditions. Moreover, the spreads on the same broker may vary too – not to mention the trading platform’s capabilities.
For example, MetaTrader4 differs from MetaTrader5 (MT5 doesn’t allow hedging and traders must respect the FIFO – First In First Out rule), but they both differ from the JForex, CTrader, or other popular trading platforms.
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Few retail traders know that other trading software exists besides the one advertised by classic brokers. A trading platform like MetaTrader4, which is the most popular among retail traders, only comes with some limited default settings at first installation.
That means that on the indicators list, one will find basic trend indicators like Bollinger Bands, Parabolic SAR, or Moving Averages. And, on the oscillators side, the classics RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), Stochastics, DeMarker, and a few more.
In the end, these indicators represent nothing but trading software. Or, more precisely, trading tools to complement a trading view, like a bullish or bearish one.
But that’s not every available tool on the market. There are a plethora of other technical indicators to import in a trading platform like MetaTrader4, or to merely use the MetaEditor to build one from scratch.
Best Financial Trading Software to Trade the Markets
Some brokerage houses offer software applications claiming their various functions assist traders in their decisions. In some cases, that is true. For example, pattern recognition software exists that automatically spots the classic technical analysis pattern like the head and shoulders, the double and triple tops and bottoms, rising and falling wedges, ascending or descending triangles, rounding tops and bottoms, cup and handle, and so on.
In the end, identifying or spotting such pattern is a matter of optic and experience. The more experience the trader has, the easier it is to find them. However, with a financial trading software like this one, there’s no need to focus on identifying the pattern. Instead, the focus shifts to how to trade them and to money management integration.
Therefore, a trading software’s main role is to assist traders in their day-to-day practices. Either making technical analysis patterns visible, or offering tools and indicators that otherwise don’t exist, financial trading software is just an add-on to a trading platform.
The currency markets landscape has changed with the improvements in trading execution. Nowadays the high-frequency trading industry dominates currency trading, and retail traders try to keep up with the changes.
Retail traders do not drive most of the volume in the forex market. Instead, commercial and central banks, as well as brokers and liquidity providers, not to mention institutional investors, are responsible for the bulk of daily forex transactions.
The HFT (High-Frequency Trading industry) makes no exception. In fact, regarding the volume traded, there’s no rival to match this industry. As a reminder, the industry is made up of supercomputers buying and selling thousands of trades per second in the run for the smallest change in prices.
However, the volume traded is so big that it compensates for the small changes in prices. To have an idea, if the retail trader buys and sells on a four-digit account, while the pip is the fourth digit, a high frequency trading software considers the 7th, 8th or even further digits for settling profits or losses.
The Best Technical Analysis Trading Software
As mentioned earlier, retail traders realized the only way to compete with big players is to use the same tools. Hence, the automated trading industry for retail traders exploded in popularity lately.
An expert advisor is a robot or a trading software that allows investors and traders to place trades and monitor accounts. More precisely, it does that automatically, respecting the trading strategy designed by the trader.
Therefore, the expert advisor is a trading software that follows the trading strategy, buying and selling the currency pair it is applied on. For this, one needs to have programming skills to program the trading algorithm or to buy an existing one.
Typically, the financial trading software comes with all kinds of features that traders don’t quite know how to use, nor if they need them. However, because they are beautifully wrapped-up in an advertising campaign, many fell for the “urge” to have them and pay a fee to the broker. That’s despite most of the info or tools provided can be found for free at a closer look at other offerings.
The exciting thing is that financial trading software doesn’t refer only to forex trading anymore. Instead, there is software that screens the stock market for the best opportunities out there. Anyways, due to stiff competition, the typical forex broker expanded its offering into another market too, like stock market trading, commodities, precious metals, indices, and even bonds.
Depending on the broker and the markets to trade, many features should be considered. There is not a minimum day trading “starter kit” to approach the financial market.
It is important to remember that much of the trading software is complimentary. The idea is to find the brokerage house that offers it for free. If not, what package gives access to the best financial trading software and what are the conditions for it?
One of the most popular and performant financial trading softwares, NinjaTrader is a landmark for the industry. Founded in 2003, the company’s software gives access to free advance charting, market technical analysis, and trade simulation.
