Technical Analysis Software ‘ How It Can Help You To Trade More Successfully
March 30th, 2010
There’s a lot of work involved in trading. You have to keep track of numerous price movements and it’s difficult to always be aware of when important technical indicators show that a good trade is possible without having the right software. A good technical analysis software package can help you with market scanning, charting, back testing, setting up custom indicators, optimisation, importing live data feeds, setting up alerts and connecting directly to your broker’s platform.
Charting is a very important feature of virtually all software packages. A chart is simply a way to graphically present changes in the price as well as trading volumes of a specific market instrument, such as currencies or stocks. Charts come in many shapes and sizes ‘ the simplest one being the line chart. A very popular chart type is the candlestick chart, while many traders still prefer the ease of use of the bar chart.
Using charting software the trader can easily see when a particular technical indicators performs a certain action. A simple example is when the price of a stock moves through the moving average, or break out of a Bollinger band. With automated price feeds these charts can be drawn ‘on the fly’ by the software ‘ the trader can simply wait for a desired scenario to occur.
Another important feature of most good technical analysis packages is the ability to back test a trading system. If you get a bright idea and you want to see how it would have fared in real life, you can back test it on historical data with this feature.
If you find a system that works well on back testing, you can use optimisation to fine tune it further to get the best possible results. There is a danger involved here: the past very seldom repeats itself in exactly the same way, so your system might work 100% on historical data, but somehow never make money for you. That is called over-optimisation.
You should also make sure your technical analysis software has the ability to connect to a real-time data feed. You will therefore also need a provider of real-time data. Mostly they will give you more than just live prices. Often you will get valuable market information, SENS notices and trading tips as well.
If you truly want to learn more about this topic, then I suggest you check out the web’s best resource on this, go to this site now!:
Realated Articles:
Tags: business general