Technical analysis software

Technical analysis software automates the charting, analysis and reporting functions that support technical analysts in their review and prediction of financial markets (e.g. the stock market).

Features

The following are the most common features of technical analysis applications. Some software may focus on only one aspect (say back testing) and the combination of more than one software package is often required to build a fully automated trading system.

Charting

A graphical interface that presents price, volume and technical analysis indicators through a variety of visual interfaces such as line, bar, candlestick and open-high-low-close (OHLC) charts. The chart data is presented as a time series and users typically have the ability to view historical data with varying interval (sampling) periods. Interval periods range from seconds through to months; short term traders tend to use frequent interval periods, such as 1 minute i.e. the price data is updated every 1 minute, whereas longer term traders tend to use daily, weekly or monthly interval periods when trying to identify price and technical analysis trends. Some charting packages enable users to draw support and resistance trend line or for example Fibonacci retracements to help establish trending patterns.

Back testing

Enables traders to test technical analysis investment timing strategies against historical price movement for one or more specific securities. Strategies are compared to each other using diverse performance measurements such as maximum drawdown, annual profit and Sharpe ratio. The objective is to try and develop a trading strategy based on technical analysis indicator criteria, which will generate a positive return. This concept was computerized and introduced to traders by Louis B. Mendelsohn in 1983 with his ProfitTaker Futures Trading Software (see August 2010 issue of Stocks, Futures & Options Magazine).

Optimization

A process of testing technical analysis indicator parameters, with the view to developing an investment strategy that generates the maximum return based on historical price movement. The optimization process is achieved through the fine-tuning of the associated technical analysis charting parameters. Typically technical analysis indicators have a range of parameters that can be adjusted, such as the interval period and the technical analysis indicator variables. For example, the stochastic indicator has four parameters that effect its results: %k, %d, slowing period, interval period. Optimization must be performed carefully to avoid curve fitting. Back testing of an over-optimized system will perform real-time. One way to diminish over-optimization is by carrying out optimization on historical data and then performing future testing (sometimes referred to as 'out of sample') before making a final evaluation of a trading strategy.

Scanner

Scanners enable users to 'scan' the market, be it stocks, options, currencies etc., to identify investment opportunities that meet a user's specific investment criteria. Using a technical analysis scanner, a user could, for example, scan the market to identify oversold stocks that have stochastic and RSI value of less than 20% and 30 respectively.

Alerts

Alert software is used to monitor specific equities, such as stocks, options, currencies, warrants, etc., and provide a notification of when specific price, volume and technical analysis investment conditions are met. As an example, a person who uses technical analysis might want to be notified when the RSI indicator rises above 70, followed by the price falling below its 20-day moving average; using alerting software the user will be able to create an alert, which will provide a notification of when the technical analysis investment conditions are met. When alert conditions are met, a notification is typically communicated via an on screen pop up or sent as an email, instant message or text alert (to a mobile phone).

Custom indicators

Most technical analysis software includes a library of de facto standard indicators (e.g. moving averages and MACD). Some software will also provide a means to customize, combine or create new indicators. This is typically achieved with a proprietary scripting or graphical language.

Data feed

Technical analysis software is typically used with end of day (EOD), delayed or real time data feeds. EOD data feeds provide the end of day closing price for the given equity and is typically updated once a day at market close. Delayed data is typically delayed 15 to 30 minutes depending on the exchange and is the most commonly used data feed type. Real time data feeds provide tick by tick 'real time' data. Real time data is licensed on a per-exchange basis whereas delayed data is typically purchased on a regional basis, such as US markets, rather than an exchange basis.

Broker interface

Some technical analysis software can be integrated with brokerage platforms to enable traders to place trades via a user interface that they are familiar with. Typically these software providers try to differentiate themselves from the brokerage software through enhanced features such as automated trading.

Platforms

Technical analysis software is available in the form of commercial or open source software. Such software may be available on a computer, or on a mobile phone or personal digital assistant (PDA). Mobile phones and PDAs allow a user to access online technical analysis packages when away from their computer. However, packages that require the use of Java applets may not work on older model mobile phones or PDAs. Online technical analysis software packages provide access from any Internet-connected computer (including a suitably equipped mobile or PDA), but may require the user to store their information with the provider. Installed, downloaded software will only be available on the computers that the user has downloaded and installed it on.