With over three-hundred products, mostly forex and futures, the platform is one of the most popular for both new and experienced traders. Over four hundred and fifty professional app developers make sure every technical issue is solved in time, and the sixty-thousand users seem to be happy with the outcome. In fact, it is an excellent software for risk-free learning, and it does offer a trade simulator too.
eSignal is a trading software dedicated to stock trading originally, but it expanded its capabilities to markets like forex, bonds, funds, derivatives and so on. eSignal claims that the free trading platforms offered by most brokers aren’t good enough, and maybe they’re right.
The main problem is most of its features that cost money via a subscription can easily be found for free on the internet. The good part is that the trading execution is proper, and traders gain exposure and have access to multiple markets from the same trading account.
Specially designed for short-term oriented traders that don’t like to keep positions open for a long time, ProfitSource claims to be the best financial trading software for scalpers in the industry.
It uses a blend of sophisticated trading indicators and Elliott Waves Theory basics to find hot opportunities on the market from the moment the trader logs in. Advertised as advanced technical analysis software and platform, ProfitSource’s most significant drawdown is the relatively high price that makes it inaccessible to many retail traders.
MetaStock has been offering technical analysis software for the financial markets for more than thirty years. Starting with the stock market and expanding its capabilities to derivatives, commodities, futures or forex, MetaStock offers over three-hundred technical indicators designed to accompany traders’ decisions.
The beauty of this financial trading software is that it addresses all types of traders: rookie, beginners, intermediate and experienced ones. Moreover, it addresses scalping, swing trading and investing too.
On top of free trading resources, MetaStock provides a set of third-party add-ons like Steve Bigalow’s Candle Profit System, the Bollinger Bands’ Tool Kit, and so on. In principle, the company teamed up with renowned names in the industry and offer these plugins or add-ons on a subscription basis.
TradingView is a free charting platform that seems to make money by selling ad space. There is an option to remove the ads by upgrading to a higher or more professional version. You can add your own data or purchase data from the company much like some of the others and the company have created their own programming language called Pine. The indicators on the platform are comprehensive and there are some additional ones that need to be paid for like Volume Profile. All in all it is a great charting package and would compliment any technical trader.
Pros and Cons of Paying for Financial Trading Software
The advantages of using dedicated financial trading software come from trading with proven methods. Before putting the software up to sell, an army of researchers, traders, and other people test and back-test it to see its performance and how to improve the results.
The drawdown is that almost always you’ll end up being offered the second version of the software, claiming to be better than the initial one. Then the third version, and so on. In other words, you’re trapped in a system that you got used to, and it is difficult to leave.
Another disadvantage comes from the different packages offered. To make sure you have access to the entire suite range, you need to subscribe to the most expensive package.
On the pro side, you can manage all your financial investments on various markets from the same trading account. The same can be done by spreading the funds into several trading accounts and using different trading platforms from multiple brokers.
One of the significant advantages is that most of these companies that offer financial trading software also provide a free trial period, ranging from a couple of weeks to five weeks or even more. In this way, traders have the chance to test the software and see if it indeed offers everything they need to pay for it or to opt for a monthly subscription.
The best financial trading software usually is not free. And, depends on what traders are looking for.
For example, if one aims to find a trading platform just to run his/her trading algorithms, then any basic platform is good enough. Moreover, there is no supplemental software to pay for using it.
Typically, the decision to pay for extra financial trading software comes from different needs. Traders that decide to go down that path look for product functionality more than the promise of quick riches.
Because there is no holy grail in trading, like no recipe or strategy that always results in winning trades, there is a battle for finding the one that increases the chances of winning. Any technical trader wants to have access to the best in the industry: the top technical indicators, the most efficient financial trading software, etc., that will offer the best risk-reward setup and trade.
Unfortunately, there is no such thing yet. What suits one trader may not suit another one, as perceptions and human nature make us different. Some traders lack patience and like to trade on the short and very-short-term horizon, some others just want to keep their trades open for a long time, and so on. There is always something to differentiate one trader from another and one trading strategy from the other.
The same goes with financial trading software. There will always be a new version claiming it holds the holy grail, a new indicator, and another break-through. What matters is the resulting trades use a sound money management technique good enough to let the trading account grow in time. If that’s the case, you just found the best financial trading software.