Introduction to trading software

Trading software gives you the necessary tools to trade and analyze financial products such as currencies and stocks. Brokerage firms usually have trading software that facilitates clients to trade and manage their accounts. But there are times when traders need to purchase third party software to assist the software provided by brokerages.

Understanding Trading Software

The use of trading software has drastically increased with the development of electronic communication networks. With the higher availability of APIs, the use of trading software has even more increased.

With many software packages, you can trade outside of traditional stock exchanges or even houses. Now, this has given discount brokers a very good reason to offer their own trading software. Meanwhile, APIs have opened the market for third-party software developers by providing real-time price and fundamental data.

Types of Trading Software

Traders require different types of software to analyze the financial market properly. They can be recognized by the features and the main task they do. Usually, we can see trading software that does the following things.

Placing Trades – This is common for most trading software. The activity of placing trades includes market orders, limit orders, look up real-time quotes, etc. A market order is a request by an investor – usually made through a broker or brokerage service – to buy or sell a security at the best available price in the current market.

Technical Analysis – Technical analysis is a very popular method for successful bidding. Most trading software supports technical analysis. For that, they provide different chart types such as lines, candlesticks. Also, trading software provides many trading indicators like moving averages and momentum oscillators etc.,

Fundamental Analysis – Fundamental analysis is comparatively difficult to do with trading software. However, some trading software provides fundamental information such as financial statements, analyst ratings to assist anyone who does fundamental analysis.

Programmatic Trading – This feature can be seen in advanced trading software. This feature enables developers to execute trading systems programmatically. In addition, you can back test the functionality to see how you did in past trading’s.

Paper Trading – Not many people like to invest money in the stock market. Paper trading was introduced to encourage these kinds of people. Paper trading creates demo account for you which you can use to test out your skills. This feature is available in all the popular trading software.

Final note

There is a lot of software available to support the different needs of traders. As a trader, you should closely understand your requirements before selecting trading software. For example, it could be possible that, Active traders may need entirely different software from what investors-only need. Trading software gives you the necessary tools to trade and analyze financial products such as currencies and stocks. Brokerage firms usually have trading software that facilitates clients to trade and manage their accounts. But there are times when traders need to purchase third party software to assist the software provided by brokerages.