Feature comparison of products

Back testing Optimisation Scanner Alerts Built-in indicators Custom indicators Data feed Broker interface Automated Trading Online Mobile access Open source Mac OS Linux
1MarketView Cheetah Yes Yes Yes Yes 240+ Yes EOD, Real-time Yes No Yes No No No No
Advanced Get No No Yes No Yes No Yes, Metastock format No No No No No No No
AgenaTrader Yes Yes Yes Yes Yes Yes EOD, Real Time Yes Yes No No No No No
Altreva Adaptive Modeler Yes No No No Yes Yes EOD, Real Time No No No No No No No
Alphametrix MT4 Yes Yes No Yes Yes Yes Real Time Yes No No Yes No No No
AmiBroker Yes Yes Yes Yes ~100 Yes Real Time, Delayed Yes Yes No No No No No
Aspen Graphics WebChart No No No No 94 No Real Time, Delayed No No Yes No No Yes Yes
Aspen Graphics Workstation No No No Yes 40 Yes Real Time, Delayed Yes No No No No No No
ATS Futures Yes Yes No Yes Yes Yes Real Time Yes Yes No Yes No No No
ATRADER No No No Yes ~50 No Real Time, Delayed Yes No No No No No No
Axial Finance Yes Yes Yes Yes 80 Yes EOD, Real Time Yes No No No No Yes Yes
beeTrader Yes Yes Yes Yes Yes Yes Metastock format, EOD, Real Time, Delayed Yes Yes No No No No No
Bloomberg L.P. Yes Yes Yes Yes 200+ Yes Real Time, Delayed Yes No Yes Yes No No No
Briar Navigator Yes Yes No Yes Yes No EOD No No No No No No No
Channalyze Yes Yes Yes No ~50 Yes EOD No No No No No No No
ChartAlert Yes No Yes ~100 Yes EOD No No No No No No No
ChartIQ No No No No ~80 Yes EOD, Real Time No No Yes Yes No Yes Yes
Chart Tool No No No No 11 No delayed No No Yes Yes No No No
ChartNexus Yes Yes Yes Yes 36 Yes EOD No No No Yes No Yes Yes
CQG Yes Yes Yes Yes ~220 Yes EOD, Real Time, Delayed Yes No No No No No No
DashBov Yes No No No ~2 No EOD No No No No Yes Yes Yes
EdgeRater Yes No Yes Yes ~100 Yes EOD No No No No No No No
End Game Investments Yes Yes Yes No ~250 Yes EOD No No Yes Yes No Yes Yes
Equities Lab Yes Yes Yes Yes Yes Yes EOD with fundamental No No Yes No No Yes Yes
Esignal 11 Yes Yes Yes Yes ~200 Yes EOD, Real Time Yes No No Yes No No No
Eye in the Sky Trade Planning No No Yes No 200+ Yes EOD No No No Yes No No No
iGuideStocks Yes No Yes ~25 Yes Real Time No No No No No No No
FinanceIQ Yes Yes Yes Yes ~80 Yes EOD No No No No No No No
FXGraph Premium No No No Yes ~8 No EOD,Delayed No No No No No No No
Gannanalyst Professional No No Yes No Yes No Metastock format No No No No No No No
GMDH Shell Yes Yes No No Yes Yes Real Time, EOD, Delayed, CSV Reader No No No No No No No
Insider TA Yes Yes Yes Yes ~5 No EOD No No No No No No No
Back testing Optimisation Scanner Alerts Built-in indicators Custom indicators Data feed Broker interface Automated Trading Online Mobile access Open source Mac OS Linux
Market Analyst Software Yes Yes Yes Yes ~160 Yes EOD, Delayed, Real Time No No No No No No No
Merchant of Venice Yes Yes No 7 Yes EOD No No No No Yes Yes Yes
MetaStock Yes Yes Yes Yes Yes Yes EOD, Delayed, Real Time No No No No No No No
MetaTrader 4 Yes Yes No[1] Yes Yes Yes Real Time Yes Yes Yes[2] Yes No No Yes[3]
MultiCharts Yes Yes Yes Yes ~250 Yes EOD, Delayed, Real Time Yes Yes No No No No No
NetTradeX Yes Yes No Yes Yes Yes Real time Yes Yes No Yes No No No
NexTick No No Yes Yes ~7 No Real time (OpenTick), EOD(Yahoo) No No No No Yes No No
NinjaTrader Yes Yes Yes Yes ~100 Yes EOD, Delayed, Real Time Yes Yes No No No No No
Smart Trader + Yes Yes Yes Yes 21 Yes Real Time, EOD, Delayed No No Yes No No No No
