Four Features to Consider when Choosing Day-Trading Software

Four Features to Consider when Choosing Day-Trading Software

Capital Markets CIO Outlook | Tuesday, July 20, 2021

During the day, day traders try to profit from short-term market changes. Short-term price swings are influenced mainly by the news, supply and demand, and other factors.

Fremont, CA: Day-trading software is a computer program typically offered by brokerage firms to assist clients in completing their day-trading tasks quickly and efficiently. They frequently automate analyses and trades on their own, allowing traders to harvest profits that would be tough for ordinary humans to attain. The features and functionalities supplied may vary from one software package to the next, and versions may be offered. Independent vendors, in addition to brokers, offer day-trading software with more extensive functionality. Here are four features of good day-trading software:

Platform independence:

It is recommended to use a web-based software product unless a trader runs highly complex algorithms for day-trading that require high-end dedicated computers. Connectivity from anywhere, no manual upgrade installations, and no maintenance fees are just a few of the advantages. However, if you're working with more sophisticated algorithms that necessitate powerful processing, you should consider investing in dedicated computer-based installable software, which will be more expensive.

Specific needs for day trading:

Understanding the product requires more than trusting the claims made on stockbrokers' websites. Request a trial version and evaluate it thoroughly throughout the early phase. Alternatively, use the stockbroker's or vendor's screen-by-screen instruction (if available) to determine the best fit for your day-trading needs.

Additional Features:

During the day, day traders try to profit from short-term market changes. Short-term price swings are influenced mainly by the news, supply and demand, and other factors.

Analytical Features: Pay attention to the set of analytical features it offers, such as:

  • Technical Indicators/Pattern Recognition: F Many technical indicators are accessible for traders who want to profit from anticipating future price levels and directions. Once the trader has decided which technical indicators to follow, they should ensure that their day-trading software allows for the necessary automation for effective trade processing using the chosen technical indicator.
  • Arbitrage Opportunities Recognition: Simultaneous buying at a low price exchange and selling at a high price market allows for profit chances and is one of the most often used day-trading software methods. This necessitates a link to both markets, the ability to monitor price discrepancies as they arise, and the capacity to execute trades quickly.
  • Mathematical model-based strategies: A few automated trading strategies are based on mathematical models that allow trading on a combination of options and their underlying security, where trades are placed to offset positive and negative deltas so that the portfolio delta is kept at zero, such as the delta-neutral trading strategy. The day-trading program should have the ability to examine current holdings, check market pricing, and execute trades for both equity and options as needed.
  • Trend following strategies: This is another set of approaches that are widely used with day-trading software.

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