Picking your trading software is a necessary step for any trader. Whether you are day-trading or making a few trades per week, the software you choose will have a direct effect on your success and the bottom line.
Choosing and identifying the trading software which is right for you is not an easy process. It requires attentive research and understanding of your own needs and particularities.
In this article, we will be taking a look at 5 important things you should consider when choosing your trading software.
1. Web-based vs Computer-based software
Trading software can be divided into two categories: web-based and computer-based. It is helpful to separate the two and understand what fits you most. Web-based trading platforms are usually free, have a pleasant, user-friendly interface that you can access from anywhere, anytime, as long as you are connected to the internet.
Computer-based software is usually an installable program that takes up disc space. Such software usually comes with advanced charting features, analytical tools, sometimes even with algorithms and other more complex features. However, a comprehensive computer-based trading program can cost you handsomely as well.
2. Complexity of the instruments you want to trade
The choice of whether to go for a web-based or a computer-based trading software is also related to another important aspect of your trading. That is, what instrument are you going to trade? If you are only trading stocks or standard forex, you might need a simpler, all-around software solution.
However, if you are going to trade futures and/or options, there are powerful trading platforms available designed specifically for such more complex instruments. This can be especially helpful if you are doing statistical arbitrage trading or similar complex calculations and considerations when choosing your trades.
3. Analytical features
Related to the previous two considerations, analytical software capacity and your needs for such is another important consideration that requires your thought and attention. Do you apply a more fundamental or a more technical approach to your trading? If you are primarily a technical trader, you will most likely prefer software which offers a high variety of analytical features. That is, your preferred software will have a baggage of technical indicators that will help you identify patterns and key price levels in your trading.
On the other hand, if you are primarily a fundamental trader, other aspects of trading will become of key importance to you. For instance, the speed of the trading platform, a reliable news feed will carry significant weight for such a trader when choosing the right trading software.
4. Other key aspects to consider
A few more important aspects you should consider when picking your trading software are: cost, reliability, security, customer support.
Cost: Trading software costs range from absolutely free of charge to hundreds of dollars per month. If you have a small starting capital, it probably is wise to not go for an expensive option that would make a dent in your profits.
Reliability: It’s important to know whether you can trust the trading platform you will be using in terms of its data, calculations, news updates, etc. Additional questions you should be asking are: does the software work continuously without interruptions? What is the update frequency for the software?
Security: You can make a fortune trading, however, an unsecured trading platform can easily break your account. Make sure you question and research about the platform you are about to use to not get into unwanted trouble.
Customer Support: How quick does customer support react to an inquiry? Does it have a dedicated online chat? Does it work on the weekends? Don’t forget to make sure customer support checks the boxes you need by asking similar questions.
The best way to weigh these considerations is by reading what other people have to say about the software you are about to use. Checking out objective review platforms such as Investimonials can help you weigh these important aspects with more ease.
5. Does it all make sense for you?
Picking the trading software which is right for you is always a multidimensional choice. There is no one-fits-all solution for every trader. It all comes down to the trade-offs you are willing to make between the various functionalities and aspects of the trading software.
Once you have selected a few options that match your criteria, it is important to give the software a demo try before you go live with real money. The purpose of this is to answer the question: does the trading software actually make sense? That is, is it actually easy to use and manage?
Most trading software developers offer free trials, even for expensive, high-end programs. Do not hesitate to just try them out and get the feel for the software you are about to use, as this will be the ultimate test in your selection process.
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