Optimal Trader Yes Yes Yes No 15 No EOD, Delayed No No No No No No No
Piggy Market Squeak No No No Yes No Yes EOD No No No No Yes No No
PhoenixAI Yes No Yes Yes ~115 No Real Time, Delayed No No No No No No No
ProRealTime Yes Yes Yes Yes ~100 Yes Real Time, Delayed, EOD Yes Yes Yes Yes No Yes Yes
Protrader Yes Yes Yes Yes ~60 Yes Real Time, EOD, Delayed Yes No Yes Yes No No No
QChartist No No Yes Yes ~50 Yes EOD No No No No Yes No No
Qtstalker Yes No Yes ~130 Yes EOD, Delayed No No No No Yes Yes Yes
QuantShare Yes Yes Yes Yes ~100 Yes EOD, Real-time No No Yes No No No No
Recognia Technical Insight No No Yes Yes ~50 No EOD, Real-time Yes No Yes Yes No Yes Yes
Reliable Software's Falcon7 Yes Yes Yes Yes 300+ Yes EOD, Real-time Yes No Yes No No No No
Seer Trading Platform Yes Yes Yes Yes 80+ Yes EOD, Delayed, Real-time Yes No No Yes No No No
Sierra Chart Yes Yes Yes Yes ~240 Yes EOD, Delayed, Real Time, CVS Yes Yes No No No No No
sgcTrader Yes Yes No Yes ~100 No Real Time, Delayed Yes No Yes No No No No
Spider Software Yes Yes Yes Yes 30 Yes EOD,Real Time No No Yes No No No No
Back testing Optimisation Scanner Alerts Built-in indicators Custom indicators Data feed Broker interface Automated Trading Online Mobile access Open source Mac OS Linux
Statmetrics Yes No No Yes ~30 No EOD, Real-time No No No No No Yes Yes
Stocker No No Yes No 13 Yes Delayed No No No No No No No
StockWrap No No Yes 130 Yes EOD, Delayed, Real Time No No No No No No No
StrataSearch Yes Yes Yes No ~100 Yes EOD No No No No No No No
Tashash.com Yes Yes Yes No ~20 Yes EOD No No Yes No No No No
Technical Analyst Trader Yes Yes Yes Yes ~100 Yes EOD, Delayed, Real Time No No No No No No No
Telechart Yes EOD, Delayed, Real Time No No No No No No No
TeleTrader Professional Workstation No No No Yes 200+ Yes EOD, Delayed, Real Time Yes No Yes Yes No No No
TickInvest Yes Yes Yes Yes Yes Yes EOD, Real Time No No No No No No Yes
timetotrade Yes Yes No Yes 200+ Yes Real Time, EOD, Delayed Yes Yes Yes Yes No Yes Yes
Track 'n Trade Yes Yes No Yes Yes Yes Real Time, EOD Yes Yes No Yes No No No
Tradermade Yes Yes No Yes ~50 Yes Real Time, EOD, Delayed, CSV Reader No No Yes Yes No Yes Yes
TraderStar Yes Yes Yes No 40+ Yes EOD, Real-time No No Yes No No Yes Yes
Tradesignal Yes Yes Yes Yes ~170 Yes EOD, Delayed, Real Time Yes Yes Yes No No No No
TradeStation Yes Yes Yes ~100 Yes Real Time Yes Yes Yes Yes No No No
Trading Work Station No No Yes Yes ~30 No Delayed, Real Time Yes No Yes Yes No Yes Yes
VestraCharts No No Yes Yes ~30 No EOD, Delayed, Real Time Yes No No No No No No
Vogaz Yes Yes Yes Yes 150+ Yes EOD, Delayed, Real-time No No Yes Yes No No No
Wave59 Yes Yes No No 35+ Yes EOD, Delayed, Real Time Yes No No No No No No
Wealth Lab Yes Yes Yes Yes 300+ Yes EOD, Real-time Yes No Yes No No No No
WinChart No Yes Yes Yes ~20 No Delayed,EOD No No No No No No No
Back testing Optimisation Scanner Alerts Built-in indicators Custom indicators Data feed Broker interface Automated Trading Online Mobile access Open source Mac OS Linux
XTick No No No Yes ~100 Yes Real Time Yes No Yes Yes No Yes No
Zorro Trading Automaton Yes Yes Yes Yes ~200 Yes Real Time Yes No Yes No No No No

References

  1. ↑ Custom scanner apps can be loaded
  2. ↑ New feature 2015/2016
  3. ↑ Optimized to run under Wine
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